Consumer Packaged Goods (CPG)

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CPG Experience

We have developed sales incentive plans for companies who sell aftermarket auto parts (wiper blades, spark plugs, etc.), power tools, faucets and fixtures, pet products, and grocery store poultry. Many of the companies we have worked with sell through standard retail outlets, large scale industrial suppliers such as Grainger, or any of the hundreds of mom and pop supply shops throughout the country. Some also sell the same products B2B to auto repair shops, to construction trades for the power tools, or to hospitality designers and builders for the faucets and fixtures.

Right Tool for The Job

Each of these types of sales takes a different type of sales rep, a different role definition and a different compensation plan. We have developed them all. From national accounts and industrial supplier plans to individual retail outlets that include considerations for marketing budgets, end cap set ups and appropriate measurements of pull through (). In this world, the rep is the quarterback who calls the plays, but relies on the rest of the team to make the sales happen. It’s not uncommon in this world for us to have representatives from marketing or product development/management to be included in the sales compensation design team.

Frequency Matters

In some of the companies, a highly variable plan with monthly or quarterly incentive payouts makes all the sense in the world. Meanwhile, in others (such as pure retail pull through) the campaigns are worked on annually and executed 1x a year, which means you can only measure the results one time at year end. In this case, it’s more sensible to rely on salary throughout the year to provide the living wage to your reps and provide an annual bonus that can reward them for the effective execution of the marketing plan.

ECONOMIC FACTORS

It is important to consider the multitude of economic factors that can disrupt any of these B2C industries. Is the product a luxury item that will ebb and flow with spending trends? Is it a product that is likely to be impacted by a spike in construction sales, as can happen after natural disasters (a windfall clause is appropriate as are calculation methods that allow for smoothing of peaks and valleys in performance)? Is it a product that is in the throes of a consumer trend (non-GMO, antibiotic free, and/or organic for nearly all food products these days)? If so, you need to consider the market demand vs. economic return on these products and reward your sales reps for selling accordingly.

IF YOU ARE REDESIGNING YOUR COMPENSATION PLANS, ASK YOURSELVES THE FOLLOWING QUESTIONS:

Are your sales roles clearly defined or are they conflicting with each other in the field, undercutting each other with the same end customers? This is entirely possible given the number of channels that a buyer can access to get to any number of CPG products (retail, wholesale, buying clubs, etc.). For example, are your Sam’s Clubs reps destroying your market for your private label brands being sold through the grocery store?
What are the top 4-5 key accountabilities for each of the sales roles in the organization?
What are the performance expectations for each of those accountabilities? How many new customers? What type? How far from forecast is acceptable? What is the right volume vs. profit trade off?
What individual sales results can you measure in the system – ACCURATELY – to be able to use it in the incentive plan? A good rule – if you can’t measure it, you can’t pay on it – is far too often ignored until the first sales plan checks are ready to be cut. Reps must believe in the plan, and for that they need data. Good hard data. If you can’t give it to them, at the level they need (territory or even store), then you may need to rethink how you approach incentive compensation.

Common Project Types

EXPRESS PROJECT

When your needs span several roles, but you have only a few people, our Express Project is your best bet. We’ll spend time with you and your senior leaders understanding your business and working alongside you to develop the plans as quickly as possible. We’ve successfully executed hundreds engagements for small to medium-sized organizations just like yours (typically 5 to 50 employees).

An Express Incentive Project includes:
• Strategy and structure assessment
• Compensation design for up to 5 roles
• Includes salary bands and incentives
• Market benchmarking of pay levels for those roles
• Plan documentation
• Pro-forma economic modeling (minimal historical testing)
• Roll-out guidance
• Development of an incentive calculator via Excel
• Additional automation possible
• 3 months of post-project support
• Project turnaround is approximately 4-6 weeks

1P1P PROJECT: ONE PERSON, ONE PLAN

A 1P1P Project is great for start-ups and small companies! It is our smallest project size, but this makes it ideal for those who need a single plan immediately.

The 1P1P Project includes:
• All plan design details
• Basic market pricing
• Economic testing
• Incentive plan documentation
• Outlining of goals and expectations
• Assessment of business goals and…
• Assessment of impact of this role on those goals
• Role clarification
• Development of an incentive calculator via Excel
• Additional automation possible
• 3 months of post-project support
• Project turnaround is approximately 2-3 weeks

FULL-SERVICE COMPENSATION PROJECT

When you need to clarify your business objectives, streamline your organization structure, improve employee accountabilities, AND want to develop plans for several interconnected roles, a Full-Service Compensation Project does it all! This project features multiple virtual meetings with our developers and your design team and is often selected by medium-sized to larger companies, as well as small companies undergoing major transformations.

A Full Service Compensation Project includes:
• Business goal clarification
• Incentive compensation plan design for all roles in scope
• Salary bands suitable for job postings
• Development of career levels for highly populated roles
• Employee change management
• Extensive pro-forma and historical economic modeling
• Goal-setting sharpening
• Market benchmarking of pay levels for all roles in scope
• Roll-out support and guidance
• Organization redesign and role change/definition
• 12 months post-project support
• Detailed and automated Excel calculator
• Additional automation possible
• Possible introduction to one of our EIM vendor partners
• With integration assistance into their platform
• Turnaround time is at least 90 days
• May vary depending on size and magnitude of change