The slowly improving job market and rising property values are encouraging signs for the economy. Consumer confidence is beginning to return as conditions improve. Several recent studies showed that market expectations were the highest they had been since the start of the recession in 2008.
The Conference Board recently released its consumer confidence index for October, showing a reading of 72.2, up from 70.3 in September. Similarly, Experian Marketing Services' Consumer Expectation Index reached 92.7 for the first half of 2012. Both reports showed their highest readings since 2008.
"The long-awaited cyclical recovery in consumer sentiment is gathering momentum, which will likely continue along with what appears to be a quicker pace of labor-market improvement," Joseph Brusuelas, a senior economist at Bloomberg LP in New York, told Bloomberg.
Consumers may be more willing to open their wallets as confidence rises. Companies looking to take advantage of the increased confidence could benefit from incentive compensation management. Aligning sales teams and compensation packages to pursue a more aggressive approach to nurturing potential clients could pay off for businesses.
Not all compensation programs will be equally effective at producing results. Firms that place too much emphasis on any one product could see that items sales spike at the expense of other merchandise. Employees will spend their time pitching the merchandise that generates the largest return for their commission. Finding the right balance for incentive programs can make a big difference in the overall success of the company.
A management technique that is becoming more popular among companies is gamification. Employees are evaluated based on a series of metrics designed to test their efficiency at completing sales, nurturing client relationships and more. As salesmen improve in various aspects of their job, they generate more revenue and the company can see exactly what factors are contributing to their success. This makes it easier to generate sales coaching tips and improve the performance of the entire team. Gearing compensation and incentives around one of the metrics could improve the efficiency of the sales force.
Companies are already moving to take advantage of the increased consumer confidence. Holiday marketing efforts started earlier this year as firms attempt to generate more potential leads. Having the right compensation structure in place could help motivate employees to improve their completion rates just as consumers are looking to spend more.