Sales Incentives: How To Use Them To Motivate Reps [Data + Expert Insight]

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Flori Needle
Flori Needle

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Nothing boosts your team’s excitement and energy more quickly and reliably than a sales incentive.

successful sales incentive programs

However, motivating your reps isn’t as simple as choosing a desired outcome (like higher conversion rates) and promising a cash prize to the winner. People are driven in different ways, and people appreciate different rewards.

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This is where sales incentives come into play, as you can inspire your teams and provide rewards that mean the most to them. In this post, we’ll discuss the different types of sales incentives alongside research and expert insight on implementing an effective sales incentive plan.

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Sales incentives are essential in keeping employees motivated, and our Sales Strategy & Trends Report found that recognition for achievements is the second most important aspect of internal sales culture to motivate sales reps. In contrast, a lack of recognition for achievements has the second highest impact on sales reps ability to succeed.

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Let’s review how you can give reps the recognition they want.

There are five types of sales incentives: role-specific, split incentives, presales, omnichannel, and analytics-based. Let’s discuss them below.

1. Role-specific Sales Incentives

Role-specific incentives are matched to individual roles and responsibilities. As salespeople have different tasks, this structure ensures you recognize reps based on their own responsibilities.

For example, a sales manager has different responsibilities than a rep that prospects and identifies leads. A sales manager can be rewarded based on their achievements against their responsibilities; the same goes for the other rep.

2. Split Sales Incentives

Split incentives are when salespeople working on the same deal or project split an incentive when a deal closes, or a project ends. With this model, you can divide incentives evenly between everyone involved or create a split amount based on custom criteria.

For example, if sales staff in two departments work together to close a large deal, you can compensate each member equally or based on their specific role. Or, reps who work in the same territory receive an equal share of commissions or revenue cuts, even if they worked alongside a team in a different location.

This is a valuable model for companies with a complex sales process that involves multiple reps. It ensures everyone involved gets recognized for their work and fosters communication and collaboration among teams because they know that working together to bring a solution benefits everyone involved.

When using this model, lay out the incentive structure and expectations ahead of time so there are no surprises when it's time to give rewards.

3. Presales Incentives

Presales incentives reward reps at different stages of the sales process before a deal has closed. At a time when salespeople see an increase in touchpoints and interactions throughout the sales process, this model motivates reps because it can help fight discouragement that might build during a longer sales process.

Many businesses offer a larger incentive once a deal closes, keeping reps focused and motivated during a short and long-term cycle. You can give a rep an incentive after they’ve scheduled a meeting with a prospect, another after a sales demo, and the final one after a contract is signed.

4. Omnichannel Sales Incentives

B2B and B2C salespeople say they communicate with prospects across an average of two to three separate channels. While communication with a lead might begin over the phone, a prospect might make a purchase online without the help of a rep.

Omnichannel sales incentives ensure reps are rewarded based on the support and value they provide to a lead, regardless of whether they’re present when someone clicks “purchase.”

For example, a business can track a closed deal back to a rep who first contacted a lead via email or when a buyer submitted their information after a product demo session.

5. Analytics-based Sales Incentives

All businesses analyze sales data to make accurate forecasts, set realistic goals and create an ideal sales cycle. Analytics-based sales incentives reward reps based on their behaviors that align with the best practices gathered from data.

For example, if historical data shows that meeting y revenue goals requires a sales cycle length of x days, salespeople receive rewards if they close deals within or in that target time frame.

Sales Incentive Ideas

Now that we’ve gone over the five types of sales incentives let’s go over the incentives you can give.

1. Monetary Rewards

You can add monetary rewards to a paycheck, give cash, or something with a cash value. For example:

  • Cash
  • Bonuses and commissions
  • Salary increases
  • Gift cards (Visa or Mastercard gift cards, or gift cards to restaurants, movie theaters, entertainment options, etc.)
  • Tickets to experiences (concerts, sporting events, etc.)
  • Travel vouchers or travel experiences (hotels, flights, cruises, travel points, etc.)
  • Team trips or company-sponsored nights out
  • Technology gifts (new keyboard, pair of headphones, etc.)
  • Donations to a cause an employee cares about or making a donation in their name

2. Non-monetary Rewards

Some are motivated by cash rewards, and others appreciate non-monetary opportunities. These rewards can be things like:

  • Highlighting achievements in company meetings
  • Website or newsletter features
  • Learning and development opportunities
  • Mentorship programs
  • Opportunities to attend educational or professional development conferences

Many reps are appreciative of these kinds of opportunities.

3. Business rewards

Business rewards can be monetary or non-monetary but are related to your business. For example:

  • Bonuses and commissions (The most effective bonus structure to motivate reps to sell is a bonus off annual performance)
  • Salary increases
  • Promotions and role progressions
  • Additional PTO days or PTO hours
  • Extra vacation days
  • Employee stock options or company stock rewards
  • Work technology upgrades
  • Office modifications

Expert Advice on Implementing an Effective Sales Incentive Plan

Once you’ve decided on an incentive structure, you want your program to be effective.

Dan Tyre, Inbound Fellow at HubSpot, shares his expert insight in the form of three key tips for implementing an effective sales incentive plan.

1. Ask for personal preferences.

Tyre says, “It’s a good idea to identify each salesperson’s preferences when you start working with them.” He says that some salespeople are turned off by public recognition and get embarrassed rather than proud when you announce achievements in front of everyone.

Some possible questions you can ask to uncover personal preferences are:

  • "Would you rather get praise or acknowledgment in front of the team or in private?"
  • "If you win a contest, what's the best way to announce that?" (Email, at a team meeting, at a private check-in like this one, etc.)
  • "Are you motivated by stack rankings or leaderboards?"

2. Use a combination of reward types.

Using a combination of rewards and incentives ensures you’re speaking to each rep’s motivations. Some might prefer a gift card, and others want an opportunity to further their professional education.

Businesses also don’t have unlimited funds, so a combination of incentives is budget-friendly. For example, with a pre-sales incentive program, you can offer non-monetary and monetary rewards at different milestones and a commission when a deal closes.

Tyre says, "I know first-hand the effect of a physical prize. In 1983, I won a table in a sales contest that I still have. Visitors ask me questions about it to this day. My salespeople have won everything from slippers to treadmill desks. As long as the reward is personal and memorable, it'll be motivating."

3. Make Sure Everyone Has a Chance

Tyre says, “Your team will quickly become frustrated if the same person wins your contests over and over again.”

He says you can prevent this by creating classes of participants where people compete against their peers with the same skills and abilities (helpful for role-specific and split sales incentives). Or by creating an eligibility process so someone that dominates every single time can’t be in the running for the same incentives every time.

Create a sales incentive program that works for your business.

Motivation is an art, not a science. The different types of sales incentives discussed above are proven successful, but deciding the optimal sales incentive program for your team is always important.

After all, if reps aren’t excited about reward possibilities, they won’t be as enthusiastic about striving to achieve them.

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