Showing up to work is one thing; bringing genuine enthusiasm to the job is another. So, how can you motivate your team to meet and exceed their goals?
Sales incentives can be a valuable tool to get your team fired up, but they’re not one size fits all. Figuring out the best sales incentives structure to motivate your reps can make a big difference in some cases — helping them come to work energised and eager to get results.
Below, we’ll cover different types of sales incentives to consider, how they can motivate your team, and best practices for implementing an effective sales incentive program that drives results.
What you’ll learn:
- What are sales incentives?
- Types of sales incentives
- How sales incentives can help motivate your sales team
- 10 sales incentives that actually work
- Best practices for implementing sales incentives
- Measuring the impact of sales incentives on performance
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What are sales incentives?
Sales incentives are rewards sales reps receive on top of their base compensation for exceptional performance. This typically means meeting or exceeding sales targets. Sales incentives most commonly come in the form of monetary rewards such as performance-based bonuses, but they can include any type of reward designed to motivate salespeople toward a specific result.
Types of sales incentives
There are five common types of sales incentives. Here’s a quick rundown:
- Role-specific sales incentives: Performance goals vary depending on the role, and role-specific incentives motivate reps to exceed the base goals set for them. For example, a sales development rep (SDR) may earn incentives for surpassing their booked meetings goal for the month, while an account executive may earn incentives for closing more sales than their monthly quota. This can help keep top performers motivated even after they achieve their original goal.
- Split sales incentives: With a split incentive structure, multiple reps working on the same deal earn an incentive reward that is split among them — either evenly or based on predefined criteria related to their roles or contributions. That ensures everyone involved gets rewarded for their part, and reps are encouraged to work together rather than compete against each other.
- Presales incentives: Most sales require multiple steps before a deal is closed. Presales incentives reward the reps involved in these steps and can be a valuable way to keep reps motivated throughout longer sales cycles.
- Omnichannel sales incentives: The Salesforce State of Sales report found that reps interact with prospects across an average of 10 different channels. Omnichannel incentives involve tracking all those interactions to ensure every rep who contributes to a sale is rewarded.
- Analytics-based sales incentives: These incentives are based on your sales analytics. They reward specific, data-backed goals based on what your data reveals to be the most valuable behaviours for closing deals.
How sales incentives can help motivate your sales team
Sales incentives help you reinforce the behaviours you want employees to prioritise. They set you up for mutual success: Your company achieves higher sales and profits, while your reps get an extra treat (most often money, but not always).
I’ve found that many people who are drawn to sales are intrinsically motivated to hit high sales numbers because they’re competitive and like to win. Adding sales incentives to the mix gives them an additional reason to give it their all. For sales reps who aren’t as driven by competition, incentives give them something tangible to work toward. Some people love the game, but everybody likes the prospect of extra money or rewards.
Plus, incentive compensation can improve employee satisfaction. Getting a valuable reward because you earned it feels good. It’s a constructive way to show your team you value their hard work. Employee turnover is expensive. Sales incentives are a vital tool to help you keep your top performers and avoid the cost and labor of recruiting and onboarding.
10 sales incentives that actually work
Money is the most obvious type of sales compensation to consider. And in my opinion, it’s the best type of incentive to motivate salespeople. It’s clear, straightforward, and universally popular.
But you can also shake up your incentive program by adding more creative ideas to the mix. Here are some to consider:
1. Sales contests
Using sales contests as an incentive can be a powerful way to leverage the competitive spirit. That could mean posting a leaderboard that’s updated regularly to show who’s closing the most deals. That may be enough to motivate some of your reps. But you can sweeten the deal by offering the winner a prize — monetary or otherwise — at the end of the month or quarter.
2. Recognitions and awards
Public recognition for big achievements can make a huge difference for some. You can provide bragging rights for reps with titles like “salesperson of the month,” or hosting an annual ceremony where high achievers are recognised and given awards. You could also set up a “President’s Club,” so employees have a prestigious honour to work toward that comes with special benefits, like an annual trip.
3: Stock options
Stock options are a type of monetary compensation that give employees more reason to be invested in the company’s success. They’re a good cash alternative if you want to reward employees in a way that encourages them to care about the long-term success of the business.
4: Extra paid time off
Employees who work hard deserve time for rest and leisure. Offering additional paid vacation time in exchange for meeting performance targets can be a strong motivator.
5: Team rewards:
Selling isn’t a solitary activity, and many successful sales are the result of a team effort. Rewarding your team with a group activity such as a retreat, a nice dinner out, or an escape room experience can double as a reward and a way to encourage further bonding outside the office.
6: All-expense-paid vacations
Vacation packages are a game show standard for a reason — it’s an exciting prize to get. For big wins, offering reps a free trip to a coveted location, or travel vouchers that let them choose their destination, can be an attractive offer for many.
7: Event tickets
Whether it’s season tickets to their favorite team’s games or a hard-to-snag ticket to a concert or play, helping your top sales reps enjoy a cultural activity that matters to them can be a good way to boost their motivation.
8: Gift cards
Like cash, gift cards give sales reps a way to choose how they spend their reward. Something like a Visa or Mastercard gift card can be used almost anywhere, while gift cards from widely used retailers can be put toward a need or an indulgent purchase they might not buy for themselves otherwise.
9: Hot-ticket tech gifts
If you’re going to provide a specific item as a sales incentive, you should choose something that’s high value and universally useful. In today’s world, it’s hard to go wrong with a tech item like a new tablet, laptop, or smartwatch. You can buy a specific item to offer employees or give them a choice of gadgets (which could be valuable for those loyal to specific tech brands).
10: Executive access
Offering top performers a chance to enjoy a nice dinner or event with the company’s executives can be a powerful motivator. It gives them a chance to connect with the company’s top stakeholders, receive positive recognition, and provide direct feedback to those with the most power to implement change.
Best practices for implementing sales incentives
To get the best results from a sales incentive program, the right design and implementation approach is important. Some of the best advice I can offer is:
Keep it simple
At organisations I’ve worked with, I’ve seen a common tendency to make incentive plans complicated — to add more rules and different ways for reps to make money. That can backfire. If it’s hard for a salesperson to understand how the sales incentives work, it will be hard for them to know what to prioritise.
Seek to craft a straightforward incentive program that people can easily grasp. Write out your commission plan on paper. How many steps does it have? How many caveats are there? Minimise unnecessary complications around reward structures.
A good rule of thumb is to consider whether someone could work out their commission rate with just a calculator. If not, it’s probably too complicated.
Listen to your team
Those with the best insights into what will effectively motivate your sales team are the people on it. Actively solicit their input when developing or updating your incentive program. Understanding what they would go the extra mile for can make a huge difference when it comes to results. So, ask your team what types of rewards matter most to them and what incentive structures feel motivating.
For example, some people thrive on competition, but it’s not for everyone. Switch up your incentive structure periodically to appeal to different preferences. Don’t always force your team into competition with one another for bonuses. Encourage a collaborative approach — like split sales incentives or team activity rewards — for those who enjoy teamwork.
I recommend setting up a feedback roundtable to hear reps’ ideas and suggestions. You can make it clear that you may not be able to use every recommendation they offer, but knowing what matters to them will help you develop a program they’ll respond to.
Use the right tools
Tracking earnings and making sure team members receive the sales compensation they’re owed can get complicated. But the right technology can make incentive compensation management much easier and give employees the peace of mind that they’re getting the incentives they’ve earned.
Well-designed sales incentive software can make many aspects of running a sales incentive program much easier. Some features that make a difference include:
- Automation and workflows: Let your tech handle some of the work for you by automating even the most intricate commission structures and nuances like accelerators, tiers, triggers, and more.
- In-app comments and notifications: Manage questions, comments, and disputes efficiently, all within a single platform. Encourage cross-org collaboration with real-time comments and notifications for quicker alignment.
- Customised rep statements: Align organisational priorities to seller motivations. Plus, make it easy for your reps to see commission statements, monitor their progress against goals, and track potential earnings.
- Automated expense reporting: Maintain compliance under ASC 606 and IFRS 15 with automated, audit-ready expense reports. Manage exceptions, fringe benefits, varied commission types, and more.
- Integrations: A tool that connects with other products like your customer relationship management (CRM), enterprise resource planning (ERP), human capital management (HCM), and payroll software will help you create a real-time, single source of truth for all commission needs.
My preferred incentives tool is Salesforce Spiff. For salespeople, it can work as a go-to source for reviewing how the reward structure works, the target achievements to aim for, and the commission rates associated with each one. For admins and sales teams alike, it’s easy to use and helps you track the number of performance targets achieved and payouts completed.
Communicate the plan to your team
Your sales reps must understand the incentive plan for it to have an impact. Communicate how it works clearly, and figure out how best to distribute the plan details to your team so they all see it and know where to go to review it as needed. If you have a central knowledge base the whole team uses, such as a CRM, that’s a good place to put it.
While I recommend keeping your plan simple, if you end up developing a more complex program, it’s especially important to make the details of the plan easy to find. Your reps will want to refer to it to remember which goals to focus on. Their ability to understand how the incentives work is crucial for getting the results you want.
Be transparent
The last thing you want is for salespeople to question whether they’re receiving the commissions they’ve earned. I once heard from a sales rep who was convinced they’d never been paid the correct bonus amount. If any of your reps feel that way — even if it’s not accurate — they’re unlikely to remain motivated by the incentives being promised. Worse, they’re more likely to defect for the first job opportunity to come along.
The best way to avoid that is to keep the plan transparent. Make it easy for salespeople to track the specific performance targets they’ve achieved and commissions they’ve earned. And strive to keep all the data in your sales tool clean and accurate, so the sales team knows they can rely on that information.
Measuring the impact of sales incentives on performance
While beneficial motivators, sales incentives come at a cost — an important factor to consider when planning your sales budget. Establish the key performance indicators (KPIs) you want to track for your sales incentive program to ensure you successfully align incentives with your main business goals.
Some metrics that can help you measure the success of your program include:
- Overall sales: Track your total sales to determine whether incentives are contributing to an overall increase in sales over a set period.
- Number of new customers: Determine how many of those sales are from new customers to help measure whether your incentive program is driving conversions.
- Number of returning customers: Also pay attention to how many existing customers stuck around during the incentive period, so you can gauge how well your sales team is building and nurturing relationships.
- Incentive program costs vs. ROI: To ensure you don’t overspend on your program relative to what it helps bring in, keep track of how much you spend, as well as how many sales you close and how much revenue you generate during a set period.
- Employee turnover rate: In addition to increasing sales, incentives are about rewarding employees for their hard work and successes. Tracking your employee turnover rate before and after implementing an incentive program can help you compare its impact on employee satisfaction.
- Employee satisfaction rate: Also look for ways to gauge overall sales team satisfaction. This can be difficult to measure effectively, and you may be tempted to stop at running employee satisfaction surveys. Surveys can be a good temperature check, but they work best when paired with anecdotal impressions. Spend time with your sales team, listen to their feedback, and pay attention to how they act at work to help round out the picture.
Sales incentives can encourage results and improve morale
The most important takeaway I can impress upon anyone designing a sales incentive program is this: Give your team the information they need to make the decisions you want. And when in doubt, keep it simple. The easier your program is to understand, the more likely salespeople are to get how it works and act accordingly. With the right plan and the right tools to implement it effectively, you can grow your sales and improve job satisfaction for your sales team at the same time.
