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Rein in sales spikes with balanced incentive compensation plans

By July 11, 2013January 16th, 2023No Comments

Incentive compensation plans are designed to drive sales and improve employee performance. However, when an incentive and sales compensation management program is one dimensional or lacks variety, even star salespeople may find themselves going through the motions and engaging in the frustrating act of procrastination. To keep sales steady and to prevent uneven performances all year round, executives can implement an ICM plan that encourages consistency and productivity. Keep reading to find out how to control business practices with the right ICM program. Varied measurement periods Quarterly sales competitions are a great way to drive employees toward bringing in higher revenues, but repeatedly using lengthy time periods for sales evaluations can lead to unexpected consequences like obtrusive spikes in sales. When salespeople know their quarterly goal is months away, many give in to the temptation to put off work for the first several weeks or even months, then have to work overtime toward the end of the quarter to hit their sales targets. While the most important goal – hitting a sales quota – is usually achieved, these practices put unnecessary strain on a workforce and managers alike. An easy way to correct this behavior is to intersperse different incentives throughout a long-term quarterly goal. In order to promote even sales numbers, a manager or executive can dole out modest rewards such as gift cards or small bonuses at the end of each month to encourage high performance on a regular basis. Reward early sales Another way to begin a quarter with strong numbers is to reward those who make sales at the beginning of the month or quarter. A VP of sales can set up a program in which, for example, the first five team members to sell 10 units of a product will be rewarded with extra compensation or a perk such as extra flexibility and the ability to work from home a few days. Beginning the month with a short burst of competition will kick start sales so employees start a new sales period on the right foot. Developing a balanced ICM plan can be challenging – many VPs of sales and executives now turn to incentive compensation software to help make important decisions.

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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.

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.

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.

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.