muthu-lakshmi1
Hi, I Need help preparing a framework and incentive plan for our sales and marketing team. Please share inputs on :
- What should be covered in Incentive plan/policy
- Percentage of incentive given to sales person and marketing person based on designation level targets
- Should the incentive % be different for repeat business & new business
- Our product is water purifier ..we are manufacturing and employees in sales and marketing team working in corporate office
- Anything else

From India, Madurai
Dinesh Divekar
7879

Dear Muthu Lakshmi,

The point-wise replies to your questions are as below:

- What should be covered in the Incentive plan/policy?: - An incentive is an additional payment (or other remuneration) to employees as a means of increasing output. Sales incentive is paid to the salespeople when they significantly exceed their targets. 

- Percentage of incentive given to the salesperson and marketing person based on designation level targets: - This is a company-specific question, and we, the members of this forum are external parties. Hence, we cannot comment on it. However, the simple rule is higher the target exceeded, the higher the incentive.

- Should the incentive % be different for repeat business & new business?: - Yes, the percentage of the sales incentive may vary for the repeat business and the new business. This is because to get the new business, the salespersons have to navigate the uncharted waters. In contrast, a repeat business comes from the existing customers. The salespeople know their needs, their psychology, and may build a rapport with the person concerned.

Other points: - Fixing the percentage for sales incentives is always a challenge. If the target is too low, everybody becomes eligible to get the incentive. If the target is too high, the salespersons may think it is unattainable and may not even put in their efforts to get them. Therefore, a person who decides on the incentives must know his people and the market very well.

Additionally, while designing the sales incentive policy, please ensure that the salespersons' conveyance allowance or transport allowance is paid on time. If the salespersons doubt the company's timely clearance of these allowances, they may lose their steam and even if you make a policy on incentives, it could be rendered ineffective.

Thanks,

Dinesh Divekar

From India, Bangalore
loginmiraclelogistics
1073

The %age of incentives and the target thereof are left to your choice.
I wish to add a few aspects to be kept in mind at the time of designing the scheme.
1. Two different schemes may be considered- one for peak (summer-April-June) seasons and the other for off seasons.
2. It may be important to include the 'After sales Service Teams' (and AMC) also. Because this is the team who really are going to enhance your brand value in the market/among the consumers,
by cutting down 'down time' to a negligible levels. Should also include Inventory/stores, QC,R&D and logistics personnel.
3.The hierarchy may be down from middle level management, say from Manager downwards.
4.An attractive buy-back option with considerable discounts could do wonders, if in place and if not device it which could augment your sales/turnover by retaining repeat customers. .
5.I may add, in addition to outright sale-leasing & hiring, deferred payment under EMI also may be considered to garner major market share. This scheme if and when introduced also aid growth by modifying the incentive scheme.

From India, Bangalore
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