How to Execute an Incentive Program that Benefits Sales

by | Jan 27, 2015 | Incentive Programs, Sales Incentives

Incentive programs are often promoted as strategies to increase sales. Incentives can sometimes seem like an abstract concept however, because incentives are rooted in behavior modification. But improving sales with incentives doesn’t have to be just an idea. Several studies and hard numbers support the fact that sales incentives boost morale and increase revenue.

An effective, variable reward structure awards greater sales performance. A study by the Incentive Research Foundation (IRF) found that incentive programs can stimulate performance by up to 44 percent. It’s unquestionable that incentive programs are a viable solution to lagging sales.


The study concluded that there are five conditions under which incentive programs are most effective:

  1. The team’s performance is currently lacking.
    Evidence of motivation issues can typically be found in internal sales data. If sales productivity changes from person to person, or profits are down significantly from previous years, it can indicate motivation issues. A sales team may have become too comfortable in their routines. An incentive program can boost performance by creating new enthusiasm for product knowledge, stirring competitiveness, and rewarding extra effort.
  1. The cause of the team’s struggling performance is rooted in a lack of motivation.
    Motivation is tricky. A sales team that is doing poorly in excellent sales conditions is most likely experiencing motivation issues. A sales team may be facing obstacles that seem out of their control, however, such as fast-growing competition or shrinking customer budgets. The latter team may still have motivation issues because hurdles themselves can cause demotivation. An incentive program addresses the motivation issue so that outside factors don’t become even more damaging. Incentives stimulate new energy by offering a competitive playground and new rewards for successes.
  1. The team leader can quantify the performance level desired.The concept of SMART (specific, measureable, achievable, results-focused, and time-bound) goals is applicable to an incentive approach. An incentive program works best in conjunction with a detailed goal. In a case study done by i-Myth, Inc., for example, a computer manufacturer set a goal of increasing sales 15% over the previous year. A sales team with a specific goal to reach will be on the same page. As they pass 5% and 10% increases, they will be all the more invigorated knowing they are approaching their set goal.
  1. The goal is challenging but reachable.
    It’s important to find a happy medium when setting goals within an incentive program. Milestones that are too unrealistic will leave a sales team discouraged and stagnant. Goals that are too easy to reach, however, may result in boredom and disengagement.
  1. Meeting the sales goal does not promote behavior that conflicts with standard practices.
    Salespeople eager to meet incentive goals may sometimes resort to sales tactics that conflict with team principles. They may stray outside the established sales process in order to bring in more revenue. A good way to circumvent undesirable sales tactics is to offer rewards for a variety of productive behaviors, not just selling services and products. Rewarding a sales team for sticking to established protocol can keep them on track.

When these five circumstances apply, a company is in a position to derive maximum benefits from an incentive reward program. Once the organization defines its goals, the next step is deciding what type of incentive program will be most effective.

The best incentive programs address sales goals from multiple angles:

  1. Tracking Performance
    Performance tracking appeals to one of the most basic drives in salespeople: competition. Luke Kreitner, VP of Sales and Account Management at Atlanta-based incentive company Incentive Solutions, says, “All salespeople are inherently competitive and love to see their name in big bright lights at the pinnacle of a leaderboard. Like the old adage says, ‘what gets measured, gets done.’ So, track the performance of each sales rep and rank them against their peers. Have fun with the incentive program. Make it a competition, promote it, reinforce it.“The most successful incentive programs allow quick, easy access so that sales claim input can be instantaneous. A mobile app, for instance, would encourage the sales team to enter information even when working from home or out in the field. The program should also provide the ability to override entered claims to make sure the information stays financially sound.Performance tracking can also offer information about the sales channel that managers might not be able to access otherwise. Details about distributors and end-user consumption can help refine sales tactics.
  2. Valuing Knowledge
    Rewarding a team on their knowledge of products and policies reinforces desired practices beyond just raising sales numbers. Programs like RewardTrax, used by Incentive Solutions, offer modules like Learn and Earn, which allows administrators to deliver rewards for participating in surveys or passing quizzes. This ensures that the team is following important product updates and adhering to established sales processes.
  3. Rewarding Excellence of All Kinds
    Offering employees on-the-spot rewards is an excellent motivator. These rewards could be transferred by a certificate of appreciation, like Incentive Solutions’ Quick Points. Rewards given to team members in person solidifies the connection between manager and employee, letting them know through direct exchange that their hard work is appreciated. These miscellaneous types of awards add incentive beyond just understanding products, following procedure, and ranking high in sales. A good salesperson is capable of going above and beyond in multiple ways, whether by helping a co-worker, volunteering for extra tasks, or by sharing strategies. It’s important for incentive platforms to be flexible, so they can keep up with all types of achievements.

Incentive programs are proven to reap increased sales when implemented with the right circumstances and planning. Many teams can benefit from sales incentives even without meeting the five conditions outlined by the IRF, but those that fit the profile stand to see the most improvement. Lucrative incentive programs also offer more than one way of rewarding a sales team, including recognition for knowledge and any extra-mile efforts not previously defined. The more effort put into establishing a comprehensive and tailored incentive program, the harder it will push sales teams to put forth their absolute best effort.


Steve Damerow Incentive Solutions CEOSteve Damerow

CEO of The Incentive Solutions Group of Companies


<strong>About </strong>Nichole Gunn

About Nichole Gunn

Nichole Gunn is the VP of Marketing at Incentive Solutions, an Atlanta-based incentive company that delivers advanced, agile B2B customer loyalty and channel sales incentives programs.

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