Creating a Sales Incentive Plan That Actually Works

Creating a Sales Incentive Plan That Actually Works

July 1st 2021 - customer loyalty

In this day and age, incentivising a sales channel is pretty much expected. In fact,  81% of top-performing companies utilise incentive programmes to reward their sales associates. It’s all very well having one in place, but how do you ensure you get your desired outcomes? Well, it’s all in the planning! 

Whether you’re thinking about launching a new sales incentive or you’ve decided to review and improve your existing programme, we have some tips on how to plan effectively.

Identify objectives

The reason you’ve even considered a sales incentive programme is because you have something in mind that you want to accomplish - your objectives!

It may be that these objectives are related to increasing sales and revenue or improving your service delivery, or both! Maybe you want more engagement and enthusiasm from your sales network when launching new campaigns. Whatever your business objectives are, it’s important to list the desired outcomes you’d like your incentive programme to deliver. Having these available to refer back to will help you set benchmarks and review your programme’s performance over time. 

Non-cash rewards all the way!

So you’ve set out your objective, now you need to consider how you’re going to incentivise your sales network. Cold hard cash –– is it really the best motivator? 

The answer is, without a doubt, no!

The truth is, humans crave recognition and rewards that are personal and meaningful to them. You may think that cash would be preferred, but it’s also likely to get swallowed up by bills or something else that won’t be remembered. 

Offering cash doesn’t help to differentiate your brand in the seller’s mind, and it may not necessarily inspire the type of behaviours you want. You want salespeople who are driven by passion for your product—people who are inspired by your rewards. Distributors who are motivated by a reward that aligns with their interests will put effort into representing your product in the best possible way. Remember, the aim is to reward your sales network for engaging in activities that align with your brand and ethos, not just selling.  Otherwise, you’re simply rewarding them for completing chores on a to-do list.

Learn more about incentivesmart's engagement platform. 

Set achievable targets that warrant the reward given

If someone offered you a box of chocolates for cleaning their five-bedroom home, chances are you’d politely turn down the offer. However, if they offered you a restaurant voucher you may think otherwise!

The rewards you offer your sales network need to be proportionate to the effort they need to put in. Very little is going to demotivate a sales team more than unrealistic targets. 

If, for example, you sell a high-ticket item, consider the average number of units a distributor can sell in a specific time frame. Be sure to consider the target demographic and typical sales cycle too. This will help you create challenging, but reachable targets.

The incentive you provide should reflect the time and energy it takes to drive a conversion. In other words, rewarding your sales channel with a branded t-shirt for selling £5000 worth of goods isn’t going to get anyone’s sales mojo going. 

Use a sales incentive platform that allows users to track their progress and keep up to date on how close they are to claiming a reward. Not only will this keep the incentive top-of-mind, it’ll keep distributors motivated and reassures them of your commitment to consistently recognise their achievements. 

Don’t set and forget your programme

An incentive programme is a mutual commitment. Your distributors promise to achieve the targets you set out, and you promise to acknowledge and reward the hard work they do. Part of your responsibility is to keep the individuals enrolled in your programme engaged, informed and inspired. The key to achieving this is through regular communication. From updates on products and campaigns, to acting on the feedback you receive and encouraging people to log in, track their progress, and stay engaged with the programme. 

Make it easy to redeem the incentive

Your sales channel partners are busy –– hopefully selling your products! So don’t ruin a good thing by burdening them with complicated admin tasks to receive their well-deserved rewards. Simplify the process of redeeming a reward as much as possible. This can be achieved through an easy-to-use portal and an intuitive interface that shows them how many points they’ve clocked up and what they can redeem them for. 

Consider the budget

Of course, every business is limited to a budget, and your incentive plan should be within the realms of what you can afford––but don’t pull those purse strings too tightly. Consider what the return on investment is from each sale and dedicate an adequate portion of that income to your sales incentive plan. 

Acquiring new customers is expensive, but if you encourage your distributors to focus on retention, upsells and upgrades, you can achieve a much higher value for your margins, so be sure to reward their efforts in these areas adequately. 

Selecting the right loyalty reward platform for your sales channel will be a significant part of your planning. Book a demo with us and discover how a channel loyalty reward platform can help you report on your customer retention KPIs and demonstrate an ROI from your distributor reward programme.

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