Sales Incentives FAQ
Commission is an income payment, usually as a percentage of a product or service sold. An incentive is a reward designed to motivate someone to reach a goal.
Commission is strictly tied to sales performance, whereas an incentive can be used for various applications such as exceptional service, training completion, upselling, submitting sales data, customer loyalty, etc. Incentives also have the benefit of social value, and tend to inspire stronger emotions than cold, hard cash does.
Creating a sales incentive plan can typically be broken down into the following steps:
- Ask yourself: “What do I want my sales incentives program to achieve?” For example, your goal might be to increase gross sales across your entire organization or sell more of a specific product line.
- Decide what key performance indicators (KPIs) or leading indicators you should incentivize to push your sales team to reach their goal. If the goal is to increase sales, you could benefit from incentives that encourage more outbound calling or better performances on product knowledge quizzes.
- Scale your rewards to match the effort of your sales reps. This can be as simple as rewarding your top performers with more points to spend on big items in a catalog, like a spot at an incentive travel event. Nothing makes your best salespeople feel loved like a trip to Bora Bora.
- Create a plan of action to market your sales incentive program to your sales team. Sales reps are busy. An incentive program might not seem like their top priority. Using gamification techniques or bonus points can get sales reps to participate in your incentive program.
- Provide intuitive, interactive participant portals where your sales reps can quickly see the latest promotions, track their progress towards their goals, and redeem for rewards.
- Enhance engagement through friendly competition by implementing leaderboards.
- Make sure to deliver exceptional reward experiences, so that your sales reps feel like their extra effort was worth the headache.
Like most people, salespeople like recognition for their hard work. A sales incentive plan is a structured program that offers rewards for sales performance goals, such as increasing sales, or improving response times. Incentives are to align sales teams’ goals with organization’s goals, while increasing overall sales and improving customer satisfaction.
Can a CMO smell spam? Sales incentives can make a big impact on the bottom line. Below are a few case studies:
- Using a sale incentive program, a major casualty insurance distribution company [swap link for new URL for Insurance Company Channel Incentive Program Case Study] increased new insurance policy sales by 19%.
- Using a contractor sales incentive program, a Fortune 500 HVAC manufacturer [swap link for new URL for Electric Cooling Sales Channel Partner Incentive Program] was able to motivate their channel partners to promote a specific product for a 307% ROI.
These findings echo the results of a survey from the Incentive Research Foundation, which found that companies with high customer satisfaction and loyalty, above average customer acquisition rates, and significant year-over-year growth are statistically more likely to use non-cash reward and recognition programs for sales performance. That’s a good sign that a sales incentive program just might be worth planning for.