Feb 23, 2017
Written by: Mark Hirschfeld
(View Author Bio)
Companies invest millions in sales incentives but are they investing wisely? Are there approaches to sales incentives that bring out the best in a sales force? And what role, if any, do other elements such as communications or analytics play in bringing out the best return in a sales incentive program?
To better understand these questions, BI WORLDWIDE conducted a study of 575 sales compensation and sales operations professionals in the United States. We asked them about how they design incentive rules structures, where they were budgeting their money and what challenges they were experiencing. Panelists also reported performance results for the last three years so we could look at the relationship between what they were doing in the past compared to the results they have achieved since then.
The best practices that emerge from this research are:
#1: When it comes to total rewards for sales, companies report a balance of recognition, cash and non-cash rewards. Our panel of experts reported that total rewards for salespeople include base salary, commission and benefits but also include a healthy balance of recognition, cash and non-cash incentives. The next five points share how companies are best using these investments to achieve higher sales, happier customers and a more loyal sales organization.
#2: If you’re only rewarding top performers, you’re not optimizing sales lift. According to our research, the companies who find meaningful ways to reward over 50% of their sales organization in a year experience better sales and higher employee retention than those who don’t. This suggests that along with more traditional stack ranking incentives, such as a year-long President’s Club, companies should provide other incentives that create opportunities for all producers to achieve, regardless of their ranking. Some of these incentive programs could be thirty to ninety day long spurts to focus the sales organization on a key product or time-based opportunity for customers. These incentives can be offered in a way where more than just the top producers earn for making meaningful contributions to the success of
Submitting your information allows us to reach out to you in the future.