Feature Article - January/February 2017

Motivating Peak Sales Performance

Creating Effective Sales Incentive Programs

By Deborah L. Vence

Most Typical Rewards

The most motivational rewards and the most typical rewards are, unfortunately, two different things, Wenthe noted.

"Motivational means personalized, authentic experiences. This could be unique travel options for top earners or hard-to-get local event tickets for mid-earners. I say 'personalized' because some people are dying for the latest technology, while others are trying to get/be healthy," she said.

"In some cases, that overlaps with a fitness tracker, but in many cases, it doesn't. It is individual preference," she said. "So, choice is still a big factor."

Merchandise, gift cards, individual travel and event tickets are typical reward offerings for sales incentive programs that Carr's company manages on behalf of its clients, although the mix may vary based on the target audience.

The most motivational rewards
and the most typical rewards are, unfortunately, two different things

Recent joint Incentive Research Foundation (IRF) and Incentive Marketing Association (IMA) research shows that every participant in recognition and incentive programs has a unique profile, with unique preferences.

"Providing a variety of reward options increases the chances of appealing to every participant, and is a key component of motivating people to deliver their best effort," Carr said.

"Over the last year, we've seen spikes in redemptions for individual travel and event tickets," he said. "Many sales professionals already have a big screen TV or high-end grill, but there is a definite appeal to going on a trip to the Caribbean, seeing a favorite team play or attending the hottest concert of the year. These are typically trips and events they may not normally do on their own, so the program becomes linked with memories that last a lifetime."

Given that people are so different in their reward preferences, it's really important to provide choice—a wide selection where everyone participating in a program can find items that appeal to them, noted Mary Luckey, director of reward strategy, Maritz Motivation Solutions.

"Gift cards are almost always big redeemers, mainly because they're easily understood and can be given as gifts. But they may not always be memorable if redeemed for everyday necessities," Luckey said.

Wenthe agreed that many companies have relied on gift cards. "Gift cards themselves aren't bad," she said. "But if there isn't a presentation factor to go along with the award, gift cards are extremely impersonal. Make sure the award presentation matters and fits the individual."

Luckey added that tangible rewards, particularly electronics and housewares, are perennial favorites, with the brands and models varying by personal preference.

"Creating a 'wish list' of rewards remains a great way for participants to convert sales goals into personal reward goals," she said.

Also, travel isn't just for groups or top performers.

"Offering individual travel awards lets participants build their own experiences and share the memories with family and friends," Luckey said, adding that charitable giving is another growing reward category.

"People want to give back to their community, protect the environment and do what they can to make the world a better place," she said.

While traditional giving options might sometimes see a lower redemption, people will pay special attention to rewards where a portion of the proceeds go to charity or to sustainable rewards that, for example, help people in developing countries earn a living wage.

"Regardless of the rewards you offer," she added, "it's important to keep the selection fresh by changing things up frequently. Doing so helps maintain interest and gives people a reason to keep coming back to explore new offerings."

Program Caveats

A sound design is essential to running a sales incentive program that not only generates results, but also builds business for the long-term.

"In a competitive marketplace, metrics should also be about the actions that build relationships with customers over time," Carr said. "Every sale and the service around it should be an experience that draws the customer back to buy again. It's important to consider how your incentive program fits into your long-term strategy, in addition to boosting sales in the immediate."

Wenthe said people have to be compensated properly for any incentive program to work.

"Ensure your current commission plan works effectively. Use incentives to push your people above and beyond baseline goals or to promote specific products/services or for a time-bound drive," she said.

"Many programs still put the majority of the focus on top performers, with low performers taking the rest. Don't forget about your middle performers. They need coaching, frequent goals and strong communications as much as the other two groups," she added.

For salespeople who are employees of your company, the opportunity to earn non-monetary incentives needs to be balanced carefully with base compensation and variable cash earning opportunities like bonuses.

"Here, it's important to think how these rewards will be positioned within the context of a total compensation package with non-monetary, tangible rewards focused on achievement of more immediate goals that contribute to the organization's long-term success," Frey said.

For any sales incentive program, it's important to consider four key elements that serve to support the participation experience. "These elements or 'pillars' include: a head-turning attention strategy, a goal commitment strategy, a progress feedback strategy and a rewards strategy," Frey noted. "Each pillar, by itself, is important, so under-investing in any one risks undermining program results. Good design considers the role of each pillar and seamlessly integrates all four to create an experience that is, in itself, rewarding."

Finally, how a program is structured or the "rules" that trigger reward earnings must be perceived as fair, equitable and achievable.

"If that's not the case, people may not perceive opportunity or will choose to opt out," he added. "Designed right, sales incentive programs engage everyone across the performance curve and provide rewards in proportion to contribution."