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Every year, millions of dollars are spent on sales incentive compensation. However, new research reveals that at some organizations incentive compensation practices may undermine sales effectiveness. Consider the following findings from a 2012 sales performance study by consultancy Accenture and market research firm CSO Insights:
These findings raise the question of whether salary and commission structures are encouraging sales reps to establish the right priorities.
Understanding the Problem
One likely reason for the incentive/output disconnect is that business models are evolving rapidly. For instance:
In net, it appears that many companies are trying to power new selling models with old approaches to incentive compensation. In many cases, however, it isn’t working.
Structuring a Solution
Ways that organizations might tighten the link between incentive compensation and higher sales productivity include the following:
The bottom line: creating incentive programs and support systems based on the right metrics for the organization and industry can drive better sales performance with higher return on investment.
Jason Angelos is executive director, and Mark Wachter is senior manager, in the sales and customer services practice at Accenture, a global management consulting, technology services and outsourcing company serving clients in more than 120 countries.
© 2013 Accenture. All rights reserved. Posted with permission.
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