Insights on Incentives has as its sole purpose the facilitation of thought and discussion on the subject of incentive compensation for banks and credit unions.  Once a month NSS will be sending out an e-mail with one insight on the area of incentive compensation.  The insights will come from our research, discussion with customers and finally, those of you who decide to offer an insight on this important sales management issue.

A blue bird sale was a term we used when I was with IBM to describe an order that flew in through a window and landed on a salesperson’s desk. No specific effort was involved in getting the order, but the salesperson did get commissioned on it since it was in his or her territory. It was part of the sales game and happened to every salesperson every year.

We hear this issue come up in our dealings with both banks and credit unions. This often is focused on the fact that a customer walks into a branch to open an account. No or little selling is required to get the business. The question that arises from those involved with implementing an Incentive Compensation system is how we recognize the sales effort as opposed to order taking.

There are a couple components to the answer. First, we need to recognize that some sales come harder than others. It is a fact in almost every sales position. The other component is how we design incentive programs. Goals, or plan numbers, should reflect some expectation that a piece of the sales job is order taking. In addition, thresholds for payment also should reflect the fact that certain sales happen without a proactive sales effort. What you do not want to introduce is some subjective assessment of sales effort when determining what gets compensated and what does not. This is better dealt with in the realm of establishing sales goals and thresholds to be met before any incentives are earned.

Insights on Incentives is brought to you by NSS Corp.