POE Group Redesigns Sales Compensation Plan for Durable Goods Manufacturer Across Three Divisions

Issues:

The company's the sales plans, which spanned four different business units, were disparate, leading to a lack of collaboration. Leadership predicted significant growth in their market and the need to ensure the sales plans supported the business plan. Sales associate perception was that the plan was not competitive, so developing a plan that would retain and motivate this group was viewed as critical to the business’ future growth.

Sales Plan Consulting

The engagement addressed the questions:

  • Do our plans align with and support our business strategy?

  • How do our base and incentive pay levels compare against the market?

  • How do our pay levels compare internally, and is the variance across roles appropriate?

  • How do our incentive program designs compare against peers and best practices?

  • Do our plans appropriately differentiate between the various sales roles, and between high and low performers?

  • Do our plans align with, and support, our sales growth strategy?

  • What changes to plan designs might we consider that would enhance their effectiveness?

 

The POE Group completed qualitative and quantitative data gathering to understand the state of their programs.

 

Qualitative information included general designs, position information, territory information, competitors, sales process, sales channels, perceptions of plan effectiveness, communication processes, and the incentive calculation process.

Quantitative information addressed the relationship between pay and performance, effectiveness of target setting, cost of sales, and comparison of internal pay to external market.

  • Produced a report that provided analysis, scenario testing, and related recommendations.

  • Periodic project updates were provided to senior management.

  • Introduction of a new sales plan with tiered communications – the communication was very transparent to management across all findings.

  • Sales associates were provided detailed information on their plan target opportunities.

 

Sales Plan Outcomes

  • Separate salary structure for sales positions that was distinct from the general workforce.

  • Plan design changes – inclusion of a profitability modifier, alignment of salary component to responsibilities, increased plan leverage, commissions differentiated to encourage sales across different business units (customer segments).

  • Understanding of cost of sales at different sales levels

  • Strong communications to address change management concerns among sales associates.

  • Improved quarterly communication of sales results and relation to sales objectives.

  • The sales plan helped position the company for growth as the market shifted.

 

How Can We Help with Your Company's Compensation Needs?

 

To speak with our managing consultant, Joe Kager, call 813-661-3111 or email directly at info@poegroup.com.

Contact Us for a Free 30-Minute Consultation

© 2020 The POE Group, Inc.    All rights reserved.

  • Blogger Social Icon
  • LinkedIn Social Icon