09/25/2024 | Press release | Distributed by Public on 09/25/2024 08:52
Showing up to work is one thing; bringing genuine enthusiasm to the job is another. So, how can you motivate your team to meet and exceed their goals?
Sales incentives can be a valuable tool to get your team fired up, but they're not one size fits all. Figuring out the best sales incentives structure to motivate your reps can make a big difference in some cases - helping them come to work energized and eager to get results.
Below, we'll cover different types of sales incentives to consider, how they can motivate your team, and best practices for implementing an effective sales incentive program that drives results.
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Sales incentives are rewards sales reps receive on top of their base compensation for exceptional performance. This typically means meeting or exceeding sales targets. Sales incentives most commonly come in the form of monetary rewards such as performance-based bonuses, but they can include any type of reward designed to motivate salespeople toward a specific result.
There are five common types of sales incentives. Here's a quick rundown:
Sales incentives help you reinforce the behaviors you want employees to prioritize. They set you up for mutual success: Your company achieves higher sales and profits, while your reps get an extra treat (most often money, but not always).
I've found that many people who are drawn to sales are intrinsically motivated to hit high sales numbers because they're competitive and like to win. Adding sales incentives to the mix gives them an additional reason to give it their all. For sales reps who aren't as driven by competition, incentives give them something tangible to work toward. Some people love the game, but everybody likes the prospect of extra money or rewards.
Plus, incentive compensation can improve employee satisfaction. Getting a valuable reward because you earned it feels good. It's a constructive way to show your team you value their hard work. Employee turnover is expensive. Sales incentives are a vital tool to help you keep your top performers and avoid the cost and labor of recruiting and onboarding.
Money is the most obvious type of sales compensation to consider. And in my opinion, it's the best type of incentive to motivate salespeople. It's clear, straightforward, and universally popular.
But you can also shake up your incentive program by adding more creative ideas to the mix. Here are some to consider:
Using sales contests as an incentive can be a powerful way to leverage the competitive spirit. That could mean posting a leaderboard that's updated regularly to show who's closing the most deals. That may be enough to motivate some of your reps. But you can sweeten the deal by offering the winner a prize - monetary or otherwise - at the end of the month or quarter.
Public recognition for big achievements can make a huge difference for some. You can provide bragging rights for reps with titles like "salesperson of the month," or hosting an annual ceremony where high achievers are recognized and given awards. You could also set up a "President's Club," so employees have a prestigious honor to work toward that comes with special benefits, like an annual trip.
Stock options are a type of monetary compensation that give employees more reason to be invested in the company's success. They're a good cash alternative if you want to reward employees in a way that encourages them to care about the long-term success of the business.
Employees who work hard deserve time for rest and leisure. Offering additional paid vacation time in exchange for meeting performance targets can be a strong motivator.
Selling isn't a solitary activity, and many successful sales are the result of a team effort. Rewarding your team with a group activity such as a retreat, a nice dinner out, or an escape room experience can double as a reward and a way to encourage further bonding outside the office.
Vacation packages are a game show standard for a reason - it's an exciting prize to get. For big wins, offering reps a free trip to a coveted location, or travel vouchers that let them choose their destination, can be an attractive offer for many.
Whether it's season tickets to their favorite team's games or a hard-to-snag ticket to a concert or play, helping your top sales reps enjoy a cultural activity that matters to them can be a good way to boost their motivation.
Like cash, gift cards give sales reps a way to choose how they spend their reward. Something like a Visa or Mastercard gift card can be used almost anywhere, while gift cards from widely used retailers can be put toward a need or an indulgent purchase they might not buy for themselves otherwise.
If you're going to provide a specific item as a sales incentive, you should choose something that's high value and universally useful. In today's world, it's hard to go wrong with a tech item like a new tablet, laptop, or smartwatch. You can buy a specific item to offer employees or give them a choice of gadgets (which could be valuable for those loyal to specific tech brands).
Offering top performers a chance to enjoy a nice dinner or event with the company's executives can be a powerful motivator. It gives them a chance to connect with the company's top stakeholders, receive positive recognition, and provide direct feedback to those with the most power to implement change.
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To get the best results from a sales incentive program, the right design and implementation approach is important. Some of the best advice I can offer is:
At organizations I've worked with, I've seen a common tendency to make incentive plans complicated - to add more rules and different ways for reps to make money. That can backfire. If it's hard for a salesperson to understand how the sales incentives work, it will be hard for them to know what to prioritize.
Seek to craft a straightforward incentive program that people can easily grasp. Write out your commission plan on paper. How many steps does it have? How many caveats are there? Minimize unnecessary complications around reward structures.
A good rule of thumb is to consider whether someone could work out their commission rate with just a calculator. If not, it's probably too complicated.
Those with the best insights into what will effectively motivate your sales team are the people on it. Actively solicit their input when developing or updating your incentive program. Understanding what they would go the extra mile for can make a huge difference when it comes to results. So, ask your team what types of rewards matter most to them and what incentive structures feel motivating.
For example, some people thrive on competition, but it's not for everyone. Switch up your incentive structure periodically to appeal to different preferences. Don't always force your team into competition with one another for bonuses. Encourage a collaborative approach - like split sales incentives or team activity rewards - for those who enjoy teamwork.
I recommend setting up a feedback roundtable to hear reps' ideas and suggestions. You can make it clear that you may not be able to use every recommendation they offer, but knowing what matters to them will help you develop a program they'll respond to.
Tracking earnings and making sure team members receive the sales compensation they're owed can get complicated. But the right technology can make incentive compensation management much easier and give employees the peace of mind that they're getting the incentives they've earned.
Well-designed sales incentive software can make many aspects of running a sales incentive program much easier. Some features that make a difference include:
My preferred incentives tool is Salesforce Spiff. For salespeople, it can work as a go-to source for reviewing how the reward structure works, the target achievements to aim for, and the commission rates associated with each one. For admins and sales teams alike, it's easy to use and helps you track the number of performance targets achieved and payouts completed.
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Your sales reps must understand the incentive plan for it to have an impact. Communicate how it works clearly, and figure out how best to distribute the plan details to your team so they all see it and know where to go to review it as needed. If you have a central knowledge base the whole team uses, such as a CRM, that's a good place to put it.
While I recommend keeping your plan simple, if you end up developing a more complex program, it's especially important to make the details of the plan easy to find. Your reps will want to refer to it to remember which goals to focus on. Their ability to understand how the incentives work is crucial for getting the results you want.
The last thing you want is for salespeople to question whether they're receiving the commissions they've earned. I once heard from a sales rep who was convinced they'd never been paid the correct bonus amount. If any of your reps feel that way - even if it's not accurate - they're unlikely to remain motivated by the incentives being promised. Worse, they're more likely to defect for the first job opportunity to come along.
The best way to avoid that is to keep the plan transparent. Make it easy for salespeople to track the specific performance targets they've achieved and commissions they've earned. And strive to keep all the data in your sales tool clean and accurate, so the sales team knows they can rely on that information.
While beneficial motivators, sales incentives come at a cost - an important factor to consider when planning your sales budget. Establish the key performance indicators (KPIs) you want to track for your sales incentive program to ensure you successfully align incentives with your main business goals.
Some metrics that can help you measure the success of your program include:
The most important takeaway I can impress upon anyone designing a sales incentive program is this: Give your team the information they need to make the decisions you want. And when in doubt, keep it simple. The easier your program is to understand, the more likely salespeople are to get how it works and act accordingly. With the right plan and the right tools to implement it effectively, you can grow your sales and improve job satisfaction for your sales team at the same time.
Is outdated commissions management hurting your growth? See how to quickly create automated incentive plans that motivate your reps.
Anne Mason is the manager of the incentive compensation program for 1,500 legal staff at Morgan & Morgan. She drives innovation and scalability for the performance-based bonus program, as well as building stakeholder relationships across the organization. Anne was awarded the 2021 Top Adaptor... Read More from Spiff and is a regular top contributor to the Salesblazer online community. She is also the owner of Novak & Mason Cellars, a small-lot winery focusing on California's heritage grape varietals.
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