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Incorporate sales forecasting into employee compensation plans

By August 12, 2015January 16th, 2023No Comments

Sales forecasting can make your company more efficient and help sales teams target their efforts more effectively, but too many organizations suffer because their teams put out inaccurate forecasting. A recent study conducted by Aberdeen, a research firm, confirmed accurate sales forecasting noticeably improves sales team performance, which should demonstrate the need for effective data collection. Companies can incentivize employees to create accurate sales forecasts by including benefits for sales forecast accuracy in compensation plans. This can create a culture that prizes accurate forecasting and boost an organization’s overall sales. Against common strategies Traditional compensation plans are entirely based on sales volume, but that may not be the most effective way to operate a business. Harvard Business Review notes accurate sales forecasting makes it possible for a business to set realistic goals and allows individual sales people to succeed against their quota. It can also help an organization identify specific territories or products that may need more or less sales attention. That makes it easier for a business to target the places and products that can yield the best long-term growth.

“Accurate forecasts help a sales team focus.”

Ideally, a business wants to incentive employees to perfectly hit their sales projection rather than exceeding it or under delivering. By adjusting individual employee compensation plans according to forecast accuracy, your company can encourage employees to be realistic about their capabilities, which allows business owners to make smarter managerial choices throughout the year. A successful strategy Aberdeen’s research provides definitive proof that incentivizing accurate predictions pays off, and noted the practice is more common among firms that lead the industry in performance. The companies that use incentives to encourage accurate forecasting have greater success with rep development and have a greater ability to direct necessary resources at the deals most likely to close. Incorporating these incentives into a sales team is simplified with compensation management software that can automatically track employee performance against forecast goals and apply the calculations to incentivize that performance. The companies that apply analytics to their sales coaching and training process have a much higher chance of achieving quota annually, according to Aberdeen. Accurate forecasting positively affects many parts of the sales chain and can help a business be more successful overall. Advanced compensation management allows managers to create smart incentive plans and tweak those plans to maximize the benefits.

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Ballast Point Ventures

Ballast Point Ventures is a later-stage venture capital fund established to provide expansion capital for rapidly growing, privately owned companies in diverse industries, with a particular emphasis on companies located in Florida, the Southeast, and Texas. The BPV partners have more than 70 years of combined experience investing in and building high-growth companies in a number of industries, including healthcare, business services, communications, technology, financial services, and consumer goods. BPV has $200 million under management and seeks to make equity investments ranging from $3 million to $10 million.

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Harbert Management Corporation

Harbert Management Corporation seeks to generate superior returns for their investors by identifying and investing in the most promising early growth stage companies in the Southeastern U.S. HMC seeks to capitalize on what it believes are compelling regional dynamics, such as a strong and fast-growing economy, significant research and development activities, and an established entrepreneurial community. The HMC team combines substantial investment, advisory, and operating experience with capital and networking contacts to support great entrepreneurial teams in successfully executing their growth plans. With offices in Birmingham, Alabama; Richmond, Virginia; and Gainesville, Florida, it’s well positioned to partner with entrepreneurs throughout the Southeast.

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KBH Ventures

KBH Ventures was an early investor in Iconixx Software. KBH's investment philosophy plays a significant role in the firm's successful track record. KBH believes in running businesses to be cashflow positive and profitable every month. Startups and companies in a startup mode, such as one that has been purchased in distress, are expected to generate revenue within the first six months and reach profitability within the first 12 to 18 months. KBH also only invests in or acquires companies that are in the startup phase or have less than $20 million in revenues. KBH targets technology companies that offer business-to-business services.

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S3 Ventures

S3 Ventures is an early expansion and growth stage venture firm with $200 million under management. It’s focused on information technology solutions that solve large business problems. S3 also invests in medical devices that improve the human condition. S3 invests in category-defining opportunities. It partners with the team and help focus methodically on what it takes to build a successful company. S3 today helps talented entrepreneurs take their technology and market knowledge and form valuable businesses in a repeatable fashion. Investment sizes start at several million or more for Series A, B, and C financing.