Case Study: a global chemical distributor achieves aligned sales incentives and lower compensation costs with Alexander Group

Global Chemical Distributor cuts compensation cost of sales from 5% to 4.4% with Alexander Group

The Alexander Group was engaged by a global chemical distributor facing a challenge with its sales compensation program. Due to misaligned performance metrics and inconsistent territory sizes, the company was experiencing runaway incentive payouts that exceeded budgets, especially when market conditions normalized and it failed to hit margin targets. Talent retention was also a key concern.

The Alexander Group implemented a redesigned sales compensation plan that balanced rewards for both volume growth and margin contribution. Their solution rationalized territory sizes and adjusted commission rates to limit excessive payouts for over-performance. This aligned incentives with desired business outcomes and resulted in significant cost savings, reducing the company's compensation cost of sales from 5% to 4.4%.

Global Chemical Distributor