Axtria Inc., a global cloud software and data analytics company for the life sciences industry, has officially published results from two new comprehensive benchmarking studies i.e. Global (Ex-US) Incentive Compensation (IC) Benchmarking Study and US Incentive Compensation Benchmarking Study.
According to certain reports, these studies provide critical insights into the evolving landscape of sales compensation trends, and therefore, empower life sciences organizations to design and implement effective incentive programs that drive growth and profitability. Talk about each study on a slightly deeper level, we begin from 2024 US Incentive Compensation Benchmarking.
The stated exercise, for starters, informed us on the prevalence of IC plan types. More on that would reveal how individual goal-based plans remain the most prevalent type for Healthcare Providers (HCP) and account teams, while on the other hand, all market access teams were found to consistently incorporate Management by Objectives (MBOs) into their IC plan structure.
Next up, the study revealed a substantial prevalence of data metrics. Here, demand units-based metrics remain the most prevalent data metric for HCP teams. Even though net sales/revenue metric utilization has declined significantly for HCP sales teams, dropping from 25% in 2023 to almost 12% in 2024, it has still seen a notable increase among account teams, rising from 18% to 36%.
Beyond that, it must be mentioned that patient starts in rare diseases have surged, climbing from 29% in 2023 to over 40% this year. Such an uptick reflects growing focus on specialty areas.
Another major finding put on display by this study is rooted in the surging prevalence of MBOs. We referred to how all market access teams consistently incorporate Management by Objectives (MBOs) into their IC plan structure, but what we haven’t mentioned yet is the fact that an estimated 40% of account teams also have MBOs components in their IC plans. Apart from that, around 10% of HCP teams’ IC plans are currently understood to have MBOs.
The last piece of highlight provided by 2024 US Incentive Compensation Benchmarking Study focus on overall pay cap. Basically, it was discovered that oncology and rare disease IC plans tend to provide top performers with higher earning potential. You see, average pay cap is 2.75x and 3.5x the target pay for oncology and rare disease, respectively.
“These studies underscore the importance of leveraging robust benchmarking insights to adapt to rapidly changing market dynamics,” said Asheesh Sharma, Head of Commercial Excellence at Axtria. “Whether optimizing pay structures, integrating MBOs, or redesigning IC plans for specialty areas, the insights from these studies are pivotal for organizations to achieve strategic sales goals while driving motivation and performance among their sales teams.”
As for the 2024 Global (Ex-US) Incentive Compensation Benchmarking Study, it studied areas like the Pay Mix, something which included analysis by team, therapy area, and region. Furthermore, it spared a thought for incentive plan design. This included preferred IC plans, data metrics, measurement methods, pay structures, and performance periods.
Beyond that, the study also shed light on IC Pay Outcomes, covering benchmarks on engagement KPIs, top performer differentiation, and budget utilization at 100% national target.
Among other things, it must be mentioned that both the studies in question can be expected to help life sciences organizations evaluate their current plans for identifying gaps and opportunities, as well as design programs that effectively drive growth and profitability. By identifying such trends, gaps, and best practices, these studies will make it possible for organizations to design incentive plans which align with market demands, drive team performance, and foster sustainable growth.
“At Axtria, we’ve helped transform over 100,000 sales reps into super reps, equipping them with smart tools and fresh insights to boost sales effectiveness while managing $1.5B in annual incentive payouts. Together, these efforts empower organizations to stay ahead of the curve and maximize sales performance across the board,” said Sharma.
