Client story

Client story: Data analytics vs Client perspective

A few months ago, I was working on an Incentive Compensation (IC) design. The previous plan was entirely based on new patients with confirmed shipments. The client requested a change to allocate 50% of the plan to new patients with confirmed shipments (NPS) and 50% to new patients with orders (NPO).

Initially, I thought this would lead to duplicate payouts since NPS is a subset of NPO and now same Patient would be paid twice on NPS & NPO. 

However, the client made a compelling point: "I understand there is duplication, but previously, 100% of the target pay was allocated to NPS. Now, 50% is allocated to NPS and the remaining 50% to NPO. Therefore, even if the payout occurs twice for the same patient, once in NPS and once in NPO, the target pay is now halved on each component."

This made perfect sense. If an NPS was previously paid $200 per unit, it would now be paid $100 as NPS and another $100 as NPO. 

Often, we get so immersed in data that we overlook simple concepts. 

Note, there would be additional payouts for some NPOs that don't convert to NPS, but this was intentional as the client wanted to pay reps for NPOs that don't convert to NPS (since the reps have made efforts to secure the NPO, but it didn't convert into NPS due to factors beyond their control)

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