A sales incentive plan keeps your sales employees happy, loyal, engaged and motivated. But not all programs work equally.
That’s why you need to personalize your programs to suit the motivators and goals of your team. For example, you need to consider how best to motivate top performers and laggards alike.
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Individual Quotas are one of the most popular sales incentive plans for sales employees. They reward reps for achieving a specific financial goal within a timeframe, such as a month or quarter. These goals are set by a company’s leadership, and they can be for a specific product line, sales team, or individual rep.
Sales quotas are designed to keep salespeople focused on their job duties, while also motivating them to make better decisions. Ideally, quotas are set with data that shows how well a rep has performed in the past.
Unlike a straight-line commission plan, individual quotas encourage reps to be accountable for their actions. It’s a more empowering way to reward success and boost morale.
However, the downsides of quotas include high-pressure environments and unethical behavior. They can also create resentment and income inequality among sales teams.
When setting quotas, it’s important to consider a rep’s base salary, average number of leads and activities, target incentive pay, total compensation, and any other bonuses available. You should also consider seasonality, territory and market opportunity, and the rep’s ability.
A sales manager can set quotas top-down, based on historic data about what their reps have been capable of generating. Or they can take a bottom-up approach, starting with a revenue goal and defining what activities are needed to achieve that goal.
A quota calculator can help you set the right quota for your sales team. You can enter historical sales data, average monthly visitors/leads, conversion rates, deal sizes, and more to get a quota that’s customized to your business. This quota calculator will even factor in variable costs and fixed expenses to ensure that your sales quota is realistic and achievable.
Incentives are a great way to reward your team for meeting their sales goals. They can also encourage your team members to exceed their quotas and work together to improve their performance and productivity levels.
One of the most popular sales incentive plans for companies is Team Rewards, which can be either monetary or non-cash. Both can provide your employees with a sense of accomplishment and boost their morale.
Another popular sales incentive plan is Activity Rewards, which offer your sales employees the opportunity to enjoy some fun-filled activities outside of the office. These incentives include a weekend getaway, tickets to a sporting event or an escape room, among other options.
When choosing your incentive plan, keep in mind that each person on your team is unique and has different motivations and interests. For example, a tech enthusiast might appreciate an incentive to purchase a new gadget.
To ensure that your sales incentive plan is effective, communicate how you plan to distribute rewards and make sure your team knows what they’re working towards. You also need to set a deadline for your reward so that your sales team has a specific time frame in which they can meet their goal.
If you’re looking to create a stronger team spirit, consider rewarding your sales employees for meeting their goals by offering them personal time off. This can be as simple as offering them extra paid time off to volunteer in their communities, or as complicated as matching their donations to nonprofit organizations.
For many companies, a compelling compensation plan is the key to attracting and retaining high-performing employees. This plan may include salary or hourly pay, commission and bonus opportunities, and other monetary rewards.
However, a number of studies have found that non-monetary incentives are just as effective in motivating employees and building positive relationships with them. In fact, a study by McCartney and Holbeche found that 65% of managers would prefer to reward their team members with non-monetary incentives instead of monetary ones.
Non-monetary incentives are budget-friendly and have proven to be more effective than cash-based rewards because they offer employees’ positive experiences that become memorable. For example, giving a surprise lunch or dinner to employees is a great way to build fondness and recognition for them.
Besides, these incentives can be personalized according to individual preferences. It is a good idea to spend time with employees on a one-on-one basis to get to know them on a personal level and understand their wants and needs.
Experiential gifts are another non-cash option that is popular among sales teams. Sending employees on a team trip to a local attraction or to a nearby restaurant can give them a chance to bond and celebrate their achievements.
Tangible prizes like company swag, such as t-shirts and mugs, are also an excellent way to motivate your team. These items are often given away during onboarding periods and company offsites, but can be used anytime to reinforce your brand identity.
Finally, non-monetary incentives are more likely to retain employees than monetary ones, which makes them a better choice for long-term employee retention and engagement. Moreover, they are also better for attracting new talent to your organization.
Sales compensation plans are a complex beast, and companies often find themselves navigating the complexities in a hurry. They need a plan that is fair to everyone, encourages the right behaviors, and can’t be easily gamed.
One of the most popular sales incentive plans today is Leadership Opportunities, where reps are paid a base salary along with a commission based on their on-target earnings. It’s a good compromise between giving reps a sense of security while still incentivizing them to push harder.
However, it’s important to understand that these plans can have some negative effects, as well. They can lead to a “honeymoon” period where reps make a lot of money but then the company’s revenue slows down, said Mike Dorsey, executive director of the conference board’s Sales Compensation Leaders Council.
The best way to ensure a successful sales compensation plan is to include reps in the design process from the beginning. This will help them understand the nuances of the plan and what it means for their overall performance.
When a rep’s quota is set, it’s up to the sales leader to ensure they have the necessary resources in place to hit their new number. This could mean bringing on additional sales automation tools to boost productivity, or hiring an SDR to increase pipeline.
Leadership Opportunities are a great way to reward employees who have gone above and beyond for the business. Aside from the actual bonus, these rewards can be structured to bring the team together.
Leadership Opportunities are an excellent way to reward and motivate employees to reach new heights, especially when the target is challenging but doable. They’re also a great way to promote team pride and foster strong communication amongst employees.
Incentives for sales employees have evolved from a time when large corporations needed a competitive edge to recruit and retain top sales people. These companies assigned territories, set quotas and began rewarding salespeople with cash bonuses or induction into elite clubs.
Today, sales incentive travel programs are a popular way to reward employees for reaching certain sales goals and expanding their market reach with new customers. Research suggests that these types of programs can boost productivity, increase profit and cash flow and improve employee and customer engagement, loyalty and teamwork.
Salespeople who receive incentive travel trips are likely to be highly motivated because they understand that the trip is a reward for doing their best at work and for achieving goals, according to Incentive Magazine. They also appreciate that the trip is a chance to relax and rejuvenate, allowing them to refocus on their job.
Incentive travel is a proven motivator that has correlated to increased sales, enhanced productivity, improved employee and customer engagement, boosted morale and fewer turnovers. In fact, studies have found that incentive travel programs increase sales productivity by 18% and decrease employee turnover by 10%.
The most important factor in planning an incentive travel program is ensuring that participants are rewarded for the right reasons, as this will have the biggest impact on the success of the trip. Whether you are rewarding the top performers or the entire team, it is important to keep the incentive goals in mind and ensure that they are in alignment with corporate objectives.
A major trend in travel incentive planning is that destination appeal is becoming more of a priority, as it is an appealing way to motivate attendees to perform well at work. Destinations like Italy are a prime example, as they are known for their safety and value for money. In addition, some destinations are becoming more environmentally friendly, as resorts and hotels use reusable water bottles or recycle food waste.