Nothing boosts your sales team’s excitement and energy more swiftly than an incentive. Sales incentive plan development needs a lot of thought and attention to detail to be successful. An appealing sales incentive structure can be differentiated between a highly-productive sales team and a disengaged workforce.
A targeted sales incentive plan assists organizations in producing precise results and allows you to pay people accountable for accomplishments. Before designing the strategy, the sales team’s objectives should be clear and concise.
The primary objective of a sales incentive plan is to incentivize your sales team to accomplish defined objectives. Sales incentives can comprise personal Sales Performance Incentive Funds (SPIFs) or non-financial rewards.
Organizations using a sales incentive program are more successful in reaching their goals. The only catch is developing the right sales incentive plan that inspires each sales team member effectively. Here are some tips for creating a highly successful sales incentive plan.
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Overview of Sales Incentives
Sales incentives are rewards that companies offer their reps when they achieve specific goals. It is a structured system that aligns specific actions to particular rewards. The primary objective of any company that provides an incentive to its sales team is to optimize its performance.
Sales incentives are mainly about discovering the best way to augment rep engagement. Innovative and flexible incentives can boost your sales force’s engagement. Here are the purposes of sales incentive programs you should be aware of.
- Builds loyalty
- Motivation and employee engagement
- Develops a hiring edge
- Triggers positive response
- Promotes healthy competition
Strategies to develop a Successful Sales Incentive Plan
Multiple factors can influence the development of a successful sales incentive structure. Here are specific tips you should consider while developing a successful sales incentive plan.
Align the Design of Sales Incentive Plan with your Company’s Goals
The development of a sales incentive plan relies significantly on your organization’s objectives. A good sales incentive structure should align with your company’s goals. By connecting it to your company’s goals, you can provide salespeople with role-based targets.
While designing a sales incentive plan, you should have a comprehensive understanding of the organization’s goals. The best way to understand the company’s goals is by leveraging relevant performance indicators.
The objectives of the sales incentive plan should be clear and quantifiable. It should encourage salespeople to target users through proper segmentation. Regularly check that your incentives are driving the appropriate behaviour in your sales team.
Know your Salespeople and the Factors that motivate them
The way you incentivize your sales team is directly proportional to your overall success. But what motivates your sales team can vary significantly based on several parameters. Here are certain factors that should be present in a sales incentive plan.
- Clearly illustrate the roles of each employee in the sales team
- Customize pay methodology and metrics based on those roles
- Reward desired performances with individualized incentives
- Offer real-time visibility to your salespeople for enhanced and consistent feedback
It is essential to consider the different motivations in your team. For instance, money isn’t the only factor that motivates modern sales teams. You can consider training incentives to encourage your workers properly.
Properly Structuring Sales Incentive Programs
As the complexities of today’s selling environment continue to grow, companies must carefully consider how they can motivate their salespeople.
To deploy an effective sales incentive structure, you should structure it on various objectives. Here are some structures of sales incentive programs you should know.
Nowadays, B2B sales are more complicated, with higher price points and intricate processes. Your sales team comprises sales reps, operations managers, account executives, etc. Therefore, it is essential to incentivize each individual based on their roles.
Based on your company’s services, you can deploy your sales team in various locations. Note that each territory offers a varied level of opportunity. Moreover, each market has different challenges that your sales team should negotiate. Therefore, crafting an incentive program that includes these parameters is crucial.
Incentives Based on Products/Services
The rapid advancement of technology has allowed organizations to offer many products and services to serve their customers holistically. However, not every product is the same. Selling each product or service that a company offers requires unique skill sets and technical expertise. Hence, it is common for corporations to offer unique incentive plans based on the products/services.
Optimize the Effectiveness of Incentives by selecting the Right Metrics
With the proper sales performance metrics, you can make an effective sales incentive plan. Companies nowadays deploy sales performance management platforms to recognize which metrics apply to their organization. Here are some aspects to consider when developing the proper sales incentive structure.
- Be aware of your bottom line
- Utilize four or five sales performance metrics
- Bring everyone to the decision table
- Rely on visibility and control to design sales incentives
Offer Equal Earning Opportunities
The sales incentive plan is more effective when it offers fair and equal earning chances to all salespeople. You should develop the sales incentive plan by carefully considering the localized challenges. Furthermore, there shouldn’t be any bias that may motivate specific members of your sales team.
When you look at the right things when developing a successful sales incentive plan, you can reward the right people. With a targeted and customized sales incentive plan, your salespeople are more likely to achieve the performance you want. Motivating your salespeople via incentives is an organic and ongoing process. The tips stated above will assist you in creating the perfect sales incentive plan.