Personalizing Incentives

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Personalizing Incentives

Leveraging technology to deliver a more motivating incentive program

Presenter

Steve Marley is a Principal at ZS. As a leader in the firm’s Sales Compensation Practice, he oversees ZS’s sales performance management work. Steve, a Certified Sales Compensation Professional, has more than 10 years of consulting experience.

He has helped companies design effective compensation plans, set motivating quotas and implement efficient compensation administration programs.

Steve is the author of several articles in industry publications, a regular speaker at conferences, a frequent contributor to ZS’s blog The Carrot, the coauthor of the 2016 book, “The Future of Sales Compensation”, and a coauthor of the upcoming book, “Sales Compensation Solutions”.

Book giveaway

Sales Compensation Solutions

Written by leading sales compensation experts, “Sales Compensation Solutions” offers actionable insights and ideas that sales and compensation professionals can use to design and implement programs that work in today’s selling environments, including recommendations to:

■ Adapt compensation to changing sales roles

■ Motivate the sales force with more than money

■ Create incentives that drive the top and bottom lines

■ Use analytics to boost sales compensation impact

■ Help the sales force embrace compensation plan change

■ And more!

External change forces impacting the sales organization

Implications of external forces

Sales incentive programs are becoming more complex

Complex selling environments

Challenging crediting assignments

Murky line-of-sight / attribution of sales

Internal change forces impacting the sales organization

Implications of internal forces

A new layer of complexity: external forces plus…

Movement away from “coin-operated” mentality$

Greater focus on what else gets people “out of bed”

in the morning

The foundation for personalized incentives

Current incentives plans are designed around sales roles

ISR Territory Executive

KAM

Increasing levels of customization

Exceptions, but still based on the role

Personalization of incentives

A total of 510 valid responses, with approximately

equal number from Baby Boomers,

Gen-X, and Gen-Y

Respondents are Salespeople

working in the USA

Generations in the workforce

Survey findings overview (1 of 3)Pre

fere

nce

Baby-Boomers

GenX

GenY

High

Low

Baby-Boomers prefer high fixed component

Medium level of fixed pay (50%-70%) is the most

preferred choice of Gen-X

Gen-Y prefers low fixed component High Variable Pay High Fixed Pay

Key Takeaway: Risk appetite is higher for younger generations. Compensation system should address the risk appetite of different generations

Survey findings overview (2 of 3)

50 Hours 40 Hours 32 Hours

Pre

fere

nce

Baby-Boomers

Non Flexible Flexible

Low

High

50 Hours 40 Hours 32 Hours

Gen-Y

50 Hours 40 Hours 32 Hours

Gen-X

Preference for work hours and flexibility

Key Takeaway: Work being central to their lives, baby-boomers do not benefit from flexible working hours whereas flexibility in work hours is highly important for Gen-Y

Survey findings overview (3 of 3)

Two Winners, Unequal PrizeMoney

Three Winners, Unequal PrizeMoney

Three Winners, Equal PrizeMoney

Pre

fere

nce

Preferences for Sales Contests

Baby-Boomers

GenX

GenY

Low

High

COMPETITIVE INTENSITYHigh Low

Key Takeaway: Younger generations prefer less competitive contest structures

Levels of Personalization

Level Personalization Options Example

1 Company designs and offers limited options

Choose from Plan 1 or Plan 2

2 Sales person provides input to metric or measure from company

Choose your quota level

3 Sales person provides direct input to individual compensation structure

Choose your plan type

Sales Person

Company

Where are we now?

What level of plan personalization has your company incorporated?

Level 1: Company offers limited number of controlled options to sales people

Level 2: Sales people provide input on select, certain metrics (e.g., quota level)

Level 3: Sales people can chose metrics and / or reward mechanisms from variety of options

Level 4: Company hasn’t started personalizing plans yet

Challenges

Enabling personalization

Designing options

• Key questions to consider:

Why? Who? What?

Why do we need this?Why will it benefit the sales person?

Who needs to be involved to make it work?Who should participate?

What are the options?

Paradox of Choice

Technology enablers

Technology enablers

Connectivity

• Integration of functionality to drive motivation

• HR data, prizes, game play, sales compensation

Ability to track and compare multiple compensation structures at the role-person (or role-group) level

Technology enablers

Flexibility and architecture changes

• Paradigm of systems constructed around a single role will become increasingly obsolete

Software that can easily handle “exceptions” of today with ease

• Faster processing speeds

Comp, role based

Comp, motivation rewards

Integrated sales planning, role based

Integrated sales planning, motivation

rewards

Evolution of company incentives strategyCom

ple

xity

Breadth

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