Sales Incentive Program (SIP) - Getting it Right

A large part of shaping Sales behaviour is the SIP, and given its critical role, it is important that you answer this question, “Does your Sales team like your SIP?”

If you are not sure, just ask them. You can be certain they would know. If you do spend the time, effort and money to setup and run a Sales Incentive Program, then make sure it does its primary job – keeping sales people excited, hungry and driven to win that new deal.

Sales teams are on the frontlines battling for market share every day. It is only fair that they are incentivised to win those battles, and that is the reason every SIP must be designed with the right set of ingredients and cooked to perfection. Most often companies either have no SIP worth the name, or over-design their SIP trying to keep it fair and aligned to every little initiative of the company.

Reimagine the SIP keeping in mind that it must be:

• Easy to understand.

• Aligned with financial goals.

• Flexible to meet evolving needs.

• Exciting and motivating to Sales people.

• Easily and transparently administered.

Also keep in mind that the SIP is not meant to be:

• The answer for every broken sales and CRM process.

• A mathematical labyrinth.

• A treasure hunt that no one wins.

While SIPs in general help you achieve sales targets, flexible ones can also help you focus on specific products or offerings that you want to build traction for in the market, for reasons such as new product launch, portfolio rejig, revenue vs. profitability, competitor positioning and more. SIPs can also help quickly reorient sales thrust from new customer acquisition to account farming and vice versa.

SIP design also depends on organization maturity and brand pull. Emerging businesses without significant brand pull in the market are more dependent on an aggressive sales force to create and win opportunities. Whereas established companies may have a sales staff spending a good part of their effort servicing incoming leads. Both situations require different SIPs to elicit the appropriate behaviours from the sales force.

Well managed SIPs are supported by automation tools that make it easy for sales personnel to know exactly how much they have earned till date and visualize how much they are likely to earn in various performance scenarios. Today there are a plethora of options to digitize and outsource the SIP administration process. It is important that companies take a second look at how they are running their SIPs.

Given its criticality for business performance, getting the SIP right might just be the edge that your company is looking for, to outperform competition in the market place!

Questions? Write to me at arun@arcainnovation.com