Rethink sales incentives

Recognise the best, engage the rest

Sales incentive programs are usually aimed at the middle 60%-70% of the population. Some might say “why do I need to incentivise them, it’s what I pay them for.” If there is no gap between your objectives and the performance of the sales force you may well not need an incentive. However, if there is a gap, a well-designed sales incentive program is likely the best way to close it. And there is a reason for that.

Recognising the contribution of top performers is critical, and should be treated as an investment in retention of not only top performers but also middle. If you don’t recognise them, your competitors will. An incentive program that calls for the top 10% of sales reps to qualify for a travel award may engage 30% or so of the population. The remaining 70% feel they have no real chance to earn the award. A sales incentive program is often designed to drive increased unit sales, accomplishment of individual objectives or delivery of incremental volume. In any event, a well-designed sales incentive program will engage all participants because, unlike with a top performer program, the sales rep needs only compete with him/herself, not with the entire group. The ability to be reinforced for individual increment is what differentiates the incentive from recognition. And because top performers are just that, the increment they can generate is often limited.

Just the opposite is true for the middle 70%. Design the program with these sales reps in mind and the sales incentive will often generate more than enough incremental profitability to fund both the recognition and incentive programs.

Why it works

Studies show the most effective way to drive additional sales is to engage those in the middle of your performance curve.

  • Most top-tier performers are already operating at or near capacity
  • To gain additional sales, you need to engage the middle of your performance curve
  • Identify shared behaviours among your top sales reps
  • Inspire those desired behaviours among middle performers
  • Use the right mix of culturally-relevant rewards, incentives and recognition

LET'S TALK.

or you may email me at hayk.hakobyan@gmail.com

2020 © Hayk Hakobyan

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