What Makes Sales Incentive Programs Work: Proven Ideas and Examples

Sales incentives sound great, don’t they? It’s a program that encourages sales reps to sell more, sell better, and hit their sales targets. The problem is this: the vast majority of sales incentive plans for retail stores don’t work. Now, that’s not surprising. Most sales incentives are poorly implemented, with rewards that are tardy, unfair, or simply inadequate.

Alright, so how do you implement a sales incentive program that will actually work?

In this post,we’ll break down what actually makes a sales incentive program work, with proven ideas, real examples/ samples, and clear takeaways you can apply immediately. So, carry on reading!

• Why Most Sales Incentive Programs Fail to Motivate?
• What Makes a Sales Incentive Program Effective?
  1. Milestones vs. Money
  2. Public Recognition
  3. Fast Reward Fulfillment
• Sales Incentive Programs Examples: What Are Some Common Types
• Creative Sales Incentive Ideas That Go Beyond Discounts
  1. Tiered Incentive Structure
  2. Milestone-Based Rewards
  3. Gamification Incentives
• Real-World Examples of Sales Incentive Programs
• Designing a Successful Sales Incentive Program
  1. What does it take to design an effective sales incentive program?
• How OptCulture Helps Build High-Impact Sales Incentive Programs
• Final Thoughts
• FAQs

Why Most Sales Incentive Programs Fail to Motivate?

One word describes why sales incentives fail: simplicity.

If your incentive plan is too simple, it will fail. It will fail because it’s too easy. It will fail because it’s not difficult enough for people to strive to do better. Most failed incentives are too simple.

So, where do most sales incentive programs go wrong? The big three reasons include:

1. The reward is too far in the future: If reps cannot receive rewards in the form of coupons & promotions or gift cards in the moment, it will not seem achievable, and they will not feel like they are getting a return on investment for their time and effort.
2. No one (or very few) gets the reward: If only a select group of people can get the reward, it means that most of the team won’t be motivated.
3. Unclear or changing rules: If the rules aren’t clear or keep changing, your sales force won’t want to play.

For a rewards scheme to work, it needs to be achievable, easy to comprehend, and fair.

What Makes a Sales Incentive Program Effective?

A sales incentive program is only as good as the planning that goes into it. Objectives, such as revenue growth or product sales, should be established, along with the duration of the program and the criteria for measuring success. Program guidelines and restrictions should also be outlined, and this information should be communicated to your sales team.

To have a successful sales incentive program, you need to shift your focus from the reward to the participant. Here are the top items to ensure an effective program:

1. Milestones vs. Money

Sales reps are more likely to stay motivated if they feel like they’re making progress towards something. Instead of offering one big incentive at the end of the quarter, use milestones to break the program up into smaller chunks.

2. Public Recognition

A little public recognition can go a long way. Whether it’s a shoutout in the weekly meeting, a place on the leaderboard, or a mention in the company newsletter, this will encourage sales reps to compete and participate in the process.

3. Fast Reward Fulfillment

The faster the reward redemption, the more impactful. If a sales rep has to wait six months or longer before a reward becomes available, it’s simply not as exciting or valuable as it would be if they could redeem it immediately.

Sales Incentive Programs Examples: What Are Some Common Types

All sales incentive programs aren’t created equal. Some are more effective in certain situations than others. Here are some common types of sales incentive plan examples:

• Short-term incentive programs: Short-term programs are great for things like a product launch or month-long sales promotion.
• Long-term incentive programs: Long-term programs are ideal for promoting retention and long-term performance.
• Team-based incentive programs: Programs that incentivize teams to work together can be effective for driving collaboration and teamwork.
• Individual incentive programs: Programs that reward individual performance promote accountability and individual effort.

For retail solutions, it’s very common to use a combination of individual targets and store-wide goals to incentivize sales teams. This approach encourages sales while also incentivizing teams to work together to hit store targets.

Creative Sales Incentive Ideas That Go Beyond Discounts

In addition to discounts, there are other creative ways to incentivize sales. Consider the following:

1. Tiered Incentive Structure

Offer different levels of rewards based on different levels of performance. This will keep your average performers engaged while still offering special incentives for top performers.

2. Milestone-Based Rewards

Offer rewards for milestones such as closing their first deal, achieving five conversions, etc. Milestones build motivation and confidence.

3. Gamification Incentives

Consider offering things like points, badges, leaderboards, and challenges. Gamification incentivizes participation and encourages competition.

These are creative sales incentive ideas that can be applied to any sales channel, from B2B to retail to customer sales incentives.

Real-World Examples of Sales Incentive Programs

Here are some real-world examples of sales incentive programs:

• A retail store offers their salespeople a commission for hitting a certain number of conversions during the week. Not revenue conversions, just conversions.
• Monthly, a SaaS business runs a sales contest. The winners receive digital rewards in real time.
• A distributor wants to encourage sales representatives to go out and try again, and to keep going. Different levels of the program provide incentives for repeating the behavior.

The conclusion that can be drawn here is that it doesn’t matter what your staff are incentivized with, as long as it is clearly and consistently communicated.

Designing a Successful Sales Incentive Program

Before we get into the details of a successful sales incentive program, let’s first discuss how to create one. When designing your program, you’ll want to start by identifying what you want to achieve.

Do you want to increase revenue, drive sales growth, or improve customer satisfaction? Once you know your goals, you can develop a plan to achieve them. You’ll need to define the rules and objectives of your program, determine which sales behaviors to reward, and establish the metrics you’ll use to measure success.

Here are some of the ingredients of a successful sales incentive program

• Simple-to-Digest Rules and Eligibility Information
  Don’t let your program fall apart because of confusing rules. Make sure all entrants are clear on how to win and that everyone is eligible to enter.
• Regularly Earn Rewards
  Make sure the rewards are awarded often enough to keep the attention of employees. A quarterly reward program might not hold as much attention.
• Ongoing Program Updates & Communication
  Keep participants engaged by reminding them of the program via email, placing reminders on the dashboard, having reminders at monthly meetings, etc. Out of sight, out of mind for participants.
• Indicators of Program Success (Other Than Sales)
  Sales is not the only metric that is indicative of whether or not an offer is working. You need to consider participation and engagement, and at which drop-off point customers are dropping off. Then, you need to be able to tweak your sales incentives accordingly.
• Continuously Enhance the Program
  A good program is always evolving. Tweak your approach constantly to get the most out of it. This applies equally to marketing incentive programs and internal sales programs.

Read Article: How to Get Repeat Business from Customers with Smart Loyalty Programs

How OptCulture Helps Build High-Impact Sales Incentive Programs

We provide all that you need to build, sustain, and scale a high-performing culture. Because we think that a high-performing culture is the best way to unlock your team’s potential. If you’re just getting started or want to take your culture to the next level, we’re here to help.

Sales incentives. We know a thing or two about them here at OptCulture. We have supported several of our clients in creating programs that are fun, easy to understand, and manage. Our platform offers a range of tools to support program success, including digital rewards, real-time tracking, and program insights. Through working with OptCulture, brands can:

• Provide faster rewards.
• Increase the rate of participation.
• Simplify deployment, management, and administration for large user bases.

Need sales incentives for a retail store or customer-facing promotion? We can help with that as well.

Final Thoughts

The problem isn’t that incentives don’t work; it’s that incentive systems are poorly designed. If you fix the timeline, the information dynamics, and the motivational language, then you’ll get an incentive program that works.

You know the formula: progress, recognition, immediacy. Combine these three elements, and your sales incentive program will be successful. It will motivate your sales force, produce sales, and deliver the results you desire.

Now that you know what makes up a great sales incentive program, put these practices into action. Once you have the right incentives in place, your sales team will be able to achieve more than you ever imagined.