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Using Incentives to Drive Sales

Apr 22, 2015

Written by: Walter Ruckes
(View Author Bio)

A successful sales incentive program will include three critical elements: goal setting, emotional commitment and focus.

Men drawing chart sales increase BI WORLDWIDE Latin America.


At BI WORLDWIDE, we use the principles of behavioral economics to create the best engagement strategies on the planet. We work with expert academics who advise us on the latest research on human behavior, engagement and decision-making. We use non-cash rewards and recognition to engage and motivate employees and sales teams. Check out our case study library to see how our customized and results-driven solutions have helped clients all over the world.

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
Guidelines for incentive program benefits
The percentages allocated for each component will vary
based on the types of programs being designed. Non-reward
percentages may be significantly higher for programs with very small budgets and/or small audience sizes (ex: pilot programs).
Why non-cash incentive programs?
Sales reps say they want cash, or cash equivalents like gift cards, but we’ve proven they will repeatedly work harder and perform at a higher level for non-cash rewards like merchandise or travel.
Non-cash rewards produce results
Incentive programs that offer non-cash rewards are proven to be more effective than those offering cash or cash equivalent rewards.
Effective Rewards
Justifiability: It’s difficult to indulge with our own money but we’ll gladly accept something high-end as a reward for achieving a goal.
Sociability: When we earn a non-cash reward like a watch or a trip, we’re more likely to talk about it with others than if we were to receive a cash bonus.
Experiential: Motivation is extended and reinforced when the reward is above and beyond fulfilling a basic need.
How do I get started?
• Define program objectives
• Define and segment target audience(s)
• Determine performance drivers
• Gather data and key metrics
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Walter Ruckes

Walter Ruckes

Vice President of Sales and Channel Engagement

As Vice President of BI WORLDWIDE’s Sales & Channel Enagement Group, Walter Ruckes's primary focus is to develop sales and channel engagement strategies and solutions that change the behaviors of sales people, distributors, dealers and channel sales representatives.. An expert in sales incentive strategy, he educates sales professionals around the world on how to best engage their sales force through sales engagement strategies, solutions and best practices.