With continuous erratic VUCA (volatility, uncertainty, complexity and ambiguity) dynamics in the fast-changing human-demand world, you must design and deliver your sales incentive plan to rein in the neurobiology of your sales force and inspire them to climb up the fund-raising milestones on the way to achieving strategic objectives of the company. What’s an incentive plan but an instance of using design-driven inspirations of your people to achieve the company’s strategic objectives through the directed behaviour of the sales-force in the marketplace? Here is how you have to ‘sell’ your sales incentive plan to sell it to your people so that their behaviour flows the way you want them to achieve the sales milestones using the following.
1. Understand What Motivates Your Team
To create an incentive plan that keeps your team working hard, you have to know what motivates them. Salespeople are motivated by commissions or bonuses, recognition, career advancement, and a sense of achievement. Whether you send out a survey, meet with associates, or talk to people in the lunchroom, you’ll find out what’s most motivating for your team.
Example:A global insurance company found that, when its sales staff were asked about which attribute they values most in their jobs, travel and special experiences were in their top two (yes, sales people are human beings too!). So the company created a tiers system for incentives that granted exotic trips and other special experiences as prizes for top performers. Sales dramatically increased. So too did the level of employee engagement and satisfaction.
2. Align Incentives with Desired Sales Behaviors
Your incentive plan must be fit for purpose in motivating the specific behaviour and results you wanted from your sales force – whether that’s closing large contracts, picking up new customers or cross-selling more.
Example, a pharmaceutical company that wants to boost its market penetration for a new product line might structure its incentive pay to involve more combinations of product numbers, such as offering a bigger bonus for selling the new products. It could also increase strategic fit by informing its sales force that only each year’s top performers will receive the highest allowance. The result might be for sales reps to concentrate their efforts on those products.
3. Keep the Plan Transparent and Attainable
Above all, transparency and reachability are required: it should be clear how effort translates to reward, and the targets should be seen by sales reps as achievable. Complex or (as perceived) unattainable targets will undermine the motivation of a team, and damage the power of the plan.
For instance, providing clear, preferably linear, preferably tiered, totally graspable targets with corresponding rewards can help to demystify incentive plans in a SaaS business and motivate sales reps. You can see your ups in your targets, climbing to ups in your rewards that can literally – not metaphorically – boost your bottom line and lift the rest of the company up with you.
4. Provide Immediate and Tangible Rewards
Immediate, direct, related and fair rewards make a much bigger contribution to sales team success then the more remote incentives we traditionally think of when discussing commissions.
Example: At a single automotive dealership, spot bonuses – or ‘spot bonuses’, as the dealership called them – a deal-by-deal, instant-gratification bonus on a specific vehicle were the solution. By instantaneously spotlighting and rewarding sales reps who sold a designated high-margin vehicle, the spot-bonus system incentivised reps to focus their selling efforts on the designated vehicles – and, in turn, earn money for the dealership.
5. Incorporate Non-Monetary Incentives
They can be useful auxiliary compensation for employees. In fact, a study by the American Society for Training and Development showed that monetary incentives accounted for a measly 6.3 per cent of the motivation and 21.9 per cent of the satisfaction participants felt with their job. Other powerful motivators included recognition for work, challenging assignments and learning opportunities, and providing personally meaningful rewards.
Example: An internal awards programme with the sales rep on the cover of a staff newsletter, and with ringing endorsements at a staff meeting, can provide the carrot that bolsters pride for your best performers. Add to that notions of professional development programmes and mentor opportunities, and the carrot is icing on the cake for inspired performance and building camaraderie.
6. Communicate Effectively and Regularly
Make some noise about this if you can – a crystal-clear, ringing hallelujah will underscore the message that your sales gladiators are on message and on board. Update communications frequently with status reports, Q&As and all documentation clearly at hand.
Example: Quarterly in-person meetings were scheduled to review the incentive plan and individual and team performance. The company published a 100-page guide for the plan, both in paper and digital formats, and had a portal available for the sales reps to stay abreast of their own targets and rewards in real-time or daily.
7. Solicit Feedback and Be Willing to Adapt
Get feedback and think about that feedback from your sales team, and then be ready to iterate your incentive plan.
Example: One of these, a major e-commerce firm, regularly solicited employee feedback through anonymous surveys and regular contact with reps to ask whether the incentive plan jibed with their motivations. It took both employee feedback and the competitive landscape seriously enough to vary the incentive plan – the targets as well as the rewards – frequently enough that this complicated form of extrinsic motivation did not grow stale.
In summary, it is vital to understand what motivates your salespeople, design sales incentives that reflect these motivators and consequently promote the right behaviours, and communicate your incentive plan properly and clearly. If you follow these tips, your plan is going to be one of the powerful tools to catalyse, energise and finally maximise your salespeople’s performance. Keep your plan flexible and keep adjusting and improving it as you receive feedback to ensure your incentive plan is utilising its power to the maximum for sales performance management.
