Now more than ever in this ultra-competitive business climate, organizations have to implement methodologies that not only drive revenue growth but also improve resilience and profitability. And the single most important lever to achieve this is a proper Incentive Compensation and Sales Performance Management (SPM) plan.
Driving Revenue Growth
The sale behavior is directly affected by incentive pay. As you can align sales incentives to business objectives, you can drive sales people to work on high-margin products, enter new markets or close more deals in the shorter term. A tech company, for instance, set different incentives for selling cloud solutions over older products. Not only did this help drive growth in a very fast-growing niche, but it also allowed the business to move into subscription.
Enhancing Resilience
In resilience, you need to learn how to bounce back and still perform when things don’t go your way. SPM systems allow for real-time data about sales numbers that allows organizations to change course. In the face of the pandemic, one multinational company changed their incentive programs to reward digital and not physical sales. Their SPM platform was able to pivot easily, retaining revenues during the most extreme market shifts.
Maximizing Profitability
Incentive programs well-executed, too, priorities profits – the top-line growth is balanced against bottom-line performance. A manufacturing firm, for example, created a bonus system that was based not only on generating revenue but also adhering to the company’s price policy. This stopped over-discounting, so that sales teams were focused on a healthy margin deal.
Conclusion
Companies that leverage incentive compensation and SPM as part of their operational plan benefit. Not only do these tools promote targeted sales activities but they offer data to stay ahead of the curve, increase margins and build sustainability. To buy effective incentive and SPM solutions isn’t about the numbers — it’s about creating a long-term profitable future.
