Thomas from Ariyh - 🎓 Sales activity incentives
🎓 Sales activity incentivesGiving sales team incentives based on activity targets (e.g. calls made, demos given) - and not only commissions on sales results - boosted sales by 6-9%.New to Ariyh? Join 6,318 evidence-based marketers for 3min tips 💡 based on research 🎓 to grow your business 📈 If you find these tips useful please share them with your colleagues and friends, Ariyh grows thanks to you! Today’s tip is brought to you by… Attest Launching into new regions requires a big marketing budget, right? Not necessarily! Vegetable box brand Oddbox successfully expanded into three new UK regions earlier this year - and insights from Attest helped them do it cheaper and more effectively. After finding they had more brand awareness than expected, Oddbox realized they could cut campaign costs. Meanwhile, discoveries about the best types of advertising in each region helped them take the biggest bite of the market. 📝 IntroAbout 50% of companies pay incentives to their sales teams (e.g. commissions, bonuses), for a total of $800 billion each year (data from 2012). These incentives are mostly based on sales. Sell and you receive a commission. Fail to sell and you don’t. But a small number of companies also give so-called activity-based incentives. These are rewards for intermediate, measurable goals, such as booking meetings, prospecting (e.g. find 20 new leads per day), presenting (e.g. give 5 demos). Are these companies doing something we should all be doing? Let's take a look at this new study done in collaboration with McKinsey & Co. Want to sponsor Ariyh? Here’s all you need to know. Previous tip: How to boost revenue with free samples (All tips here) Give incentives to sales teams based on the calls they make, not only the sales they closeImpacted metrics: Customer acquisition | Customer spending 📈 RecommendationPay activity-based incentives to your sales team to boost performance and overall sales. These are incentives based on targets on certain sales activities. For example, client calls per week, new leads found, or presentations given. They are more effective than only giving bonuses or commissions on final sales. When given only to supervisors, but not salespeople, they are almost as effective as giving them to both. So give them only to supervisors to reduce your costs. 🎓 Effects
New here? Subscribe for the latest marketing research 💡 from top business schools 🎓 in 3-min practical tips 📈 twice per week. 🧠 Why it works
✋ Limitations
🏢 Companies using this
⚡ Steps to implement
🔍 Study typeField experiment (of an undisclosed large pharmaceutical company in a South Asian country over 3 years with an average of 412 salespeople and 71 supervisors). South Asia 📖 ResearchRao, R. S., Viswanathan, M., John, G., & Kishore, S. (June 2021). Do Activity-Based Incentive Plans Work? Evidence from a Large-Scale Field Intervention. Journal of Marketing Research. 🏫 AffiliationsMcCombs School of Business, University of Texas at Austin; Indian School of Business; Carlson School of Management, University of Minnesota; and McKinsey and Company. United States and India Remember: Because of the groundbreaking nature of this paper, it could be disproven in the future (although this is rare). It also may not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely. Rate today’s tip to help me make Ariyh's next tips 🎓 even more useful 📈 How was today’s tip? Want to sponsor Ariyh or ask a question? -> Reach out at thomas@ariyh.com New to Ariyh? -> Subscribe below or read other 3min marketing tips here |
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🎓 The rule of three in persuasion
Saturday, July 10, 2021
To be most persuasive, use 3 positive claims at once in your message (eg ad, presentation). They are sufficient to show a pattern, but not enough to make people skeptical.
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