Tuesday, April 29, 2008

Sales Compensation Best Practices in the Banking Industry

Last week I attended the Accenture/Callidus Webinar "Industry Banking Best Practices for Maximizing Your Customer Value and Sales Behavior". Below is a summary of some of the information that was discussed. I will leave out Callidus Wachovia's case study for another post and focus on Accenture's point of view.

Kirk Coleman, senior executive at Accenture discussed how the Banking industry was facing many issues and challenges. Regardless of the current market situation, customer expectations keep rising. Those who can exceed these expectations will have an opportunity to distinguish themselves from the competition.

Best Practices

  • Drive an incentive culture, not a bonus culture
  • Focus on the right employees
  • Timely delivery of rewards
  • Support capability development
  • Plan for a journey - not a "project"
Tests that banks should perform regularly to check and maintain their effectiveness:
  • Top performer's pay relative to the market
  • Pay dispersion between top and average performers
  • Pay and performance correlation
  • Alignment of payouts with key financial/marketing objectives
  • Variability of incentive compensation year-over-year
  • Speads of quota attainment versus plan spread
  • Relevance and controllability of performance measures
  • Time spend correcting payouts

Kirk noted that behavior of customer facing employees is increasingly important in the banking industry. Developing capabilities across channels is important to avoid improving in one while losing in another.

Another point that Kirk stressed is the importance of timely delivery of rewards. Many banks have quarterly and annual bonus, but in these cases it is difficult for payees to see the relationship between their incentive pay and their behavior. In many cases a monthly incentive strategy would be more appropriate to be able to re-enforce the desired behaviour.

Kirk concluded by saying that Sales Compensation is essential for banks to effectively align sales force behavior with their goals.

I found an additional paper by Accenture "Sales Performance Management: Enterprise Incentive Management from Accenture" which adds some details to the topics covered by Kirk during the presentation.

2 comments:

Anonymous said...

Who is the guy in the picture?

Julien Dionne said...

Mark "The Hammer" Coleman (born December 20, 1964) is an American mixed martial arts competitor, Professional wrestler, former UFC Heavyweight Champion, PRIDE 2000 Grand Prix Champion, and member of the UFC Hall of Fame.

I was looking for a picture of Kirk Coleman, but that's still how I picture him in my mind.

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Ottawa, Ontario, Canada
Julien Dionne is a well-rounded consultant with global business management experience and outstanding technical, business and leadership skills. He earned a Bachelor of Applied Science in Software Engineering from the University of Ottawa, Canada, and he is a member of the Canadian Professional Sales Association. The views posted within this blog do not reflect the views of Julien’s current or previous employers and clients. Julien can be reached at julien.dionne@gmail.com