What Factors Make A Sales Incentive Plan Successful?

Sales Incentive Plan SuccessThe idea behind a sales incentive plan is that the representatives need motivation to increase the number of outgoing calls that they make. While this idea may seem obvious, it is often overlooked.

A sales management team has to sit down and identify a plan that will appropriately compensate and motivate representatives without bankrupting the company.

According to Heather Kivett, president of Resolution Systems, Inc., a sales training and consulting firm, the management team has to realize that representatives are in the business to make money. They are motivated by the incentives, and a more effective plan will help to increase their performance.

“It’s basic, but most people don’t think of this,” said the executive. “You can promise heaven and earth, but if they don’t want heaven or earth it’s not a good incentive plan.”

Kivett noted that a manager could offer all of the money in the world to the staff in the accounting office to go prospect and cold call, but they likely wouldn’t do this. These individuals aren’t wired like salespeople.

This is why there needs to be a specific plan that is centered around the salespeople. Managers need to cater to these individuals, as they will probably operate at a higher level if there is a competitive aspect to what is offered.

“You also have to make sure the incentive plan is worth it – is the value of the work being produced by your sales reps equal to the incentive that you are offering,” said the executive.

This type of designation can be honed through a brief trial and error period, but it may serve the sales management team to sit down and examine what would be fair to all sides. If this type of plan can be created, representatives will push themselves to achieve a higher level of success, according to Kivett.

“It does not matter what the incentive is – trips, points, cash, a new TV, awards, recognition – all of these things are great,” noted the executive. “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.”

The greatest sales incentive plans will fail if they are not clearly defined and poorly presented to the sales team. There has to be a specific goal and outlined rewards for every level of cold calling, prospecting and receiving business. Any type of uncertainty can work against the managers and may hurt the morale of the employees, according to Kivett.

A sales management team has to set clear expectations for their representatives in order to avoid problems concerning bonuses and payment.

“You can also give the sales reps options – let them tell you how they’d like to be incentivized to perform,” Kivett said. “Poll your audience – ask them what they want.”

Employee feedback will help to eliminate a sales incentive plan that is unpopular, and will help to save time and resources. Instead of guessing what representatives want, managers need to be hands on and up front about what they feel are the specific goals and take criticism after presenting them.

“Instead of spending $50,000 on an awards/recognition event, your salespeople may work harder if you just split that money up among them without an event,” Kivett said.

If they are accountable for the incentive plan, and their input is taken, the level of disagreement will drop by a significant amount.