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3. Calculating the Budget
Use the Acid Test (see chart below) to determine how much money you have to spend.
For sales incentive programs:
- Determine what sales will be "without the program"
- Determine what sales will be "with the program" and reduce your expectation by 15% (to match the national average of 85% success rate)
- Take incremental sales and calculate the profit (most companies are willing to spend between 30 and 40% of incremental profits on the incentive program).
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Source: Society of Incentive & Travel Executives (SITE)
New York, N.Y., (212) 575-0910; www.site-intl.org
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