Sales incentive plans can be powerful motivational tools, ones that have an immediate impact on your bottom line. Of course, they aren’t always successful — to ensure your plan helps you achieve your goals, you need to construct it properly. It can’t lead to loss of revenue, and it needs to drive your salesforce toward higher productivity levels. The people on your team must feel like they’re part of something. Incentives that remind them of this can go a long way toward helping them make more money for you and, by extension, for themselves.
Do the Sales Incentive Plans Add Value in the Eyes of the Salesforce?
Your employees are smart — if they weren’t, you wouldn’t have hired them in the first place! They understand how to close a deal, as well as whether a deal is worth making, and this also applies to the incentives you offer them. At the very heart of an incentives plan, you’re trying to motivate your people with rewards based on their performance. This, in turn, will increase their productivity as they strive to earn more.
While this is a straightforward concept, you need to remember that your sales team already has the motivation to make as much money as they can. That’s why they went into sales, after all. That’s also why it is crucial that you make sure your incentive plan is worth the effort from their perspective.
Your team spends enough time crunching numbers and evaluating to know when something good comes along. If you try to urge more production out of them with incentives that don’t add value, they will see through it in a heartbeat. Beyond failing to create the motivational impact you desire, they could see a plan like this as an insult.
While trial and error is always a plausible way to figure out the best strategy, it’s important to make sure the numbers work out from the beginning. A poor choice of incentives could have the opposite of the intended effect. This can be a risk; if the team’s productivity (or sense of loyalty) wavers you could end up suffering losses instead of seeing gains. The best way to avoid this is to be fair to your sales team.
Be fair to them, and they’ll be fair to you. Don’t be afraid to introduce a plan that gives them more than seems ideal, either. Keep in mind that the favorable response you’d get in return could cancel out any real monetary losses on the front end. Whether the incentives are cash bonuses, points, recognition or other rewards, the key is to ensure that their value matches that of the work done to get those incentives.
Are the Sales Incentive Plans Fair and Transparent?
Sales incentive plans aren’t only about individual performances. They are also about how the company does as a whole. This comes as no surprise, especially given that when a business is doing poorly, bonuses aren’t readily handed out. While this makes a great deal of sense, in many cases the employees are unaware of how the company as a whole is doing. Bonuses can be an unknown commodity—seen as a blessing when it comes and as a slight when it doesn’t.
To avoid making your sales team feel cheated out of rewards they might believe they deserve, transparency is key. You can use this visibility to emphasize the connection between their performance and that of the company. Without this, the motivational effect of your sales incentive plans will never be at the level you desire.
Company-wide visibility keeps your employees from feeling left in the dark, or as if they have no control over the bonus incentives they receive. Something as simple as a weekly spreadsheet depicting company profits and earned bonuses can achieve this. Your team can see where they fit into the puzzle, and they can also get a chance to look at projections for the rest of the year. You can share results, both good and bad, and everyone can see exactly where they currently stand. The transparency of knowing what they’ve earned, as well as what it would take to earn more, gives sales incentive plans much more motivational power than they would have without it.
If your sales incentive plans are fair, generous and transparent, you’re setting the stage for success across the board. The positive impact will grow as your people learn to recognize the connection between their performance and the potential rewards. Over time, your salesforce will reach new levels of productivity. With a successful plan, this can overshadow the costs you might face when first starting the program.
To learn more about how you can maximize the positive impact of sales incentive plans, get in touch with our team at Incentive Solutions. Feel free to visit us online or give us a call at (866) 567-7432 today.