I am currently working on a proposal where a prospective client wants an estimate for the above. Preparing such an estimate is always more challenging because the client needs are generally not met by an off-the-shelf package meant for a different business scenario.
Continue reading "Implementing Royalty Solutions using an Incentive Compensation System" »
I am getting pulled into quite a few opportunities in the telecom vertical dealing with Incentive Compensation. This post is a collection of observations and thoughts about the drivers of incentive compensation in this vertical.
Continue reading "Incentive Compensation in the Telecom Vertical" »
I was browsing our internal Blog community and came across some interesting points penned down by Khanchana on the relevance of CRM investments in the current economic scenario. Here are some interesting excerpts to take away from her blog.
Continue reading "Investment in CRM – Is it relevant NOW?" »
In a recent assignment I came across a situation where a company had planned for hundreds of compensation plans for its partners. Needless to say the amount of effort involved in designing, developing, testing and maintaining all these plans is significant. That brings us to the question which is also the title of the post.
But before that, are more plans better or worse? As with many answers in business, it depends. More plans give the organization more flexibility in tailoring the plans specific to the resource. A sales manager in one territory might want to increase revenue while another manager in somewhere else might want to increase profits. Different products could be in focus in different parts of the country or the globe, for that matter. Service levels could be the priority in one plan while customer complaints could be in another. In short, there is no end to all the factors that can be built into different compensation plans.
Lesser plans have their advantages too. Plans can be more closely integrated to the overall company strategy and direction. Lesser plans allow easier performance evaluation across the sales force. And of course, it is easier and cheaper to build and maintain plans when they don’t run into the hundreds.
In my opinion, the number of plans that the organization may need depends on a few key factors-
Role - You might need a different plan for a different role. You cannot have the same performance parameters for a sales rep as well as a service representative. Both roles have different job descriptions and need to be evaluated separately. The same could be the case for a sales rep and a sales manager.
Products - The product basket that are sold or serviced could also drive the design of the compensation plan.
Customer - Sometimes the customer profile whom you service could drive the plan design. If you service one large customer vis a vis hundreds of small customers, there could be valid reasons for a specific compensation plan.
There could be more but in the end, the company has to evaluate every new compensation plan proposal and decide if it makes sense to design and build it. Can an existing plan meet the objectives? Is the additional cost worth it? And most importantly, is the new compensation plan aligned to the overall company strategy and objectives?
