While an important arrow in the sales manager’s motivational quiver, sales incentive programs alone cannot drive a sales team to reach and exceed sales goals. Without effective coaching, proper training, and forward-thinking leadership, even salespeople offered the most enticing of incentives and rewards will likely fall short of the goals placed before them.

As the incentives experts at the Westmont, Illinois-based Motivation Network (www.motivationnetwork.com) point out in a recent article, the fact that sales incentives do not exist in a vacuum is underscored by the myriad changes affecting the ways sales managers manage, train, and motivate their teams today.

Managers, they say, are being asked to cultivate stronger relationships with customers, gather more strategic information, and shorten sales cycles, all in an environment ruled by drastic downsizing and slashed training budgets.

In response to these challenges, one of the hot buzzword concepts making the executive rounds is, of course, "alignment." Instead of functioning as separate units, each of the key elements to managerial effectiveness – training, planning, motivation, hiring, etc. – need to operate in unison.

From an incentives standpoint, say the Motivation Network experts, alignment begins with ensuring that the compensation plan rewards salespeople for their efforts that impact profit, not gross sales. Since today’s salespeople can wield substantial influence over price, product mix, and discounts, forward-thinking companies are looking to criteria that reinforce quality customer relationships.

"For example," the article notes, "they track customer satisfaction or number of contacts within an account. They base pay primarily on performance measures, eschewing gross sales and opting for sales contribution dollars, and taking into consideration discounts, allowances, transportation, overhead, and gross profit dollars before advertising."

Team-oriented compensation is another idea gaining traction. Corporate consolidation, team-based selling, and larger, more involved accounts all form a compensation strategy that rewards each team member’s contribution to success.

The article’s authors emphasize that money is not the main motivating force driving salespeople’s behavior. Though it may come as a surprise to some old-school types, independence and recognition regularly rate higher than cash as effective sales incentives.

In terms of specific advice, the authors offer three suggestions for "aligning" sales incentive programs.

1. Hit the "Refresh" button
   Some traditional incentive programs – group trips, merchandise/catalog awards, and President’s Clubs among them – retain their popularity, and with good reason. However, such programs need to change with the times, responding to different business realities on the ground, shifting needs, and desires among the various demographic backgrounds of today’s salespeople, and goalposts that need to move to reflect what can be realistically expected from team members.
2. Share the wealth
   Expand the scope of your sales incentives to reward not only the salespeople’s productivity, but also the contributions from the other channels and folks who participate in the overall sales effort. Additionally, expand the behaviors you’re trying to motivate beyond sales to include more quality-oriented measures like time spent face-to-face with customers.

There’s more to "value" than cost
While group travel is still consistently named salespeople’s most popular incentive reward, followed by individual travel, gift cards, and merchandise, non-financial incentives like plaques and club memberships play a key motivational role as well. Savvy managers understand that salespeople, beyond their material wishes, also want to join an inner circle and to be publicly recognized for their successes by management and their peers. Many of today’s top salespeople are rewarded by becoming critical advisors to senior executives and playing a greater role in corporate decision making.