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THE SYNCHRONIZATION OF BUDGET, TARGET AND INCENTIVE
I know you might get familiar with these three words in almost every weekly/ fortnightly/ monthly or annual meeting. I would not wonder if these words might even haunt you in your dreams too. Isn’t it??
Let’s simplify it-
PROPER BUDGET + SET TARGET = INCENTIVE EARNED
This means, if sales budget allocation and target are clear in your mind then you might earn a good amount of incentive.
You may be a step closer to buy that coveted car or flat or even a piece of jewellery for your spouse, because you will flourish financially by earning incentive besides your set salary. After all, who doesn’t want money?? We all do!!
In the words of Mr. Richard Branson, the owner of the Virgin Airlines and the famous philanthropist, -“take care of your employees, your customers will be taken care of automatically.”
Being an entrepreneur and philanthropist myself, I also hold the same point of view, it’s the sales staff who are an integral part of any company and it’s them who bring the maximum revenue to the company and if they are properly trained to make the optimum utilization of the allotted budget, not forgetting their target and goals, they can very easily come close to their opportunity to earn rewards in the form of incentives. They must clearly understand the interrelation amongst target, budget and incentive and how it’s going to be beneficial for them.
Let us study these three terms, which if planned properly and worked in synergy, will take the company to new heights.
TARGET:-
Achieving your goals isn’t a slam dunk.
I recently started going to a personal trainer. In our first session, he asked, “So, what are you trying to accomplish?”
“To get in better shape.” I answered hesitantly.
“Well, without a clear goal, you will not be able to see your progress, you will lose momentum.” he explained.
“In that case, I want to fit in my dresses from last year.” I said coyly.
“Now, we are talking.”
So you see, you must have a proper TARGET, in every sphere of life.
Over the years, I have seen many sales people get goal and action planning and I have seen many fall short. Without a clear target they don’t know where they are headed. All you need to do is to set a target for yourself- that can be as simple as an annual sales target.
The foremost barrier that stands between you and your Target is you yourself……..So before start to work on the Target, first sell the Target to yourself and make yourself Believe that the set Target is achievable. Once your answer is yes, then you are in great shape to get started.
Here is a roadmap we suggest you to follow-
- Review your sales goals first thing in the morning and say it loud (yes, seriously). At the end of the day, review how the day went and how much you succeeded.
- You must practice this for the whole week and during weekends, review your progress and set goals for the next week.
- Once per week, discuss your goals and targets with a goal partner / mentor/ coach/senior. You may also discuss your hassles that are holding you back from your goal.
- As you are crafting your small goals, you should also take care of your BIG PICTURE GOALS, e.g. – becoming the top performing sales rep in the company, or getting promoted to the next level) and align them with shorter goals.
Don’t fret too much about the tracking sheet, but do concentrate on taking a step toward your goal every day.
Keep in mind, sales are everything- they are the lifeblood of every business.
BUDGET:-
Budget should be ambitious but realistic. Don’t map out a budget that you can’t meet but don’t underestimate the possibilities. A budget serves as a guide; planning and creating a budget to guide your sales effort can help you keep control of your resources and stay on track.
The company must clearly define and assign the responsibility for the budgeting process to its staff. To maximize the benefits of budgeting process, employees must not only be responsible and accountable, but also need to be in agreement with overall objectives of budgeting process. The decentralization of the budgeting process will motivate the staff to take part in the development of their budgets and learn how their activities are interrelated with the other segments of the company.
The right knowledge and the right amount of budget along with the liberty will allow the sales people to invest at the right place at the right time so as to gain maximum sales advantage and hence fulfill the allotted target.
INCENTIVE:-
The biggest motivation now a days is Monetary Gain as for the Masses and, Incentives motivate behavior.
Performance Hungry, sales representatives play to win and learn quickly how to game the plan.
According to statistics revealed in the American workplace, employers who are able to effectively engage their workers in the organization, realize 38% higher productivity, 50% higher sales, 27% higher profits and 50% higher loyalty levels among customers. This is the reason why so many top U.S. companies continue to invest money in employee incentives, even during challenging economic times.
Incentives are critical to meeting business objectives. The increase in global competition poses a difficult challenge for the employers as well as employees to meet their objectives. Once the target and budget have been fixed, the next level must be to strive to reach those goals to take the sales higher and earn a handsome amount of incentive.
The right amount of incentive helps in retaining the right people in a highly competitive job market. The various monetary and non-monetary incentives will boost up the morale of the staff and in return they will make the company’s goal their individual goal and will be motivated to achieve it with all their zest and zeal.
The harmonization of budget, target and incentive bears a direct impact on the employees. If the sales staff has a clear perspective of his target and also he is well aware of the amount to be invested in the required field then his final destination to earn rewards and recognition will not be far from him.
Such employee will not feel the need and constant supervision of his immediate manager or supervisor, because he will be self-driven and self-motivated to achieve his goals. His efforts to take the company and his individual position to a higher level will increase automatically. Hence, benefitting the company.
I see no harm in providing some liberty to staff, this would definitely make them realize their responsibility and accountability towards their work, their seniors and colleagues and THEIR Company. Yes, they need to feel that the company is their own, they are not mere employees, but an integral part of it.
In this regard, I can recall a famous saying, “strict parents raise the best liars.”
In the same manner, the relation of a company with that of its employees should be of a child and parent, it should nurture and take care of them as their own children so that the employees can confide in them and in return take their parents name to a new height and make them proud.
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