There are many different types of incentives for sales employees. They can be performance-based, non-financial, and recognition-based.
A sales incentive program can help motivate staff to increase productivity, reduce turnover, and drive performance daily. It’s important to understand the 4 types of incentives for sales employees before implementing a program.
1. Performance-based incentives
Providing sales employees with performance-based incentives is an effective way to motivate them to perform at their best and achieve your company’s goals. However, you need to be sure to establish clear guidelines for your program to ensure that it works as intended and that all employees understand how the incentive plan is implemented.
Using an employee feedback platform to collect input from your team can help you determine what types of incentives will be most effective for them. It also provides you with the tools you need to create a transparent workplace that encourages everyone to participate in the conversation and share their thoughts.
When selecting an incentive, you must consider your employees’ unique skill sets and characteristics to find a program that aligns with their strengths. These include their ability to work independently, collaborate with others, and sell specific products or services.
In addition, core performers should be rewarded for their consistent performance over time. This can be done through non-cash rewards, such as additional training opportunities or ongoing projects that challenge their skills and help them grow in their roles.
You can also reward employees for referring potential candidates to your company, which can be an easy and cost-effective way to bring on new sales employees. Moreover, this type of program can boost your bottom line by increasing your sales.
For example, the Aberdeen Group found that companies with an annual incentive fund experienced a 50 percent increase in profits. This can be especially helpful for companies with slow times throughout the year, as it encourages them to push for higher performance and strive for better results.
To ensure that employees don’t receive incentive payouts they don’t deserve, it’s important to establish clear ratings distribution guidelines and calibration sessions. This will force managers to make decisions based on achievable metrics and ensure that non-performers don’t receive a payout, says Sejen.
To further improve the effectiveness of your performance-based incentives, you should conduct an evaluation study to learn whether they are working as expected and how they can be improved. You can do this by collecting input from your employees through pulse surveys and other forms of feedback.
2. Non-financial incentives
If you want to improve your sales employees’ performance, there are several non-financial incentives that can make a huge difference. They can also help you retain your top talent and boost company morale.
These types of incentives don’t come cheap, but they’re a worthwhile investment. They’re more memorable than a cash reward, and they inspire intrinsic motivation in employees. In fact, a study published in the Journal of Consumer Psychology shows that people tend to value tangible non-monetary rewards more than cash incentives.
For example, public recognition of your employees’ accomplishments is a great non-financial incentive. Giving someone a shout-out in front of their peers makes them feel appreciated, increases their self-worth and leaves a lasting impression on them.
Another non-financial incentive is time off, which helps your employees relax and rejuvenate during the day. This allows them to focus on themselves and their hobbies, or even just to take a break from their busy workday.
This can be in the form of a paid day off from the office, or it could be in the form of a vacation that they can use during their yearly leave. Whether you’re granting a full-day off or just a few hours, this type of non-financial incentive is important for employee engagement and retention.
The best non-financial incentives are tailored to each individual’s needs and interests. For example, older employees value feedback from managers and career-development opportunities, while younger workers may appreciate flexible scheduling and retirement planning assistance.
Providing your employees with branded swag like mugs, t-shirts or other items is also a non-financial incentive that can boost their morale and increase their productivity. It’s a great way to let them know that you care about them outside of work, and it’s a great chance to show your appreciation for their hard work.
These kinds of non-financial incentives can be effective even in bad financial times, as long as you offer them consistently and at the right levels. They can improve employee morale and engagement, as well as boost your company’s reputation. In addition, they’re an easy way to attract new talent.
One of the most effective ways to motivate your sales employees is with a well-thought out reward scheme. Using rewards that have the highest impact on boosting sales numbers is a great way to ensure your team members stay engaged.
Depending on your company’s culture and values, there are many different types of rewards to choose from. You might want to offer a combination of monetary and non-monetary incentives. The most important component of any rewards program is the goal, or the criteria for achieving a prize. Adding complex rules or requirements can make your rewards a slog to earn and stifle their appeal.
The most successful incentive programs are the ones that align with your team’s values and goals while providing tangible rewards for their efforts. In short, the best sales incentive program will be the one that your team can truly appreciate and use to help their business grow.
4. Collaborative incentives
While most incentive programs are based on individual performance, some companies have found that they can also incentivize sales employees to collaborate with each other. This can encourage teamwork and reduce friction between sellers. It can also help motivate team members to work harder in order to achieve goals set by management.
Collaborative incentives for sales employees can include rewards such as travel tickets or a company-wide sweepstakes. It can also be a way to encourage leadership roles on the team, such as offering a spot on a new project.
If you want to make your collaborative incentives more effective, be sure to clearly define what the rewards are before the program starts. Then, sellers can give their input on whether or not they think the parameters are fair.
Incentives should be focused on specific objectives and behaviors that will help the team reach their target. For example, if you’re incentivizing your sales reps to close more deals in the first half of the month, it might be helpful to put them on a weekly or monthly quota.
Another great way to motivate your sales employees is to make sure that the sales incentives you’re using are aligned with your company’s values and principles. Most employees have come to your company because of these things, so it’s important that the rewards you offer reflect those core values.
Providing appropriate incentives for customer collaboration is one of the most essential steps in encouraging customers to participate in product development processes. In addition to economic incentives, companies should consider non-financial incentives such as gamification and publicly acknowledging employees who are contributing to the process.
This will help to build a sense of ownership among collaborators and encourage them to share their ideas. This is especially important in remote or highly specialized teams where it can be easy for team members to become informational silos.