4 Ways to Improve Your Sales Incentive Program
Companies this year are estimated to have spent more than $800 billion on sales incentive programs to motivate their direct reps and channel partners. Most incentive programs are short-term and transactional in nature – for example, if a rep sells the most of product x, during y time period he or she will receive some sort of reward, whether it’s cash, a gift card, or a trip. While these kinds of incentive programs are important, given their inherently short-term nature, they ultimately have a short-term impact. Once that particular promotion has completed, or the participant has maxed out his or her earnings, the motivation drops.
In order for a sales incentive program to have a long lasting effect and continuously keep sales reps motivated, ongoing incentives must be incorporated. Below are four types of ongoing incentive programs that can help motivate reps for the long haul.
1. Incentives for Improvement
Not everybody can be at the top of the leaderboard every quarter. In fact, some of your most solid, consistent salespeople will hover around the middle. Rather than totally ignoring this group, set a goal for achievement of a certain percentage of sales growth over the previous quarter or year. This long-view approach can also keep all of your reps motivated to achieve results even when there is no short-term program or contest running.
2. Incentives for Better Sales
In many cases a sales rep will do or say anything to get that sale in before the end of the promotion or quarter, despite the best interests of the company or the client. Is this a profitable sale for the company, or will it ultimately cost more than it brings in? Will the customer actually benefit from the product or service, or will this sale result in complaints or negative reviews for your company when the buyer realizes they were pushed in the wrong direction? Instead of blindly rewarding for higher numbers, think about structuring incentives to yield better rewards for quality sales.
3. Incentives for Training or Certification
A well-trained sales team is a more effective one, so offering an incentive for completing training or obtaining certification is a double win. This could include providing a reward for completing an online training program, or making completion a condition of participation in the next “SPIF” (sales performance incentive fund). Not only will this help engage sales reps with the brand, but it will ensure they have better knowledge of the product or service they’re selling and facilitate stronger sales results.
4. Incentives Using Social Engagement and Competition
Salespeople love competition. Creating a gamified social interface with badges, leaderboards, and comment walls will foster friendly competition, banter, and encouragement. This kind of program creates highly engaged sales reps, who will check the site regularly to see where they stand against the competition. The benefit is three-fold: games encourage short-term results, rewarding measurable behaviors reinforces your company values and goals, and your budget goes further when you do not have to pay out for every desirable result.
Effectively incentivizing the sales team can provide lasting, tangible benefits for the company. It’s important to develop a multi-faceted program that goes beyond providing rewards solely for short-term results, but also encourages sales reps to improve over time, make smart decisions, and engage with your company’s brand.