On Building Better Incentivized Bonus Plans
On Building Better Incentivized Bonus Plans
Revenue based bonus plans are cringy. We've built a three-sided bonus plan I'm exited about.
Today we roll out the first official bonus plan at PushPress. I’ve never personally be positive nor negative on bonus plans, but after spending much time and thought crafting this plan, I’m very bullish on this.
This bonus plan isn’t like most I’ve been exposed to in the past, so I wanted to explain why it’s shaped the way it is, and why that means so much to everyone involved with PushPress - especially our clients.
The “Normal” Bonus Plan
Normally bonus plans are tied directly to revenue or some function of revenue. I HATE THESE.
Why? Because it’s only looking after one player in the game - the company. It creates a culture where revenue is the ultimate and only target, and builds teams of people who only aspire to grow revenue at all costs, full stop.
Revenue Based Bonus Plans Are Two Sided
If you’ve been paying attention ot my posts, you’ll notice I often come back to the shape of a triangle. I am beginning to believe there’s some universal laws that center around three.
Revenue based bonus plans only include two players:
Team Members
Company
It’s missing the third, and most important piece of the business economy: The CUSTOMER.
The Three-Sided PushPress Bonus Plan
If you read this blog - you know I’m a huge believer in three-sided things. I believe success only happens when three players win, not two.. and especially not one.
Unfortunately our society often breaks down to zero-summed games or games with two winners - very infrequently three.
Surprise! We’ve spent long and hard thinking about the best potential bonus plan and it ended up centered around three things.
Customer Happiness / Satisfaction
Our North Star Metric: Average Check-Ins Per Gym Member Per Month
Revenue
If you read this previous post, you will see why we’ve formed our company North Star Metric around the success of our clients. We believe the success of our clients always leads to the success of PushPress.
The majority of our bonus is awarded by hitting metrics that are centered around our customer. NPS and North Star Metric attainment.
This is critical to keep our complete company alignment laser focused on our client success and happiness.
The theory is, if we are hard at work focusing on client success and client happiness, our revenue will inherently grow. If our team can ensure happy clients and successful clients, the company will happily use that revenue growth and distribute it to the team that made it happy.
Another perfect three-sided game at work. I’ll report back and let you all know how it played out.