Offering Incentives on Retail and Team Based Incentives

1. APC Annual Training March 2019 Offering Incentives on Retail and Team Based Incentives Barbara Sifford, APC

2. TeamIncentives for Retail? • Out of the over 75 accounts that I’ve worked with in the past 7 years, 75 have asked about this? • Should I incentivize my staff on retail? • Should I incentivize them as team? Why do we care about this? Hold that thought.

3. Account Scenarios Medical Aesthetic – Cosmetic Surgery Account • Had incentivized retail in the past. No longer doing so. Retail sales had declined. • FBR discussion let to discussion around physician’s desire to increase retail and incentivize all staff to discuss/sell products to patients. • Staff morale was low due to several factors (relationship with/treatment from owner physician, compensation, concern with practice health/longevity). • Did not want to share cost of goods with staff. Plastic Surgery Practice • Office does not incentivize retail at all, including providers. • New provider / new hire who is paid incentive in current office motivated office to consider adding a retail incentive plan. • Would like to implement a retail incentive plan for providers and for staff.

4. Why (Team) Incentives for Retail? • Motivate staff to engage patients in products provided by the practice, create demand for these products, and generate value for the patient and practice. • Direct employees’ activities or behaviors. • Increase a practice’s ability to achieve its goals. • Improvement in overall staff morale. • Align staff incentives with practice performance. • Motivate employees to improve performance. • Improve staff retention rate. • Improve collaborative performance • Inspire staff to adopt a team approach that can directly impact everyone’s bottom line (provide better patient experience, outcomes, and revenue).

5. Before Implementing a Retail Incentive Plan • What are you trying to achieve with the implementation of your retail incentive program? • If considering team incentive, what are you trying to accomplish with a team retail incentive plan? • Who will be eligible for your program / included in the program? • Full time employees • Part time employees • Support staff • All staff • Certain Departments • Non physician providers

6. Before Implementing a Retail Incentive Plan Are all products included as part of the incentive plan? What are appropriate and reasonable goals? How will retail sales be tracked? • It is important that you have the ability to track sales of the products through your practice management software. • Having historical retail sales data for your practice is critical in developing your goals, as these figures will provide base numbers on which to build a meaningful plan • In addition, it is important to have an understanding of your current market, the competitive nature of your service area, and national sales growth numbers for the product or service. • Be careful not to place too much focus on a certain product/service to the detriment of others.

7. Before Implementing a Retail Incentive Plan • Is anyone currently being compensated for products currently? • May impact incentive pool percentage. • If yes, who? Individuals? Team? Providers? Departments? • If you are incentivizing retail, how are replenish purchases counted? Who gets credit? • Who gets credit for check out purchases (if not recommended by the provider)?

8. Designing the Plan Step 2 • Establish percent of incentive to share with team Step 1 • Establish Guidelines for Pool for Payout Step 3 • Establish Payout Guidelines

9. Step 1: Establish Guidelines for Incentive and/or Incentive Pool Total Retail Sales Growth Only (i.e., Sales Minus Prior Period Sales) Total Retail Sales only if Goal is Achieved • For example: • Goal 45K • Retail Sales 50K • 50K is basis for incentive pool • For example: • Retail Sales 50K • 50K is the basis for incentive pool • For example: • Retail Sales 50 K in quarter • Prior period sales (previous quarter or previous year quarter) 45K • 5K is the basis for incentive pool How will the incentive (pool) be determined?

10. Step 2: Establish Percent of Sales to Share with Employee / Team Total Retail Sales Growth Only Total Retail Sales Goal is Achieved What percent of retail sales will be contributed to the incentive pool? Gross sales? Sales minus COGS? (5% and 20% with most common resting at 10%) Retail Sales Goal: 45K Total Retail Sales: 50K X 10% = Percentage you elect to share with your team $5K for bonus incentive pool Retail Sales $50,000 X 10% = Percentage you elect to share with your team $5,000 for bonus incentive pool • Retail Sales $50,000 • (Basis for incentive plan pool) • Goal $45K • Growth of $5000 • X 10% • (Percentage you elect to share with your team) • $500 for bonus incentive pool

11. Step 3: Establish Payout Guidelines • Frequency and Timing of payout (monthly, quarterly) • For total sales if goal met model, will there be a sliding scale? • If the team overachieves, more funding is available; if the team underachieves, there is less money available. (e.g., at a minimum of 80 percent achievement and top out at 120 percent of achievement). • For growth model, paid out only if goal met? Paid out on any growth? • Paid out equally to all team? Weighted for certain members (i.e., full time, part time, providers, etc.)? • Eligibility for payout (other performance metrics such as job performance, out on leave, etc.)

12. Implementation Account designs their incentive plan The practice provides the plan to staff in writing with examples Practice selects employee for monitoring and implementation of plan The practice presents to staff and allow for questions The practice ensures staff understand their role in achieving the goals • Product Education: The practice educates staff on the products and services included in the plan • May incorporate Allergan sales for product education

13. Summary • The most effective plans are those that benefit the staff and the physician owner. • A successful plan also puts some of the responsibility and accountability on practice personnel. • Keep it simple!!

14. Q&AThank You!