Chapter 10

Incentives That Drive Performance

Motivating the Right Behaviors with the Right Sales and Marketing Incentives to Optimize ROI

Jason Angelos and Gary Singer

 

Chapter Summary

  • Bonuses, commissions, incentives…companies spend billions of dollars “inspiring” their internal and external sales forces, and then on tracking, planning, and processing these.
  • Many times, the spend is spread across silos, which limits the companies' ability to measure “cause and effect” and thereby the return on their investments.
  • Leaders get four things right to maximize the return on investment and then build the scalable mechanisms to continuously optimize.

Incentives. Promotions. Rebates. Commissions. Companies collectively spend billions of dollars annually on sales and marketing incentives to “inspire” their internal and external sales forces to sell more products and services. These organizations believe strongly that monetary motivators are key to effective selling. They also tend to be comfortable with the amounts they're spending—from 5 percent to as much as 20 percent or more of revenue in many cases.

To be sure, companies spend innumerable hours tracking, planning, and processing marketing incentives such as trade promotion investments. And they invest significant sums tracking incentive compensation for their sales force—both direct and indirect. The more difficult issue they wrestle with is whether their sales and marketing incentives are as effective as they could be. Are the rewards ...

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