Who's Your Most Valuable Salesperson? How to Forecast Performance - and then Tailor Training and Incentives

Conventional salesperson appraisals only measure previous performance, which do not predict how an individual will perform in the future. As a result, underperformers may be overvalued and star performers may be undervalued. Firms can use statistical techniques to calculate future value, linking performance with the forms of incentives and training each sales representative has received. Firms should quantify the effects of incentives and training, estimate future profits, and subtract the cost of the incentives and training to obtain a representative's future value. Tailor rewards and instruction based on whether the salesperson is incentive-driven or training-driven. Reallocating incentive and training investments boost future value and have a positive impact on revenue.