Feature Article - January/February 2017

Motivating Peak Sales Performance

Creating Effective Sales Incentive Programs

By Deborah L. Vence

Program Changes

The rapid increase of available data has caused significant changes. Enhanced reporting and analytics allow program owners to refine incentive strategies and show the value of a program, Carr said.

"Because incentives are known to be a sound business practice to focus sales forces, companies are not afraid to launch a program, but they do want to make sure they are getting the right results," he said. "Reporting and centralized program management allow for the best view into the program and its potential outcomes."

The emergence of sophisticated technology and analytics capabilities enable program designers to create program experiences that are more tailored to the individual and more social than ever before.

"These tools permit companies to move well beyond one-size-fits-all approaches and give participants a level of autonomy and understanding that empowers them to perform at full potential," Frey said.

Sophisticated analytics also help program owners to develop program performance scenarios and accurately forecast total program impact at both the macro (program) level and micro (individual) level.

"The exponential increase in computing power has enabled machine learning to become practical for an incentive program of any scale. This allows analysts to work faster and with more accuracy," he said.

"It's also important to note that with so many recent advances in the social sciences—especially neuroscience, social psychology and behavioral economics—program designers have access to a wealth of behavioral insights to create participation experiences that enrich lives well beyond the acquisition of status and stuff," he added.

When it comes to technology, Wenthe said that it "is allowing us to be much more precise and get closer to the individual. Analyzing data can help programs become more predictive.

"Many companies now also have the proper data to truly understand the value an incentive program provides to the organization," she said. "For example, CRM systems help program designers know when to reward movement through the system, providing incentive to move a prospect through the sales funnel. We can see what kinds of movements and timeframes are most likely to result in a sale and award for those."

Making Programs Effective

For a program to be effective, it has to be communicated with creative and memorable program materials. "After all, if no one knows about the program or remembers what they have to do to hit the goals you set, it cannot achieve the lift needed," Carr said.

Also, it is important to connect with the aspirations of the audience. "Images and words that make participants envision themselves enjoying their reward can go a long way toward inspiring the right actions," Carr said. "Whether their personal dreams include sitting on a beach, going to a concert, or showing off a high-end watch or piece of jewelry, the right message will motivate eligible participants to hit their goals."

He also suggested giving updates throughout the qualifying period to keep the program top-of-mind and everyone engaged.

"E-statements and program dashboards can help participants track their progress. Keeping the rules simple and easy to understand is key," he said.

To make programs effective, don't solely focus on revenue. "Branch out to also include product mix and margin attainment or even training completion or deal tracking and registration," Wenthe suggested. "Multiple studies show that product and sales training have a positive impact on sales goals and growth."

Frequent goals or quarterly opportunities will keep your people engaged, too.

"And, of course, make sure they actually know how they're performing. Communicate frequently," she said. "Consider performance levels to keep your mid-performers reaching. A large annual goal can feel unattainable unless there are markers throughout the year to encourage continued progress."

Frey suggested a number of considerations for designing effective sales incentive programs. Here are some of the basics:

  • Begin with a solid understanding of the people for whom you're designing. Put yourself in their shoes to get a sense for their needs, aspirations and frustrations.
  • Consider how the entire experience will unfold over time and what you want people to think, feel, say and do as an outcome of their participation.
  • Remember that people must think the program is important and that participation creates a sense of shared destiny.
  • Make sure program participants have everything they need to be successful.
  • Know who your top performers are and make sure they'll be recognized for their outsized contribution.
  • Also, include "B" and "C" players because moving the middle will increase results well beyond what top performers can do on their own.
  • Offer a wide variety of rewards that will appeal to a diverse audience.
  • Provide regular, personalized performance feedback.
  • Keep the program fresh and relevant by introducing new features that break the pattern of what's expected.