Effective Sales Incentive Design

There is absolutely no relationship whatsoever between a  company's sales incentive plan structure and its gain or loss of market share.

Sales compensation is all about alignment.  In 2003, Indian River consulting conducted an broad study of wholesale distribution compensation practices.  They found and presented the following:

"There is absolutely no relationship whatsoever between a  company's sales incentive plan structure and its gain or loss of market share."

The statement was bold and went against the grain of conventional thinking; however, the illustration below shows their is no relationship between compensation mix and market share gain.  Is shows the relationship between salary as percent of total composition and market share gain or loss.  The table contains a fundamental insight that needs to be clearly understood.  It presents compelling evidence that

"there is no perfect pay plan.'

ACTION POINT:  Pursue market share growth first.