ROI of Sales: 3 Approaches You Can Use

DiMisa, who is senior vice president, Sales Force Effectiveness, at Sibson Consulting, outlined eight design challenges during a recent webinar sponsored by BLR and HR Hero.

ROI #1. Reduction in Compensation Cost of Sales Through Improved Plan Design and Measurement

Reducing total incentive compensation costs through improvements in design and planning can yield a near-term payback and substantial return on investment. After a compensation redesign effort, the companies we work with typically see a 5% decrease in costs due to realigned priorities and more efficient compensation plans.

ROI #2. Increase in Available Sales Resources and Efficiencies
Without Adding Headcount

When conducting sales compensation redesign, the offshoot is typically increased productivity. A company can capture more productivity through increased emphasis on key strategies as supported by the compensation plan. Additionally, with more emphasis on strategy, reps are more likely to have a better focus, which increases their direct selling time.

Typically, a sales organization spends approximately 40% to 60% of its time selling, or about 800 to 1,200 annual hours of 2,000 worked per rep (cross-industry average). Companies that take a look at their sales functions during a sales effectiveness assessment can recapture ½% to 1% of total time for selling, or 10 to 20 hours per year per rep.

ROI #3. Reduction in use of Rewards and SPIFFs

Through the use of a better defined compensation program, employers can expect to see less need for reward programs and SPIFFs because the compensation plan will better support the needs of the business.

With less of a need for award and recognition programs, a 20% to 25% reduction in award programs typically exists when plans are better aligned to meet the needs of the business.

Looking for that seat at the table? Start with a unified strategy woven through your comp philosophy, HR policies, and your recruiting efforts. Join us for a FREE interactive webcast on April 30, 2013 all about Strategic HR. Learn More

Sales Compensation Report Card

One valuable tool mentioned by DiMisa is the Sales Compensation Report Card. This form, reproduced here, helps you measure the sales orientation of an individual employee or class of employees based on five factors.

Measurement, metrics, and ROI, key underpinnings of your HR strategy. The HR function is most effective when its activities are integrated and coordinated to achieve defined business objectives. Strategic training activities must reinforce strategic recruitment efforts and your compensation philosophy should drive performance and results.

How to get there? Fortunately there’s timely help in the form of BLR’s new free webcast—Strategic HR: How to Link Recruiting, Development, Pay, and Performance. In just 60 minutes, you’ll learn everything you need to know about designing and implementing a strategic HR function that works together to increase individual and organizational productivity.

Special thanks to our sponsor, Halogen.

Register today for this interactive webinar, and learn how to put metrics into practice to prove the link between HR activities and an organization’s bottom line.

Learn how metrics can help you prove the link between HR activities and your organization’s bottom line. Join us for a FREE interactive webcast on April 30, 2013. Earn 1 hour in HRCI Recertification Credit. Register Now

By participating in this interactive webcast, you’ll learn:

• Define HR strategy and explore various strategic management principles.
• Determine the strategic elements of different functional areas within HR.
• Identify key factors that integrate different HR activities to one another in a strategic manner.
• Identify the linkages between HR activities and organization’s bottom line
• Demonstrate the role and effectiveness of HR activities in delivering an organization’s competitive advantage.

Register now for this event risk-free.

April 30, 2013
2:00 p.m. (Eastern)
1:00 p.m. (Central)
12:00 p.m. (Mountain)
11:00 a.m. (Pacific)

Approved for Recertification Credit

This program has been approved for 1 recertification credit hour toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI).

Join us on April 30—you’ll get the in-depth Strategic HR: How to Link Recruiting, Development, Pay, and Performance webcast AND you’ll get all of your particular questions answered by our experts.

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Train Your Entire Staff

As with all BLR/HRhero webcasts:

• Train all the staff you can fit around a conference phone.
• You can get your (and their) specific phoned-in or emailed questions answered in Q&A sessions that follow each segment of the presentation.

Find out more