Using Incentives to Drive Sales

A successful sales incentive program will include three critical elements: goal setting, emotional commitment and focus. These elements will serve as the foundation for both short-term and long-term programs that will ultimately help you engage your sales reps to achieve your business objectives. Explore our guide to learn best practices to follow when designing your next incentive program.

 What we believe about incentives

1. Solutions must be grounded in behavioral economics
2. Leaders are key to a successful program
3. Incentive programs should be funded from incremental gain
4. Global programs must be local
5. Local client service matters
6. Engagement & ROI should be measured
7. Experience makes a difference

 Why incentives? What do they do?

Compensation plans create a bell curve of performance among sales reps… incentives move the middle. Unlike compensation, which isn’t changed throughout the year, incentives are flexible and can (and should) be changed quarterly, monthly, weekly or even daily to meet objectives and drive focus on specific business objectives.

Where do incentives fit?

Incentives should be treated as a separate component of your overall strategy to engage and retain your sales reps.

What are incentives intended to do?

Incentive programs provide sales reps at all levels the opportunity to stretch and increase their performance throughout the year, as well as:

1. Narrow the gap between current performance and quota
2. Sustain high performance
3. “Move the middle” in the performance bell curve
4. Drive activities, short-term impact and on-demand behavior change

How much should I spend on incentives?

• 1-5% of total sales revenue
• 5-10% of incremental sales revenue
• 12-24% of incremental profit
• 2-5% of the average participant’s income (multiplied by the fraction of the year that the program period represents)
• 15-25% of cost savings in a cost-reduction program