Case Study: Sales Compensation – Consumer Products (Direct Store Delivery)

The Issue

One of North America’s largest consumer products direct-store-delivery companies was facing increasing questions and doubts surrounding the sales compensation program for its Route Sales Representatives (RSRs). Once regarded as an elite employer in the DSD space, sales managers were encountering challenges recruiting and retaining RSR talent, and overall, company sales results were flat after years of consistent growth. Also of concern, the organization had over 800 compensation programs in place to pay its 14,000 RSRs, so stakeholders openly wondered about the rationale behind the current pay program.

The Solution

Using an inclusive, comprehensive, and diligent assessment approach, we reviewed the performance of the current plans, identified the needs of new plans, and created a new methodology for delivering the RSR pay program. The current program was based largely on flat commission, with no base salary, and limited upside or downside risk. Hundreds of RSR interviews revealed that the plans were driving minimal motivation, and high performers were at increasing risk of turnover. Among various plan improvements, the biggest shift was tying RSR pay to the achievement against appropriate route goals, rather than using a pure commission program that had lost its effectiveness.

The Impact

The organization embarked upon an extensive piloting program to test the new plan designs. Results after two years have bee n considered stellar. Revenue growth in the pilot areas has been over 3%, versus flat growth in the control areas. Costs have remained relatively flat. The revenue increase has represented significant profit enhancement, and plan are being made to roll out the new designs to the remaining sales regions across the organization.