Axtria Inc., a global leader in award-winning cloud software and data analytics in the life sciences industry, released findings from its annual incentive compensation (IC) benchmarking studies undertaken for the US and Ex-US markets.
Incentive compensation in the life sciences industry is a form of variable compensation where the earnings of a salesperson are calculated based on a variety of factors, such as sales performance, manager ratings, activity data, and patient-based metrics, among other things. Incentive compensation management is the strategic use of incentives to drive sales growth and promote desired behaviors.
“Incentive compensation continues to play a critical role in improving brand performance and sales rep effectiveness,” said Asheesh Sharma, Head of Axtria’s Commercial Excellence Practice. “The need to be aware of best practices that drive impact and keep field teams aligned with corporate goals has heightened as companies move toward specialized therapeutic areas, omnichannel capabilities, and try to respond to changing customer needs, preferences and pricing pressures.”
Below is a sample of insights across the two studies that delve deep into industry trends and best practices in IC design and operations:
Incentive Compensation US Benchmarking Study:
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Oncology and Rare Disease HCP Teams have higher upside earnings potential for top performers with an average pay cap of 350% versus other specialty teams with an average overall pay cap of 250%.
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Teams detailing launch brands have higher payout differentiation than teams detailing more mature brands.
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The most common IC plan component for HCP and account teams is Individual Goal Attainment, while Management by Objectives (MBOs) is the most common for market access teams.
Incentive Compensation Ex-US Benchmarking Study:
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Management by objectives (MBOs), continue to be part of incentive programs. With omnichannel planning, they will remain in focus with the evolution of MBO key performance indicators (KPIs).
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High variable pay appears to be a characteristic of certain geographical regions, with Asia Pacific (APAC) and Japan exhibiting a high-risk/high-reward philosophy compared to other regions studied.
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Contractual Sales Organizations (CSO) are most common in Primary Care compared to other therapeutic areas studied.
The two studies, viz: 2023 US Incentive Compensation Benchmarking Study and 2023 Global (Ex-US) IC Benchmarking Study, are now available for demonstration and discussion.
For more information on these studies, please visit CE Benchmarking Hub (axtria.com).