While usually not directly involved in closing sales, business development professionals are responsible for driving business growth and can be involved in many sales-oriented discussions and negotiations. In fact, many efforts from your business development team can overlap with functions of the sales team. Some of these functions include identifying market opportunities, networking, building positive relationships with clients and company partnerships, as well as company outreach through exhibitions and conferences.
Overall, the efforts from the business development team can have a big influence on the overall performance of a sales team. For this reason, it’s not uncommon for companies to incorporate some form of incentive pay into salaries for their business development employees.
Tips for Designing an Effective Incentive Pay Structure
As with any role, incentive pay can be an effective way of motivating employees, enhancing performance, and rewarding employees for a job well done. When combined with a well-designed salary structure, incentive pay can help maximize results from your business development team and foster their efforts to support your company’s growth.
In order to effectively motivate your business development team, consider these tips when incorporating incentive pay into their salary.
Clearly Define Performance Metrics: When first implementing any form of incentive pay program, it is necessary to have a clear outline as to what is needed from your employees in order to earn incentive pay. Identify what key performance indicators (KPIs) align with the strategic goals of the business development team and what behaviors or activities you are trying to encourage. These may include reaching certain revenue targets, acquiring a certain amount of leads, strategizing market expansion, or the process of successfully brokering new company partnerships.
Establishing what performance metrics will be used to assess incentive pay eligibility will also help determine what rewards are commensurate and appropriate for each goal achieved.
Establish Realistic Targets: Whatever KPIs you are basing the incentive pay program off of, ensure that the metrics are measurable, achievable, and contribute to the overall success of the business development team. The outline for your incentive pay program should have challenging yet attainable performance targets that push your business development team to excel. Unrealistic goals can have the opposite effect and lead to frustration and demotivation among staff.
When setting targets, you need to consider past performance, what resources your staff have available to help facilitate their efforts, and what are attainable goals that all of your employees would be capable of achieving with the right effort. This will require regular review and adjustments to adapt to changing market conditions and business objectives.
Determine What Type of Incentive Pay to Include: Depending on your organization and the tasks assigned to your business development teams, you will need to determine what forms of incentive pay you want to reward your employees with.
If you have specific revenue goals that you are leaning on your business development team for, it might make sense to include a quarterly or annual commission payment based on a certain percentage of that revenue. Or, if you have a specific milestone that you are encouraging your team to meet, it may make more sense to provide a flat bonus. What incentive pay you choose to include in your business development rep’s salaries will vary based on what your goals for those employees are and how much of your budget you can allocate toward incentive pay.
Check-in with Employees Regularly: In order to keep your business development team motivated, it’s important to conduct regular performance evaluations to measure your employee’s progress against the established metrics.
Monthly or quarterly check-ins with your business development team can help foster growth and keep your employees on track for the year. These check-ins can also be helpful for identifying any gaps in the resources your team has or any roadblocks that may prevent them from achieving the goals specified.
If employees are struggling to meet the targets outlined for them, these check-ins can be a helpful way to provide feedback and guidance to improve their performance and the performance of your team as a whole.
Communicate the Incentive Pay Program: As with any employee, it’s important to clearly communicate the incentive pay structure and performance expectations from the employee. Employees should understand not only how they become eligible for incentive pay, but also when they will receive the incentive pay, and how much they are eligible for. Employees may become frustrated if there is a lack of clarity as to how they will be paid.
Manage Incentive Pay for Your Business Development Team
Incorporating incentive pay into your business development rep’s salaries can be a strategic way to motivate, reward, and increase the performance of your employees. After designing an effective compensation structure that includes incentive pay, it’s important to make sure that all of your employee’s incentive pay is calculated accurately.
Core’s customizable commission management application has all of the tools you need to accurately calculate any employee’s incentive-based pay structure. Additionally, our web-based application gives your employees complete visibility to the components of their incentive pay with access to our online portal.