Towers Perrin and Synygy Release Survey Findings on Sales Incentive Plan Design and Governance in the Pharmaceutical Industry

The fifth such study sponsored and produced by Synygy and Towers Perrin, this year’s survey focused on the compensation plan design and governance practices for primary care sales representatives, specialty sales forces, hospital representatives, and managed care account executives.

Compiled from the responses of more than 40 pharmaceutical organizations representing more than 78,000 sales representatives, the findings are a key information source for professionals in sales, sales operations, finance, HR, and others responsible for the design and analysis of pharma sales compensation plans.

Key findings indicate:

• Despite significant change in the economy and the industry, fixed and variable pay ratios did not change significantly when compared to previous years.
• Plan designs reflected the impact of the recession in a variety of ways, including: modification of payout curves, defining more stable performance measures, changing use of contests and SPIFFs, adjusting quotas, discretionary fund usage, and/or increased use of caps.
• Despite decreased visibility and forecast uncertainty caused by economic conditions, quota-based plans continue to dominate. However, companies reported an increased tendency to make quota adjustments when the underlying assumptions turn out to be flawed. Some indicated that they simplified quota-setting methodologies, possibly because of reduced faith in market potential estimates.

“We appreciate the willingness of so many companies to share their insight and experiences,” said Mark A. Stiffler, Synygy president and CEO. “The cumulative findings from these annual surveys contributes greatly to the body of knowledge about how the pharmaceutical industry overall designs and manages incentive compensation plans.”

“The survey offers a unique and in-depth view of how pharmaceutical sales compensation plans continue to evolve and adapt to the profound changes in the industry,” added Mark Flavin, a Towers Perrin principal who leads the firm’s global Sales Force Effectiveness and Rewards practice. “Although pharma companies are engaged in some dramatic rethinking of their go-to-market models, their direct sales forces remain their primary marketing vehicles. Optimizing the sales compensation investment is a key business driver for these organizations.”

For more information on the 2009 Survey of Strategic Sales Incentive Plan Design and Governance in the Pharmaceutical Industry, contact Erich Sachse, Synygy managing consultant, at (610) 494-3300 ext. 7280 or at sachse@synygy.com; or Elliot Scott, Towers Perrin senior consultant, at (212) 309-3679 or elliot.scott@towersperrin.com.

About Synygy

Synygy is the largest and most experienced provider of sales performance management (SPM) software and services. These include SPM solutions for: sales compensation management (incentive compensation; rewards and recognition; and total compensation); sales communications management (sales portals; reporting, dashboards and analytics; and analysis, alerts and answers); sales goal management (territories and channels; pipeline analysis and forecasting; and quotas and objectives); and sales process management (recruiting, evaluating and training; workflow processes; and data repository and data processes). Based in Chester, Pennsylvania, with extensive operations in Europe and Asia, Synygy has achieved 18 continuous years of success. www.synygy.com

About Towers Perrin

Towers Perrin is a global professional services firm that helps organizations improve performance through effective people, risk and financial management. The firm provides innovative solutions in the areas of human capital strategy, program design and management, and in the areas of risk and capital management, insurance and reinsurance intermediary services, and actuarial consulting. Towers Perrin has offices and alliance partners in the United States, Canada, Europe, Asia, Latin America, South Africa, Australia, New Zealand and the Middle East. More information about Towers Perrin is available at www.towersperrin.com.

Synygy Inc.
Sue St. Laurent, 610-494-3300 x7259
St.laurent@synygy.com
or
Towers Perrin
Joe Conway, 914-745-4175
joseph.p.conway@towersperrin.com