Aligning Sales Goals and Incentives
On paper, the theory behind sales incentive alignment seems pretty straightforward. Identify a key business goal, such as new product sales, profitability, account penetration, or reducing inventory, and then develop the right programs to drive results.
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In practice, however, companies often unwittingly wind up developing and running incentive programs that lead to wasted energy. Sandra Daniel, the president and CEO of the FIRE Light Group (www.incentivesmotivate.com
), cites the example of a credit union that came to her after a failed incentive promotion.
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"The lending department wanted to double the credit union's overall loan volume, so an incentive for the loan officers was established," she says. "For one quarter the officers were paid an additional two dollars for every application they brought in. So, naturally, what the company got were lots of new loan applications from people who wouldn't qualify for the loans. This wound up increasing the organization's costs because it was processing all this useless paperwork and not getting any closer to its goals."
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