Feature Article - May/June 2018

New Directions in Sales Incentives

Technology, Gaming Elements Influence Programs

By Deborah L. Vence

With intense marketplace competition, sales incentives are more important than ever to a company's business strategy. What's more, companies are using incentives programs as a means for overall success.

"We see a shift away from not just 'making the sale' but also wrapping in 'how' the sale gets made, and if it's in line with the culture of the organization," said Melissa Van Dyke, president of the Incentive Research Foundation (IRF). "Whether this is through peer-to-peer recognition or via qualifiers that include meeting certain training/culture goals, more organizations are using their incentives program as a tool for overall organization success as well as sales success."

The Latest Trends

One of the latest trends is that a number of new tools are being used in sales incentive programs to help build engagement.

Robert Purdy, founder, CarltonOne Engagement, noted that some of those tools include:

  • Gamification: "This is the art of developing special sales metrics that once achieved trigger a special badge or they may unlock a game piece," he said. "Collect all the game pieces and the salesperson will earn bonus points. In most cases, these game pieces are triggered by specific sales achievements, which help drive higher sales engagement."
  • Express Claiming: "This is an amazing tool that is designed to help sales reps to identify and claim their sales," Purdy said. "For many large channel sales organizations, it's often very difficult to associate the sale to the correct sales rep. Point-of-sale data may not identify the sales rep; however, in most cases, we do know the sales organization, so we built Express Claiming to help pool unclaimed sales by channel partner. The tool notifies the sales team that there are unclaimed sales in their pool and the reps simply claim their own sales. In order to moderate any potential conflicts, we added the ability for a manager to approve the claims as well as make any changes to correctly align all sales claims by [the] rep."
  • In the end, the best sales incentive programs always will underperform if the rule structure isn't defined correctly.

    "It's a balance between driving the right product mix at the right time to the right sales target customers," Purdy said. "Determining what's 'right' is where the seasoned sales managers earn their stripes."

    Victor Sawi, vice president of sales and services, Next Level Performance, said his company's clients are experiencing fierce competition in the marketplace, making sales incentives especially important to their business strategy.

    "We are particularly seeing growth in channel programs, where capturing mindshare and brand loyalty are more and more important," he said. "As a result, many clients are committing to more robust communications and technology plans to support their programs and to keep them engaging on a constant basis."

    In addition, he is seeing an increasing understanding that to capture the entire sales force's best efforts the program also must inspire those who might not win the big rewards.

    "Smaller rewards, proportional to efforts and achievements, can help keep everyone involved," he said.

    In fact, the IRF released a study that showed top performing companies prioritizing "reach over exclusivity."

    "When there is so much competition, most organizations are looking for ways to capture every possible incremental increase throughout the sales organization," he said.

    The study, "Ten Things Top Performing Companies Do Differently," released in August 2017, stated that when top performing companies were asked "whether their non-cash program design was structured with the goal of rewarding and recognizing the truly exceptional performers (exclusivity) or if it was structured with the goal of each participant receiving a recognition or reward in the program (reach), top performers were statistically more likely to say 'reach' regardless of program type. While 56 percent of top performing companies said they prioritize reach for both employee and sales programs, only 36 percent and 28 percent of average companies said so respectively."

    How Programs Differ Now

    Sales incentive programs of today differ a bit from those of 20 years ago, and what's driving that change is technology. "We are delivering programs and communications via mobile apps and websites, using digital marketing to get the message to the sales force in the moment," Sawi said. "It gives much greater immediacy and urgency to programs. Especially with year-long campaigns, it is essential to keep the program front of mind, and that's possible with the tools that are available today.

    With intense marketplace competition, sales incentives are more important than ever to a company's business strategy. What's more, companies are using incentives programs as a means for overall success.

    "And with our e-blast capabilities," he said, "we have a view into who's engaged with the program and what communications are working with each audience. Open and click rates, along with other metrics, give us better insight."

    Salespeople are consumers, Sawi said, and their expectations from incentive programs reflects the consumer interfaces they are used to, including online social interactions, real-time data and maximum access points for delivery of information. "Sales incentive design and technology must keep up with those expectations to be relevant," he added.