If you've experienced an adverse outcome from sales incentive compensation, you might think it doesn't work as well as it should. This isn't true, however — if it didn't get the job done, it simply wasn't done properly. Sales incentives can be a powerful driving force behind a successful team, but sometimes the execution of those incentives isn't the best.
If you're looking to motivate your salesforce to reach new heights with sales incentive compensation, you'll need to make the right choices. Read on to learn about the most notable reasons sales incentives work, and how you can replicate this success for your business.
The Sales Incentive Compensation Should Fit the Team
Your salesforce and the people that make it up should determine your plan for incentives — not the other way around. One size doesn't fit all, and there can be a variety of factors that motivate employees. Those on your team fill different roles, and their rewards should reflect their specific goals. The better you understand what drives your people, the better you can motivate them. Your incentives will more effectively mesh with what they're hoping to achieve.
The quotas you set for the salesforce should reflect their situations. They should be achievable. Otherwise, there's no real chance to succeed. Not reaching goals can be demoralizing, and instead of motivating, it accomplishes the opposite. The team's various territories should also be a consideration. Different areas have different potential, and that should factor into the quotas and rewards for individual salespeople. They should receive incentives based on their performance, not on the quality of their territories. Adjust quotas to reflect changes in various areas, in the interest of fairness.
If salespeople know you're aware of their challenges, it helps keep them motivated. For a sales incentive compensation plan that gets the most out of your salesforce, you should be sure to:
● Clarify and define the roles of team members
● Using the roles, customize goals to fit the specific tasks of groups
● Design rewards to harmonize with what people work towards achieving
● Give ongoing feedback on progress, accomplishments and potential improvements
When Successfully Done, Sales Incentive Compensation Is a Growing, Constantly Changing Entity
A new product would never go into stores without extensive testing. That testing allows manufacturers to fix problems before they can become bigger issues later. This same concept applies to sales incentive programs (or at least the ones that end up being successful). Designing these programs with flexibility in mind is critical for success. If certain aspects aren’t working, don’t just leave them the way they are, but don’t scrap the whole thing either. Adjusting as you go can help you keep what works while also fixing what doesn’t.
Each person might prefer a different incentive. As such, some rewards might not be the motivating factor you thought they'd be. Figure out what might be more effective and make the necessary adjustments, but be sure to do this independently. Keep your program's development outside of your salesforce's actual work environment. Use information taken directly from work in progress, but do it in a way that doesn't get in the way of the same production you're analyzing.
Sales Incentives Inspire Healthy Pressure and Cooperation
A well-designed sales incentive compensation program gets everyone on the same page. Individual goals are important, but it shouldn't stop there. If the entire salesforce also works toward rewards the whole team can achieve together, it creates a good kind of pressure. Weaker performers feel more responsible for the team's performance and will work harder. Additionally, top salespeople will feel motivated to assist their weaker counterparts. This kind of shared responsibility keeps anyone from feeling singled out. Your incentive compensation program should motivate and inspire, and if properly executed, you reduce the risk of bringing down morale.
Designing effective sales incentive compensation can be difficult at first, especially if you feel like you are in a rut. However, as you adapt and work with your team, you might find positive results with more regularity. The reasons for success discussed here can help guide your program's direction. Still, you might need more assistance for the outcome you desire, and that’s where you can reach out for some professional guidance to get the job done.
For more information on getting the most out of your sales incentive compensation program, contact our team at Incentive Solutions. You can give us a call at (866) 567-7432 for help with putting together a program that keeps your team loyal and working to the best of their abilities. We are here to help you find innovative ways to inspire your team and keep morale high.