Keeping your team motivated is an uphill task. You want the team members to be productive, but at the same time, you don't want them to burn out. Incentives are a great way to reward your sales staff when they are doing well or motivate them when they aren't.
When sales performances are not up to the mark, incentives can rejuvenate the team and get their numbers back on track.
This blog post will look at four methods to make sales incentives effective and drive top performance from your sales team.
What is Incentive Compensation, and why is it important?
Incentive compensation rewards a team or individuals for meeting a specific goal, such as hitting sales targets or achieving new productivity levels. It can motivate employees to improve performance.
How can incentives be used to drive optimal performance?
1. Make Sales Awards a Team Effort
It's important for everyone on your team — from the frontline salesperson to corporate sales leadership — to understand why they should remain motivated and engaged in their work. Organizations can do it through sales incentives such as awards, bonuses, or other recognition programs highlighting individuals' contributions toward achieving goals or exceeding expectations.
Also, a sale is usually the result of the effort put in by different professionals — from data analysis, administration, and logistics to payroll departments. Recognizing and rewarding the professionals who made the sale possible pushes them to work harder toward sales enablement.
2. Align incentives with organization goals
For a company and its sales team to progress, both must pull in the same direction. Ensuring that the incentives align with the company, vertical, sales department, and individual goals helps the company take the right step.
3. Flexible incentives depending on factors
Flexible incentives ensure every member of the team is taken care of. The incentives should be based on performance and consider the individual employee's needs and the needs of others on your team.
Some employees might like the challenge of a quota system, while others would prefer a percentage cut of a sale. Factors like seasonality, past performances, experience, business potential, etc., must be considered to ensure fair compensation. Remember, one size never fits all.
4. Leverage MBO programs
An MBO program establishes clearly defined goals between management and employees to enhance organizational performance.
It is a management tool for aligning employee goals with organizational objectives. It motivates employees, rewards them for their efforts, measures their progress, and provides feedback on how they can improve. MBO programs are typically implemented through rewards, such as bonuses or raises, but can also include other incentives like recognition programs or performance appraisal systems.
MBO programs help build stronger relationships between management and the team by providing opportunities for both parties to communicate about goals and plans for achieving them in a way that isn't adversarial.
Motivating to boost sales performance and succeed
Incentives drive motivation and performance. They help create a competitive environment that fosters productivity and innovation. They can foster a positive workplace culture where employees feel like they're being heard by the management and valued for their contributions.
A recent study by Sanjog Misra and Harikesh Nair examines the impact of capping salespeople’s pay. They looked at the compensation plan of a large U.S. contact-lens manufacturer. This company stopped paying commissions once salespeople’s performance reached a quota ceiling. In response, the salespeople always held sales under the ceiling. By eliminating it and making other changes to the compensation plan, the company kept its salespeople motivated and increased revenue by about 9%.
Working towards ambitious goals and big dreams can be challenging. So, choosing a well-designed incentive program is the key to keeping everyone on track and focused on what matters most: success!
Your sales team is constantly striving to meet the numbers, and when you have the right incentive, you will get one productive, happy team.
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