As was the case with so many industries, the COVID-19 pandemic sent insurance companies reeling. A Deloitte industry study reported that 48% of insurance executives said the pandemic showed how unprepared our business was to face the economic crisis, vs. only 25% who agreed they had a clear action plan to remain operationally and financially resilient. As we regain normalcy, insurance carriers should be seeking out ways to steadily improve market share so that they thrive during the pandemic recovery, and protect themselves against other, future challenges.
Sales incentive programs can help insurance carriers gain market share and remain proactively competitive—even during economic downturns. Use these guidelines to build a sales incentive plan that keeps your business resilient.
Use non-cash sales incentives.
Using non-cash rewards makes your incentive program more effective and sustainable. Multiple behavioral and psychological studies have concluded that “tangible non-cash rewards deliver equal or greater returns to organizations in most circumstances than equivalent cash rewards.”
Why is this? It’s hard to say for sure, but behaviorists suggests these things are at play:
Cash is negatively correlated with salary.
People tend to mentally lump cash rewards in with their regular, recurring salary. This does two things: it removes the association of the reward to the corresponding action, and dulls the excitement and novelty of the reward over time. In order to maintain the same levels of excitement and engagement, you have to offer increasingly larger reward amounts.
Non-cash rewards are fun and guilt-free.
Based on a particular study by Hal Richard Arkes and Victoria Shaffer, participants showed a preference for non-cash rewards when they were non-utilitarian, but not when they were utilitarian. This suggests that non-cash rewards have a “fun factor” that makes them more appealing than cash. A fun, non-cash reward removes any conflict a recipient might feel over not spending cash rewards on necessities like gas, groceries, bills, rent, etc.
Non-cash rewards have social signaling power and trophy value.
Non-cash rewards are highly visible, tangible, and make for great conversation! Every time someone comments on the TV, golf clubs, or air fryer a participant earned with rewards, they revisit the positive experience of earning rewards. This “halo effect” makes non-cash reward more effective than cash.
By operating a sales incentive program based on tangible rewards, rather than cash, you make your sales incentive spending more sustainable and effective. This is a long-term advantage that will help you improve market share and sales performance over time.
Segment salespeople to motivate them more effectively.
With the ability to separate your sales incentive participants up into different groups, you can create different goals, initiatives, billing buckets, and payouts according to their group. Here are some examples of group specifications:
- By performance level: Most sales forces follow the 20/60/20 principle: 20% are top performers, 60% are average, and 20% are lower-tier. By offering “big ticket” reward opportunities to top-level performers, and lower-value, more easily won rewards to the average majority, you can give everyone a motivation boost in a cost-effective way.
- By location: Some salespeople are lower performers by nature or habit, others are stuck with difficult regions or policies—tasked with selling flood insurance in the southwest, for example. You can assign different goals and pay-outs to salespeople by region to compensate for these differences and challenges.
- By policy or product: Perhaps you want to pay-out higher value rewards for sales of high-value policies or coverage extensions. You can ensure that your salespeople receive reward points that are proportionate to their sales efforts.
- By demographic: Your sales force aren’t identical. They’re at different life stages, with different values, interests, and hobbies. By separating your salespeople by demographic, you can focus incentive program marketing messages to highlight the types of rewards that will appeal to them most.
Segmenting your sales incentive program audience allows you to give salespeople a more personalized and relevant reward experience. This helps maximize the results of your incentive program, which gives you a competitive advantage and help to improve market share.
Reward salespeople for training and building connections with policy buyers.
Most people need to receive information information repeatedly before they fully digest and retain it. Insurance salespeople are no different—and they have a lot of product, buy, and regulation information to keep up with. Adding a training incentives module to your sales incentive program encourages onling training by rewarding sales agents for completing courses, passing quizzes, or correctly answering trivia questions. This enables sales reps to have more confidence and informed interactions with buyers, which leads to strong, trust-based relationships.
You can also distribute on-the-spot reward points to sales agents for good customer relationships practices. Reward salespeople for helping customers switch to policies that are safer or more relevant for them, for example. Reward them their extra efforts in scheduling calls, meetings, and check-ins. This sends a clear message about the behaviors that you value as a company, and helps strengthen both employee and customer loyalty.
What does a more knowledgeable, capable, and motivate sales force result in? You guessed it: it helps improve market share.
By using non-cash rewards, segmenting your reward-earners, and rewarding salespeople for behaviors that lead to business growth, you can establish a sales incentive program that reaches ROI quickly and incrementally grows revenue over time. Having this asset in your pocket helps you improve market share with a strong competitive advantage and protect yourself against unexpected challenges.