9 years ago
January 6, 2015

Using Incentives to Encourage Sales People

Implementing the right incentives for encouraging sales people is important for business results.

Rhys Metler

Selecting the right incentives to encourage sales people can be a balancing act between the sales manager’s desire to motivate and the accounting department’s desire to keep costs low, yet the project of implementing the right incentives for encouragement and results is important to all businesses. For a business finding its footing in the marketplace it may take several attempts to find the right mix of compensation and incentives to encourage sales people, while for a business already established in the marketplace new incentives may be needed to keep sales people at the top of their game. Most businesses ultimately find that a mix of different incentive models provides the best results.

Using Competition to Encourage Sales People

You already know that your top performers thrive on competition, so why not provide an environment that stimulates that drive as an incentive? Encouragement through competition is one of the simplest ways to create motivation, and does not have to be recognized through cash compensation. If your compensation plan is performing as it should, instituting a competition for recognition only can be just as effective as a competition for merchandise; in most cases, the merchandise is secondary to producers over the recognition that comes from winning.

Is Commission Only the Right Choice to Encourage Sales People?

Commission only compensation has benefits and disadvantages when you are looking to encourage sales people. From a sales person’s point of view, most of the disadvantages of a commission only plan may appear to fall upon the sales person; this can create problems for an organization looking to incentivize key behaviors. Accordingly, sales compensation for sales people is more commonly based on a mix of commission, salary, and bonuses. However, this depends on the business model. Businesses with short sales cycles, for example, often find success with commission only plans, whereas commission only might not be the right plan for sales compensation if an offering has a long sales cycle of three months or more and top performers dedicate significant time to developing new business.

Leveraging Career Paths to Encourage Sales People

The sales people who are most likely to respond to any incentive plan are the sales people who have committed to making their career in sales. Providing a clear route to career advancement is therefore an effective method to encourage sales people. When supplemented by support at the necessary levels, offering such a career map is a constant incentive as opposed to a limited time enticement and has the added benefit of increasing the satisfaction of your sales people while improving their ability to sell. Consider the ways that you might make career paths for your best performers more visible:

  • Supply career maps that outline potential advancements in title along with KPI’s typical for earning each advancement
  • Maintain sales and leadership training and coaching in-house
  • Arrange for internal or external sales executives to discuss their personal career paths with the sales team
  • Reward exceptional performance with escalations in responsibility that reflect career growth

Making Targets Clear to Encourage Sales People

If your sales team is not contributing the sales that you want to see, you and your peer managers have probably already discussed the shortfall – but is your sales team aware of your opinions? Setting clear expectations has time and again been proven as the best way to encourage sales people to meet their targets, and if you make those expectations public as well as multi-tiered, your sales team will have an enhanced idea of where they should be headed and what needs to be done to get there.

Financial compensation, while it an important incentive for performance, is far from the only way to encourage sales people. Take a deep look at your plans to encourage sales people to identify all potential incentive avenues for your sales team.

Rhys Metler

Rhys is a tenacious, top performing Senior Sales Recruiter with 15+ years of focused experience in the Digital Media, Mobile, Software, Technology and B2B verticals. He has a successful track record of headhunting top performing sales candidates for some of the most exciting brands in North America. He is a Certified Recruitment Specialist (CRS) and has expert experience in prospecting new business, client retention/renewals and managing top performing sales and recruitment teams. Rhys enjoys spending quality time with his wife, son, and daughters, BBQing on a hot summer day and tropical vacations.