What’s New in Sales Incentives?

September 21, 2011

So what’s new in sales incentives?  Well, actually quite a bit according to the Premium Incentive Products Magazine.  Over the past few years, many companies have become reluctant to implement lush incentive programs.  Of course, the economy reflected some of the major changes, but other factors are causing some new developments as well.

For example, many members of Gen X and Gen Y are flooding our workforces.  Because of their passion to help others, they are requesting to include socially responsible items within their incentive rewards mix.  According to a current poll by Incentive Research Foundation (IFR), more than 70% of respondents request socially responsible related awards.

Some points-based sales incentive programs also allow participants to redeem points for charitable donations.  Many Gen X or Gen Y redeemers tend to use their points for items that benefit someone or something.  Such an example is Helping Hands (link) rewards – these special gifts are manufactured by a variety of social enterprises whose sole mission is helping disadvantaged men and women learn new skills, become self-sufficient, and improve their lives.

Other trends on the horizon are using smart phones specifically to redeem rewards. This new application will enable the user to find something in a retail store, scan the barcode, and display the amount of points needed for that particular item.  This gives the participant a chance to “see” the item and, with enough points, can just click ‘buy now’ and their order is complete!

The biggest and most effective trend in sales incentives is linking an incentive with changes in behavior.  The best sales incentives programs incorporate a behavior change – many salespeople know what they need to do (sell more!), but don’t know how to get there.  For example, targeting some of your top prospects is a key behavior in the sales cycle.  This trend can have a positive effect on your entire sales force, not just your top performers! 

More and more incentive programs are also going global.  This only makes sense – if those global branches are important to the organization’s financial standing, why not motivate them to perform better as well.

What’s new with your organization’s sales incentives? I would love to hear your new ideas and trends!

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Recognize Success in the Sales Cycle

July 1, 2011

Society in general admires the sales results and not necessarily “what it takes to get there.” Many sales compensation folks frown at the idea of sales incentives rewarding on sales behavior vs. the result. It is proven that targeting the sales process behaviors can produce higher margins and shorten your sales cycle.  Your compensation team might be singing a new tune!

No matter what your company is trying to sell, a pair of jeans or the core technology for nuclear technology, the sales process does not vary – targeting, planning, messaging, collaborating, and negotiating.  The length and depth of each step may vary by industry, but the sales cycle steps do not. To make a sale, a sales force is “highly encouraged” by management to complete each step, but are they doing each step “right”?

To create a sales incentive program focused on behaviors, it is important to identify types of behavior that are measurable and ultimately lead to sales success.  Possible measurable behaviors are:

  • Complete a specified number of account plans
  • Create a list of companies you would like to target
  • Identify the economic buyer / influencer within target account
  • Complete a certain number of sales calls
  • Attend customer feedback meetings

In 2010, less than half of all salespeople hit or exceeded their sales quotas.  You might find this data alarming! Implementing a behavior-based sales incentive and recognition program can increase this percentage and lead to greater closing rates and higher margins.  

For example, a large telecommunications organization was suffering from a deficient sales funnel. The objective of the program was to increase the accounts in the sales funnel and ultimately increase sales.  Each participant was rewarded for targeting ten accounts with a mix of products/solutions and closing sales to those targeted accounts.  The program resulted in a 500% ROI!

Sales incentive programs almost always are viewed as having worked well if they create impressive and permanent improvement in sales volume that endures well after the programs have ended. Rewarding your sales staff on sales behaviors will produce those lasting effects! Is your organization including behavior-based sales incentives in their total rewards package?

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Posted by Recognize Right

Effective Motivating and Rewarding to Accelerate Success

May 18, 2011

These days everyone is looking for the perfect solution to ramp-up sales. The compensation package, including sales incentives, is an important key to your salespeople’s success. 

A well-designed incentive program that is implemented effectively helps an organization attract and retain the best salespeople.  It also energizes and motivates salespeople to engage in activities and behaviors that will drive high levels of desired results.  An effective incentive plan can also be a considerable source of enthusiasm and inspiration! 

There are so many reasons why is makes sense to incorporate sales incentives into a salesperson’s total compensation package:

  1. Salespeople Drive the Company’s Top Line – A highly motivated salesperson will create more sales than a less motivated one. 
  2. The Output of Salespeople is Measurable – It’s easy to track, report, and reward salespeople’s metrics. 
  3. Acknowledges a Salesperson’s Success – The rewards generated from an incentive program serves as a constant reminder of their success.

Rewarding your sales staff on “activities” is an effective way to encourage and develop specific desired sales behaviors. According to a marketing research firm, it is crucial to establish a link between rewards and performance – which will provide a clear and fair relationship between expectations, achievements, rewards, and your corporate strategy.

Expectations:
Your employees must be aware of the expectations within their job. Your rewards program could be off to a bad start if the expectations are not clear.

Sales Goals:
For goals and achievements to have the greatest motivational impact, they must be measurable and visible.  The earning rules for the sales incentive program must be clearly designed and communicated.

Rewards:
Other than using a points-based system, maximize effectiveness with possible rewards such opportunities for growth and a work/life balance. 

Corporate Strategy:
Make sure you are including your organizational strategy within the rules of the program.  For example, if your company is redefining its sales process to better meet the needs of the multi-national customers, your sales incentive should reflect this initiative.

When trying to increase sales, retention, and engagement, an effectively planned and executed sales incentive can help you achieve your goals.  Is your organization including sales incentives in their total rewards package?

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Posted by wendlynm

What is the “Right” number of Sales Incentives?

April 11, 2011

Throughout the sales incentive and performance improvement industry, no compelling data exists regarding implementing the “right” number of incentives in any industry.  It appears that companies often don’t know how many incentives are running at any given time since the use of incentives is not always centrally administered, nor do multiple-location organizations account for programs in a way that a representative from the company can gather accurate data.

Having too many sales incentives can be equivalent to not running any at all.  The purpose of an “add on” incentive is to create focus on a particular new product, solution or skill.  If you have three or more programs running simultaneously, no one can remember how to play, when you can play, or the key metrics. 

According to research completed by The International Society for Performance Improvement, when tangible incentives are carefully selected, implemented, and monitored, they increase work performance an average of 22%.  This study identifies the criteria for successful incentive design. The key is to outline the steps needed for success, then reward along the way for good and excellent execution of the desired steps.

Many companies get “addicted” to sales contests; a study from The Complete Guide to Sales Force Incentive Compensation.  A large computer manufacturer’s sales force was known for running many sales contests – executives within the organization referred to this as “incentive plan obesity” or the tendency to overload the incentive plan by “throwing money at every problem.”  An ex-director in compensation at this organization confessed, “Our organization gave bonuses and awards for every imaginable action by the sales force.  The more complex it got, the more difficult it was to administer, and the results were not convincing.”

If an incentive is poorly designed or poorly communicated, even one incentive is TOO many. Remember, incentives are about doing something NOW. They are “in the moment and they call people to action”.  If you continue to add incentives on top of other incentives, it is hard for sales people to stay focused on what it is important.  How many sales incentives in your organization running and are they working for you?

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Posted by Recognize Right

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