Sales Pay-out Modeling

Just like the design process the modeling is also based upon the goals the company wants to achieve. For eg : What is the payout under various situations: below budget, at budget and above budget? ,Is the plan capped or uncapped?, Does the commission rate increase after the company reaches various performance levels?

Payout modeling is intended to ward off the effects of ‘unintended consequences.” You do not want to design a plan to reward a specific performance outcome only to have people act in a totally different manner.

Once things are cleared you can then refer to the basic engineering of the model which reflects in the screenshot below

If you want some perspective on how you or  your company needs to enhance their Sales/Client Management Capabilities, please email me at shubhanjan.saha@gmail.com

Sales Incentive Plan Effectiveness Checklist

As a Business Analyst one of my tasks was to support & design the Incentive plan for the Sales /Client management population I was advised to keep the following checklist in mind while providing support to the design project. This check list can also help identify issues and problems with the existing sales compensation plan.

1. The sales incentive plan must support the marketing strategy and the long-term continuity of the sales force.
2. If the Return on Investment is negative or marginal the program should be reevaluated.
3. Tactical issues usually revolve around avoiding the following:

• Over or underpaying the sales force
• Ignoring new business development
• Resisting management and “doing my own thing”
• Gaming the goal-setting process

The checklist indicates issues & problems with the incentive plan that need further analysis before a new plan can be modeled and then effectively implemented.

If you want some perspective on how you or  your company needs to enhance their Sales/Client Management Capabilities, please email me at shubhanjan.saha@gmail.com