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Were you aware that businesses using sales incentive programs report a 79% success rate in reaching their sales goals?
Undoubtedly, having solid ‘sales incentives’ programs is something that attracts many sales professionals and customers.
Given the complexities of today, well-thought sales incentive models are absolutely necessary to motivate your salespeople to sell effectively.
In fact, a company should compensate its salespeople in a way that does not require them to be told what to do. Instead, they should feel motivated to succeed and contribute to the company’s objectives.
In this article, we will examine why sales incentives are important and some popular sales incentive ideas.
Let’s begin by defining what sales incentives are.
Sales incentives are monetary or non-monetary rewards given to salespeople. Typically, sales incentives are given when salespeople sell a certain amount of the company’s products and services.
However, at times, sales incentives are also common when they perform well overall.
Sales is not what it once was. Currently, salespeople deal with a much more informed generation of customers than their predecessors did. In fact, 70% of the sales process is complete before a customer seeks the assistance of a sales representative.
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Nowadays, customers do most of the research on their own. They rely on the sales representative for supplementary information only at a later stage. Sales reps are no longer in control of all aspects of the buying process.
Customers want to interact with sales reps who are trustworthy, understand what they are selling. Moreover, they want salespeople who understand their concerns throughout the sales process.
Additionally, customers sometimes prefer speaking with several company sales representatives before finalizing their purchase decision.
By talking to multiple members of the company, customers are able to develop trust in the product and the company that sells it. For this reason, sales managers should focus on both individual and team-based selling to determine the success ratio.
Each sales representative must be evaluated based on their strengths, weaknesses, and area of expertise.
With the aim of simplifying their sales incentives programs, companies have aligned sales incentives programs with their sales methodologies. This includes their KPIs, targets, and objectives. By doing this, your sales reps will be rewarded equally through sales incentives.
In the digital age, the notion of a “product” has shifted. It’s less of a physical product and is more of a service that requires the ongoing nurturing of the customer. You should adapt your sales incentives accordingly.
In this scenario, beyond the closing of a sale by the sales rep you need additional support. This could be in terms of training and technical support to assist with the front line sales process. As such, this is done through sales incentives programs.
For instance, SaaS companies typically have a customer success team responsible for training and after-sales support. Frontline reps will receive traditional sales incentives for meeting or exceeding quota. However, these sales incentives and compensation should be structured in order to avoid direct competition with the sales force.
Since everyone works together towards closing any deal, managers need to be clear about roles and responsibilities and how credit will be given to each team member. Thus, they also need to decide how much sales incentives would be given to each rep.
For example, in the event that two sales representatives from different geographies work together to close a deal, they should both be credited equally. Consequently, their sales incentives should be split between them.
The modern customer invests more time in choosing and evaluating a product. This means investing even more time in evaluating alternatives before making a decision.
As a consequence, many sales cycles are getting longer. Sometimes they can last up to one year and more. However, this can be changed with the help of pre-sales sales incentives.
In such a situation, companies design sales incentives to keep their sales force motivated. These sales incentives are based on the progress of the customer in the sales funnel.
Today, customers make purchases both in-person and online. Oftentimes, the sales rep is not included in the process, especially during the actual purchase.
However, it is ideal to reward sales reps with sales incentives for their involvement in online sales . They should be given sales incentives to recognize them for doing what digital channels cannot.
When talking about sales incentives ideas for your sales team, you can provide sales incentives in two different ways.
Firstly, your company should determine how they will balance the salary and bonuses given to a certain sales rep. This is a necessary decision as they do not want to end up giving too much in sales incentives.
If they give up too much, they might face financial hardship when giving sales incentives on a larger scale.
Sales incentives can be given in the following two ways:
A typical way of rewarding sales reps is by way of a commission. On top of their salary, a sales rep receives a bonus based on their performance each month, quarter, or year.
Payouts of sales incentives are based on two facts. – that sales reps sell products and services. Sales reps must also be active in all administrative work to avail sales incentives benefits.
Some administrative work to get sales incentives include updating customer information, prospecting, cold-calling, lead qualification, etc.
Additional sales incentives or commissions may be earned by reps based on a specific set of predetermined sales targets. This way, sales incentive prizes can be given more quickly to reps.
Thus, the company avoids demotivating them by making them wait for too long for their sales incentive prizes. Furthermore, commissions should not be capped. As a result, they will work harder and deliver better results every time.
Non-cash sales incentives do not involve cash, but instead promote fun and creativity. Most importantly, they help to reinforce the company’s culture and motivate your sales reps.
In fact, nowadays, non-cash rewards are a large part of almost all companies’ sales incentives programs.
In comparison with sales incentives involving cash cash, non-cash sales incentive prizes are much more dynamic. About 80% of companies globally use non-cash sales incentives to reward their sales teams.
Non-cash sales incentives examples include gift cards for restaurants, bookstores, or any utility service your company offers. Providing travel options for your sales reps and team is also another great sales incentives example.
Although cash sales incentives are fixed, non-cash sales incentive prizes provide a more fun way to bond as a team. Thus, your sales team and their overall performance are positively impacted. The non-cash sales incentive prizes are a fantastic way of rewarding your hardworking sales team and sales representative.
Sales incentives are imperative for a better sales turnover. When a sales rep’s performance is not rewarded, recognized, and appreciated by his employer, he may look for another job. Therefore, having solid sales incentives programs, whether cash or non-cash sales incentives, is extremely important for your company.
Sales incentives programs should honor sales reps for their extraordinary efforts. As a result, they will remain happy with the company and consider it a place that values their work.
Moreover, having sales incentives ensures the sales rep stays on your side in the future and doesn’t leave midway.
When looking for a sales position, a sales rep does not just look at the salary being offered. The sales incentives offered are considered greatly. Thus, you must ensure you have a powerful incentive program with great sales incentives.
Examine the kind of sales incentives program that your competitors offer. Then, you should offer the one that will attract more sales reps to apply for jobs at your company. As a result, you will have an advantage when recruiting sales professionals with better sales incentives.
Until a sales representative is motivated to do his job, he cannot perform at his best. Sales reps may underperform if they feel they will not be rewarded for their hard work. Thus, you need to create attractive sales incentives programs to motivate them to work harder and do their best.
Also Read: How to make your sales team life easier?
Sales incentives programs can motivate your sales team to give their best and enable you to make more sales.
Alongside this, by providing sales incentives you’ll be able to increase loyalty, reduce turnover, and have an edge while hiring. However, you should implement great sales incentives programs based on your company culture and vision.
If you keep this in mind when designing your sales incentives, they’re sure to be effective!
A sales incentives plan refers to a created program that allows you to align specific rewards with sales performance-based goals. For example, increasing your sales, improving response time, etc.
Good sales incentives are those that are effective in inspiring a better performance from your team members. What actually makes up good sales incentives depends on which segment of your sales team you’re trying to motivate.
For top performers, it could be recognition or an exclusive travel trip. For mid-tier performers, it could be gift cards, merchandise paired with the potential to earn higher value rewards.
Commissions are a cash-based income payment. It is received as a percentage of a product/ service sold by an employee in addition to base pay.
However, an incentive is a monetary or sometimes non-monetary reward used to motivate employees towards higher achievement/ goals.
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