Anyone who has watched Mad Men, will know that back in the 1920s, cigarette advertising was big business. The rival companies spent millions on advertising campaigns to persuade customers to switch to their brand.
Famously (although I hadn’t heard about it until Mad Men), Lucky Strike came up with the campaign slogan, “Its toasted” which referred to a specific stage of the production process. What was so clever (according to Don Draper) was that they could say whatever they wanted. Almost every other cigarette company was toasting their tobacco – it wasn’t clever or unique, it just created a brand associated with a natural and high quality manufacturing technique.
Where am I going with this? The thing to remember is that the actual quality of the product was completely irrelevant, it was simply the way it was portrayed that made the campaign a success.
So now to subtly turn this around and back onto incentives. The point is, it doesn’t matter what’s in the cigarette, what matters is that people believe in it.
All too often, the “brand” of the sales incentive program is forgotten. Frequently I hear the same feedback from reps – “I don’t understand how my plan works” or “They don’t want to pay us”. Notwithstanding the cost of time and external advisers that it takes to get an incentive program off the ground, the variable portion of pay can often amount to 5%-10% of top line revenue which is a significant investment for something that no one understands or believes in.
Effective branding of the plans doesn’t have to be a drawn out and expensive affair, it just requires putting ourselves into the shoes of the recipient. Often plan change comes about because the business has shifted its strategic direction and the plans no longer reflect that. This doesn’t mean we don’t want to pay people, it means we want to pay people for different things.
It is essential that managers understand the plans in a meaningful way that means they can effectively communicate them to the sales force and it is the job of HR to ensure that leaders have all the tools necessary to do this. Often, this means providing “train-the-trainer” materials along with management training sessions in order that they are able to sell the plans to their direct reports.
Plan change is often perceived as added complexity however this is often not the case, or at least not to the degree that is perceived. All that happens is that one set of variables has been substituted for another. A relatively simple and inexpensive “plan calculator” in Excel can help alleviate this anxiety making it fully transparent as to the levels of potential pay at different performance scenarios.
I routinely recommend to clients that, at minimum, train-the-trainer materials and plan calculators should be developed to help create and sell the sales incentive brand to the sales force.
Next time you change an incentive program, don’t forget to remind people – Its toasted.