January 13, 2010

Six Tips for Sales Incentive Effectiveness

By Malcolm Fleschner

At its core, sales incentives seem rather simple: offer desired rewards for certain results and watch the salespeople do whatever it takes to make it to the winner’s circle. Unfortunately, as incentives expert and online columnist Sheryl Strasser points out, there’s no shortage of motivational devils in the incentive program details, and what will work dramatically well for one sales organization might fall far short with another.

Looking to provide some guidance in navigating through those devilish details, Strasser offers six key tips for creating an effective sales incentive program.

  1. Mix cash and non-cash
    Much debate exists over whether cash or merchandise is a more powerful motivator. The best incentive solution involves both, however. People will generally be easier to inspire if they have both cash and other forms of recognition driving their performance.
  2. Not everyone wins all the time
    No matter how hard you work to develop a uniquely motivational and targeted incentive program, some salespeople simply won’t be up to the job of making the changes necessary to succeed. Rather than blaming yourself or the program, recognize that some folks, whether owing to personality, professional shortcomings, or external circumstances, simply can’t cut it in sales and need to move on to other opportunities.
  3. Reward both speed and endurance
    You likely have both long and short-term sales goals, so you should have incentives to correspond with both. Cash tends to work well for more immediate tasks because the lure of quick money can provide a strong burst of energy for the short term. By contrast, long-term goals should be addressed with rewards that tap into more intrinsic motivation.
  4. Honor the three Ss
    Your mantra while coming up with the incentive program should be to keep it short, sweet, and simple. Put together an overly complicated program and your people, who are no doubt already plenty busy, will likely give up on trying to figure it out and just go back to work, uninspired.
  5. Use your resources
    Take advantage of any affiliations you have to negotiate mutually beneficial contracts that can juice up your incentive reward offerings without driving up costs. Always be on the lookout for ways to exchange favors.
  6. Don’t stop improving
    Always monitor and evaluate the results of your sales incentive program. Try to find out sooner, rather than later, if one aspect has lost effectiveness. Then look to find the cause and modify, eliminate, or replace it with a better approach.