One of the most important drivers of sales force productivity and effectiveness is incentive compensation. Pharmaceutical businesses have always endeavored to recruit and retain high-performing sales people by giving extremely competitive overall pay packages with good mix of fixed and variable components. Companies have been constantly devising variable sales incentive schemes that account for a bigger share of remuneration in order to balance this objective with financial restrictions. Pharmaceutical companies use IC as a strategic tool to motivate employees and, as a consequence, drive desired behavior and outcomes. Let us explore the best sales incentive strategies for Pharma Sales Teams.
Incentive plan design aligned with goals
Goal-based sales incentive plans are still the primary ways to drive pay for performance. Companies benefit greatly from goal-based sales incentive schemes. Even if the goals were allocated fairly, how could you be certain that the sales incentive schemes rewarded sales representatives for assisting the organization in meeting its overall sales objectives? The solution does not necessitate a complete revamp of the incentive plan. It is desirable to design performance measures such that it aligns with broader corporate objectives. It enables businesses to change their growth forecasts in response to local market factors such as varied managed-care scenarios and physician availability. Companies must evaluate quality of allocated goals before releasing them to the field to guarantee that each rep has an equal earning chance. They can guarantee that the sales incentive schemes reward rep performance rather than territorial conditions by doing so.
Ensuring high motivation of sales managers
Sales managers play a critical role in the overall success of the incentive program. It is critical for them to have a sense of belonging at work and understand actual expectations. Manager remuneration should be competitive in the labor market and should match with the behaviors that are expected of them. Sales incentive plans for managers should account for a variety of qualitative and quantitative elements such as geographical sales outcomes, team performance, coaching parameters, etc. The managers should be encouraged to proactively coach and mentor reporting salespeople by providing them performance information of individual salespeople in a timely manner. Motivating and engaging your sales managers is critical for organization’s overall success, and significant improvement in the outcomes can be seen with right structure of sales incentive plans for managers. So one must cleary define the expectations from field sales managers as well as how the incentive pay plan will drive and reward conduct. Organizations engage in developing trust with their sales employees, and this investment may result in increased productivity and overall sales performance.
Continually evaluate and reinvent
Sales incentive plans that are designed today may not always be effective tomorrow. The insights and assumptions used for the deployment of incentive plan for the first time may quickly become obsolete and need some revision. The practice of repeating previous incentive plans without comprehensive incentive plan health check is one of the most typical and damaging sales compensation blunders. The primary purpose of sales incentive plan is to help organizations align the behavior of salespeople with strategic corporate objectives while ensuring that organization is able to retain top salespeople. To ensure that incentive plan continues to work, it is desirable to conduct comprehensive incentive plan health check and evaluate performance based on comparison with industry benchmarks, fairness and pay for performance metrics. This allow organizations to take timely actions and course correct sales compensation plan design so that it continues to be motivating and engaging. If there is a commercial case for making the change and all choices have been considered, the adjustments should be implemented as soon as possible. When goals are properly stated, measurements are straightforward, and sales quotas are considered realistic, sales teams perform at their best.
Reward the right behavior
Apart from great sales incentive plans, when outstanding performance is acknowledged and rewarded, teams are inspired to work and deliver more. When salespeople’s efforts are praised, they feel valued and encouraged to demonstrate the right behavior. A combination of quantitative leading metrics and skill and activity based qualitative assessments is advised to inspire the proper actions. When it comes to encouraging the proper behaviors, sales professionals must understand the connection between effort and reward. As a result, it is vital to keep up with compensation obligations by paying appropriately and on schedule. It is the only way to cultivate a culture of trust and loyalty while achieving repeated success. You can even think about going above and beyond acknowledgment with experiential rewards. A rewards programme can be set up in a variety of ways.
One of the most important drivers of sales force productivity and effectiveness is incentive compensation. Aurochs offers a strong Incentive Compensation expertise with major strategic emphasis on incentive plan creation, target setting, and incentives operations & administration services. Pharmaceutical companies use incentive compensation (IC) as a strategic tool to motivate employees and, as a consequence, drive desired behavior and outcomes.