Most salespeople are naturally competitive. Their desire to achieve is important to being good in their role. That said, it may not surprise you to learn that nothing boosts a sales team’s excitement faster than a sales incentive program. It’s a tried and true method for increasing production that works time and time again.

However, motivating your reps isn’t as simple as throwing a competition together or handing out bonuses. There is a science to the art of motivation. In fact, not planning a sales incentive and designing it properly is one of the most common mistakes companies make.

To avoid falling into that trap, a company should structure a successful incentive that drives results and also ties to the overall business objectives. A badly run incentive can be more damaging than not having one at all.

These three factors are critical when designing sales incentives.

1) Identify the desired goal(s)

Effective motivation starts with identifying the desired outcome you want from your sales team. Is it a revenue figure you want to achieve? Do you need to sell a certain number of units of your product to be considered a success? Maybe you want to improve your conversion rate. Whatever your company would like to use to quantitatively define success, is fine, but you must identify it and be clear in your communication to your team so that everyone is swimming in the same direction.

When the criteria are vague and nebulous, your sales people will get frustrated and the incentive could develop negative energy and little to any true meaningful results. Establish a clear time frame for your incentive as well.

2) Make Sure the Sales Incentive Is Attainable

Friendly competition is healthy. However, if your sales incentive doesn’t allow everyone a decent opportunity to try to attain the goal, you could have dissension in the ranks.

Some sales people will always dominate, but if the same people win over and over again, your incentive participants could become disengaged and just not bother trying anymore.

Be sure that the goals are aligned to your team, region, product line and other elements to enable the sales incentive to be fair and provide an equal opportunity for everyone to reach the desired goal(s). For example, a salesperson in a metro region or large market may have more opportunity and higher revenue goals than a person in a smaller market where the sales opportunities just aren’t the same.

Some incentives are team driven and not based on individual performance.

It can be good practice to switch up the rules and design of your contest every so often as well. That prevents the company from repetitively awarding the same skills or behaviors every time.  As an example, if the last contest rewarded the salesperson who sold the most units, the next program could motivate the salesperson who increased their closed sales by the greatest percentage.

3) Give Non-Monetary Rewards

The only way to improve a cash award over time is to give more cash. Eventually, instead of being viewed as a reward for exceeding performance goals your sales people come to expect it as part of their yearly salary. That is NOT the goal of an incentive. In general, it is best to avoid purely monetary prizes. A company should ensure their incentive award does not get confused with a paycheck, where the glow of winning fades after the money had been spent on bills or a night out.

Instead, imagine you treat your winners and a guest on a trip to Mexico, or give the winners of the contest a choice of an ATV or a set of Callaway golf clubs. Every time he/she uses that prize they won, they will associate it with your company and memories of the great awards that they have the chance to experience when they work hard. It is a competitive differentiator for your organization too – for keeping and attracting top talent.

The incentive reward should be personal and memorable to be motivating. Because motivation is so specific to the individual, providing an award that allows for some level of choice, is the most effective.  

Not everyone golfs, so if your non-golfing sales rep wins clubs, they may want to choose something else. That is why sales incentive technology platforms (where winners earn points) have become so popular. With these technology solutions in place, your people can earn points and redeem via an online catalog for whatever they wish. They are also highly incentivized to both work toward that goal and keep track of the progress.

Of course, there are other important factors to keep in mind when launching a sales incentive but these three will get you started in the right direction. There are a variety of ways to design a sales incentive promotion and implement it.

The proof that sales incentive programs do work can be demonstrated across all industries, companies and budgets. Determining how best to tailor a sales incentive to your specific company can also be done through the assistance of a performance improvement company, such as One10, that does this for companies of all sizes. If you feel that implementing a sales incentive just seems too overwhelming, consult a professional to help. They will be able to provide a variety of methods for program design and references of other companies they have worked with successfully.