If your salespeople are driving a lot as part of their job, offering them gas reimbursement can be an effective and affordable sales incentive. Other incentives include membership in activities that support work-life balance and personal or professional development.
Understanding what motivates your salespeople is the first step to creating a successful program. These non-monetary sales incentives can be a powerful tool for motivating your team.
Identify Your Key Performance Indicators (KPIs)
One of the most important elements to consider when designing your sales incentive program is determining which KPIs you want to focus on. These are the metrics that will indicate whether or not your sales team is meeting its revenue goals and closing deals in a timely manner. Ideally, these KPIs should be quantifiable so that everyone can understand and agree on them. For example, a KPI could be the number of new customers signed, or the average dollar value of each deal closed.
The most important KPIs are those that are aligned with your business priorities and management philosophies. The KPIs you select will vary by organization and depend on your business’s unique goals. Moreover, the KPIs that different people in your organization closely follow will also vary from each other.
Sales incentives can be highly effective in motivating your sales team, but they must be clearly defined. A vague and nebulous set of objectives will only confuse your team members and lead to negative energy and low morale.
Including a mix of cash and non-cash rewards in your sales incentive programs is important. While research suggests that most employees prefer cash-based prizes, non-cash rewards can also be incredibly effective. Some of the most popular choices for non-cash incentives include concert or sporting event tickets, new tech gadgets, and night-out experiences.
Determine the Value of Your Incentives
A well-thought-out sales incentive program can drive desired behaviors and help achieve long-term business objectives. However, a poorly designed incentive can alienate certain employees, breed unhealthy competition, and erode feelings of trust and collaboration within your team. This is why it’s critical to understand your team and what motivates them before creating an incentive program that will drive results.
Depending on your company’s budget, you may need to use a combination of non-monetary and monetary rewards to motivate your salespeople. Cash incentives, for example, are a crowd-pleaser and can be in the form of a bonus check or merchandise, such as concert tickets, golf equipment, or jewelry.
Role-specific incentives are matched to individual roles and responsibilities so that each person can be recognized based on the work they do. For instance, a rep who prospects and identifies leads will need to collaborate with different team members (such as product managers) to complete specific tasks. This can be rewarded with a split incentive based on pre-decided proportions to help eliminate tension and promote fairness.
Non-cash incentives are also a crowd-pleaser, such as gift cards that align with a recipient’s interests or personalized office accessories and mementos. However, many people can be turned off by public recognition and prefer to stay anonymous in their efforts. For this reason, a sales incentive program that includes private rewards, such as recognition awards or an exclusive trip, can be very effective.
Create Attainable Targets
Whether you’re looking to create a new sales incentive program or revamp an existing one, it’s important to create goals that are attainable. It’s also a good idea to choose an easily trackable incentive so reps can stay focused on the targets and see their progress.
Incentives can be monetary or non-monetary, but it’s vital to understand your team to determine what will motivate them. One-on-one conversations with your team members are a great way to get insights into what they fantasize about – such as travel, golf equipment, or jewelry – and then build options into the incentive structure for them to choose from.
For example, consider offering a point-based reward system that allows them to earn credits and redeem online for the items they want most. These types of rewards often offer the most flexibility and scalability, which is helpful for businesses with limited budgets.
Also, be sure to include some non-monetary options that align with your company’s culture or industry, such as fine-dining experiences for foodies or educational opportunities to help them enhance their skills. These types of incentives are usually non-cash, but they can still provide a huge boost to morale and motivation.
Reward Individual and Team Contributions
Sales is a competitive industry, and most people working in this fast-paced role need some motivation to keep going. Sales incentive plans can be used in addition to compensation schemes to create additional opportunities for individuals and teams to win prizes that can make a difference in their performance.
When determining the types of rewards you want to offer, it’s important to consider individual team members and their unique preferences. While cash can be a good motivator, research shows that non-cash items are more effective because they are personalized and memorable. Merchandise, experiences, and travel can be great ways to motivate sales teams. They’re also a great way to build loyalty and retention.
Friendly competition is a great way to encourage achievement, but you have to be careful not to create an environment where some people are always ahead of others. You’ll need to set clear criteria for success and establish key progress touchpoints that allow each individual a fair chance of winning.
You should also consider the timing of the incentive program. It should align with the business needs and not interfere with key milestones such as product launches or other sales-related initiatives. Lastly, you’ll need to be able to measure the effectiveness of the incentive program. Typical metrics for this include participation rate, redemption rates, and sales bumps that can be attributed to the program. This helps you evaluate the program and decide if it should be continued, modified, or replaced.
Monitor Market Trends
Motivating salespeople is a delicate balancing act. Each person is driven by unique needs and values, making it difficult to find a one-size-fits-all approach that works for every team member. According to Dan Tyre, Inbound Fellow at HubSpot, it’s important to identify each salesperson’s preferences when implementing an effective incentive program. For example, some salespeople are turned off by public recognition and get embarrassed instead of proud when their accomplishments are announced in front of peers. To avoid this, consider using a combination of reward types to offer something that speaks to each individual’s motivations.
For instance, you can offer a restaurant gift card for your top performers to treat themselves and their loved ones while providing a tech sales incentive for those who prefer high-tech gadgets such as fitness watches or Kindles. You can also encourage your salespeople to stay on the job by rewarding them with office perks such as ergonomic chairs and adjustable desks.
A well-designed sales incentives program can greatly impact a company’s success. It can inspire salespeople to work harder, improve customer satisfaction and increase revenue. However, it’s vital to keep monitoring the market and adjusting the program to align with current trends. This way, your brand stays relevant, and customers are more likely to remain loyal. Luckily, many companies, including performance improvement experts like One10, can assist in designing and managing a successful sales incentive program for your business.
Regularly Review and Adjust
A well-designed sales incentive program motivates the entire team while also ensuring that each person’s performance is tied to measurable goals. It can include cash bonuses, prizes, or special privileges that complement a company’s compensation plans and commissions. However, these incentives should not be the sole driving force behind salespeople’s efforts.
As technology continues to advance, it’s becoming more common for reps to interact with customers via digital channels. In such cases, reps’ roles are less important in establishing the relationship and closing the sale, but they’re still essential in providing consultative support, listening to client needs, and nurturing relationships. A good way to maintain this balance is through presales incentives, which reward salespeople for reaching key milestones in the selling process before a deal closes.
Monetary incentives are a great motivator, but they should not be used to replace regular commissions or other compensation programs. In addition, it’s a good idea to regularly check the impact of your sales incentives on the company’s bottom line and to make any necessary adjustments.
It’s also important to remember that different people have different motivations, so it’s necessary to use a variety of incentive types to speak to the needs and interests of each salesperson on your team. For example, some may prefer gift cards, while others might be more interested in opportunities to further their professional education. In any event, it’s vital to clearly communicate the details of your sales incentive program with your team so that everyone is on the same page and knows what they need to do to reach their goals.