Determining a Successful Sales Incentive Plan


A sales management team needs to consider what the point of a sales incentive plan actually is prior to constructing one, as many leaders tend to forget why this type of system is implemented in the first place.

The idea behind a sales incentive plan is that representatives may need motivation to increase their productivity and raise the number of outgoing calls that they make each day.

While a number of managers will forget that this is a performance-based plan, it is vital to remember that salespeople should already be trying to get a maximum number of calls and this is an added incentive.

When the sales management team sits down and identifies what they are trying to implement in terms of an incentive plan, they need to realize that it cannot detract from the company’s revenue.

The management team needs to realize that their employees are working for one reason, to make as much money as possible. This is why they entered the world of sales in the first place. You want these people on your team and you should try and foster the creation of this type of environment.

They are motivated by the incentives, and a more effective plan will help to increase their performance. This may seem like the most basic principle, but it is important to understand that number-driven people are going to motivate themselves by trying to get as much money as possible.

A manager could offer all of the money in the world to the staff in the accounting department to go prospect and cold call, but they likely wouldn’t do this. This is because there are only a small number of workers who will take this type of job and many individuals are not wired like salespeople.

This is why the sales management team needs to cater their plan specifically toward the salespeople, as they will likely operate at a higher level and maintain a more consistent production metric. If there is a competitive aspect to what is offered, this will motivate the staff to go above and beyond their quotas. The motivation does not matter, as the end result is all that counts.

You need to make sure the incentive plan is worth it, as representatives who crunch numbers all day will be able to see through something that does not add value to them. This could also be seen as insulting, and this type of misstep is something that a management team should and can avoid if they do the correct math on the front end.

Although a trial and error system could be beneficial here, it is likely that a poor choice for incentives could negatively impact the plan and may derail the entire team for a small period of time. Be fair to your employees and they will be fair to you.

The representatives will respond favorably to a plan that helps them, even if it is granting them a little too much in terms of a monetary reward. Their increased performance should be able to cancel this out anyways.

It does not matter what the incentive is – trips, points, cash, a new TV, awards, recognition – all of these things are great. The key is to make sure you have the right people in place otherwise they won’t be incentivized by anything. The value of the work must equal the value of the incentive.

Though this may all seem like common sense, it is often overlooked. Treat your employees with respect and give them an actual incentive to work harder and smarter.

Image(s): FreeDigitalPhotos.net

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