The Long And Short Of It

Which type of sales incentive do you prefer to run with your sales team: long-term programs offering big-ticket rewards that allow top performers to really shine, or short-term programs with lower-priced rewards that keep the whole team focused on what they need to do to be successful?

In fact, there’s no need to choose. So says Bill Plautz, president of UInspire (www.uinspire.com). According to Plautz, sales organizations maximize their motivational impact by running short- and long-term incentives congruently.

“When you put sales incentives together it’s best to think about short-term goals in the context of what the long-term objectives are,” he says. “And conversely, when you’re trying to plan from a long-term perspective, you have to think about what the corresponding short-term goals are going to be. So if you have an annual sales target for reps to hit – a long-term goal – it makes sense that sales reps who hit all their short-term goals also will hit their annual goal. That’s congruency.”

Plautz notes that many sales reps, when confronted only with a 12-month plan, can be intimidated by the daunting numbers. The short-term goals, he adds, provide a road map or stepping stones that help salespeople understand what’s expected of them and offer a perspective on just what is achievable.

The theory holds true whether your typical sales cycle is two weeks or two years. For sales organizations involved in long-term sales, there is only one difference – managers should create short-term incentives based on specific activities rather than closed sales.

“If you have an 18-month cycle, there are things you can reward employees for along the way to keep them fired up,” Plautz says. “It might be setting up a key meeting with a decision-maker at a target company, or proving the return on investment (ROI) to show a potential client that what you have to offer is going to save him or her money. It could even be something as seemingly minor as making sure the rep contacts someone in the customers’ organizations at least once a week to stay fresh in their minds.”

The key, Plautz says, is to understand your own sales process well enough that you can put incentives behind the key milestones that you know lead to closed sales. Then all you need to do is pick the right rewards – a topic, he adds, that warrants another article all its own.