Are You Screwing Up Your Sales Incentive Program?

Have you ever heard of the 80/20 rule? It says that 80% of your sales come from 20% of your salespeople, or that 80% of your revenue comes from 20% of your clients. There are always top performers, who require very little added motivation to perform, who comprise that elite top 20%. Then you have your bottom 20% who won’t get motivated no matter what you do. So forget about them. Lastly, you have the middle 60%. These are your average performers who are typically what you want to target with a sales incentive programs. We call them the “Sweet 60.”

These are the people who are motivated by a sales incentive or recognition program, and who our programs are most useful on. But when your sales incentive program isn’t utilized correctly, it can be ineffective and/or harmful to your organization and your “Sweet 60” will stay right where they are – in the middle of the road. So if you want to get that 60% on the road to success, avoid the following tactics when planning your sales incentive program. They are proven to fail.[ezcol_1half]

• Do not reward the wrong behaviors – Managers often begin an incentive program to increase sales. Unfortunately, that often leads to rewarding the team for closing a deal. Never reward for just selling – that’s the job. Reward the individuals that reaching your goal and for surpassing it.
• Do not encourage discounted pricing – Salespeople are infamously gutting the price in order to close the sale. As a rule of thumb, landing these accounts should result in a reward; however, there is always a gray area, for the BIG accounts. Your bottom line must grow in order to qualify for the incentive.
• Do not cap performance – Capping sales volume is crazy. So is capping the reward capability if someone “sales too much.” Is there such a thing? In most cases, if you remove the reward, you lose the extra drive and motivation, ultimately selling yourself short.
• Do not create an imbalance between risk and reward – When there is no challenge to your sales incentive program and you reward your team for doing the bare minimal, the whole thing becomes imbalanced thereby ineffective. Well-planned incentive programs make the participant put in substantial effort to earn their rewards. On the flip side, goals should not be set too high. Finding the balance is key to the success of your incentive program.
• Do not reward non-actions –Your incentive program needs to reward productivity based behaviors. Reward those who surpass your goals, not those who just show up to work.

If you want to optimize the effects your sales incentive program has on your bottom line, avoid the five tactics listed. Doing so will help you ensure that you get the most movement out of the sweet 60%.