Question

Topic: Career/Training

Creating A Bonus Plan For Marketing

Posted by Anonymous on 7/12/2010 at 2:10 PM ET 125 Points
Hi all,

Any ideas or input would be much appreciated.

I am currently the Marketing Director for a 60 person company. I was the first marketing person in-house they have ever worked with or hired.

This year, I was asked to come up with a marketing bonus plan for myself based on the quantifiable results of my efforts.

In addition to traditional outbound marketing efforts I have created a inbound marketing strategy for the company. I am trying to figure out the best way to structure a bonus plan using the metrics available through the newer inbound methods we have created.

Does any one out there have any experience with this? I don't want to base the bonus structure on an increase in sales, as much as the activity my efforts create.

Thanks a million!
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RESPONSES

  • Posted by michael on 7/12/2010 at 3:03 PM Accepted
    Jennifer,

    First make sure you understand and can document the lifetime value of a customer. That is going to be the key to the program.

    Marketing is nothing if it doesn't drive revenue(sales) so don't back away from that. It's likely management will want to tie it up.

    You can also look at conversion rates and determine a standard. That way if the conversion rate drops, you still get rewarded for the activity level generated by your efforts.

    Michael
  • Posted by mgoodman on 7/12/2010 at 5:09 PM Accepted
    My experience is that it really needs to be simple -- K.I.S.S. -- so that management doesn't have to think too hard or make any calculations.

    Start with really basic things like: (1) Develop and produce online and printed (if appropriate) brochures -- or update existing ones -- for each major product; (2) Generate at least xx qualified leads per month (with some definition of what makes them qualified); (3) Visit at least xx customer sites each quarter (with a salesperson?) and report learnings and conclusions in writing within 5 working days of each visit. Etc.

    You should probably have no more than 5 of these, and they should all be activities that management will feel are important for a marketing person to do.

    Don't get too hung up this first year with ROMI calculations or explaining lifetime-value-of-a-customer. That will be more appropriate for Year 2 or even Year 3.

    K.I.-VERY-S.S. in the first year or two.
  • Posted by Levon on 7/12/2010 at 6:30 PM Accepted
    I would ask for a 20% cut of the action as they are asking you to draft up your own compensation.
  • Posted by mgoodman on 7/12/2010 at 8:39 PM Moderator
    Levon, I have had a number of situations where the CMO drafts his/her own bonus plan. It's then presented to senior management, and if it seems unrealistic or too easy, they ask you to revise it. Often the CMO sets very high standards -- perhaps to show how great he/she wants to be -- and then it's management's job to help them be more realistic.
  • Posted by telemoxie on 7/13/2010 at 8:11 AM Accepted
    just a thought... is management most interested in a bonus plan, since they are concerned that they are not paying enough money... or is management more focused on measurability and metrics and performance?

    Or, have they received a competing proposal from another person or organization who promises highly predictable and quantified results?

    If I were called upon to write such a plan, the focus of my plan would be on how I could increase results, increase accountability, increase measurement of results... rather than trying to fit some sort of metrics to inbound programs I had previously created.

    I would also include a section about how to evaluate and to budget for and to test new approaches.
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