The Best Structure for Sales Incentive Programs
Written by: Walter Ruckes and Mark Hirschfield
(View Author Bio)
Want to learn the best way to structure your sales incentives program? Discover which incentives model is best for your organization.
Overview
The core of this study examines the difference between probabilistic and deterministic program designs as they relate to sales incentives program. It will help you determine the best way to structure a sales incentive program for your organization.What's the best structure for sales incentive programs?
It’s a question clients often ask us. To gain insights on this important topic, we conducted an in-depth study of two different sales incentive program structures. Participants were asked to identify how engaged they would be in a two-month sales incentive that rewarded sales of a new product. Participants were from all different levels of past sales performance, ranging from the fifth to fifty-fifth percentile.
In one scenario, participants rated a stack ranking incentive structure, where the top ten salespeople would be rewarded for selling the most new products in the incentive period. In the second scenario, participants rated a sweepstakes rules structure, where participants would be given a ticket for each sale and ten winners would be drawn at random to receive a reward at the end of the incentive period. In both scenarios, there would be
ten winners, but how the winners are determined is quite different.
Here are the overall engagement levels¡ for the stack ranking and
sweepstakes incentive rules structures:
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