Revenue solves a lot of problems. When done correctly, sales incentives bring revenue.
If I had to sum up sales incentives in 3 words it would be this…“Inspiration trumps compensation”
Look we all think we are motivated by money, especially salespeople. While we believe this to be true, research shows cash and cash equivalents are not necessarily the biggest drivers of productivity and performance.
Which is why we recommend sales incentives should be treated as a separate component (outside of the commission plan) of your overall strategy to engage and retain your sales reps.
In other words, if you want to motivate people into action, you must first inspire them.
And when we say motivate people into action, we’re talking about narrowing the gap between current performance and quota, sustaining high levels of performance, and unlocking discretionary effort.
Common Approaches to Sales Incentives
When we’re talking to sales & marketing leaders, we usually see 1 of 3 approaches.
"We Don't Need Sales Incentives"
One scenario we often see is organizations who say they don’t need sales incentives. They say we already have comp/commission plan. Our people can make good money if they meet their goals. Plus, it’s their job to make quota...
Listen you must have a solid compensation plan. If you don’t, it will be very difficult to attract & keep A-players. But a comp plan is not enough to drive sustained performance. If it was enough, the majority of sales reps would all be maxing out their plans. And that’s simply not the case. What happens is the sales comp plan almost always leads to a bell curve of performance. So, you wind up having 10-15 percent of sellers as low performers, 10-15 percent as high as performers, and then a huge percentage of your group being middle performers.
The Top Performers Trip
Which brings us to the second type of approach – many organizations offer a president’s club top performers trip. We applaud this as it’s vital to recognize and retain your very best. However, if that’s the only sales incentive you have, we’d argue you are doing it wrong.
You’re doing it wrong because you are only inspiring a small portion of your team. You are missing out on inspiring the middle portion of your salesforce which represents the opportunity for greatest incremental revenue lift. And if I’m a middle performer, this type of incentive demotivates me because I immediately know it I’m not going to win but the same dang people who win every year will. I’m immediately checked out. That’s the last thing you want.
Best In Class Sales incentives
Which leads us to the third approach which we would call best in class. These are the sales organizations that keep the top and move the middle up, or in other words, retain their best and engage the rest. They do offer a top performers program to recognize their A-players. But they also have an entire incentives calendar with multiple programs aimed at inspiring increased performance throughout the entire sales organization throughout the entire year. They use a technology platform to promote & measure weekly, monthly, quarterly & annual spurts, contests and incentives.
These organizations segment their audiences, incorporate goal setting, communicate effectively, offer exciting reward choices, tap into both intrinsic & extrinsic motivators and create an atmosphere of friendly competition. They keep their A players and they level up their B & C players. They increase revenues which as we said in the beginning solves a lot of problems!
Sales Incentives are Key to Improving Performance
Sales incentives can push your team to excel, while increasing revenue, reducing turnover, and increasing employee loyalty. Consistently recognizing your team members can ensure top performers feel valued, while providing more opportunities for B & C players to grow and succeed.
At C.A. Short Company, our Next Gen Sales Incentives tap into key behavioral motivations, in order to promote relationships and drive results. Our program offers distinguished awards, while providing managers with a well-rounded compensation plan. Our sales incentives program can be used for incentive and recognition awards, expert management and travel planning, concierge white glove travel, and meetings and events. To learn more about how our sales incentives program can be catered to your business needs, sign up for a free demo!