Before you can incentivize your sales team, you need to have a clear vision of what you want them to achieve and how you will measure their performance. Your sales objectives should be aligned with your business goals, customer needs, and market conditions. They should also be SMART: specific, measurable, achievable, relevant, and time-bound. For example, you might want to increase your market share, improve your customer retention, or launch a new product.
I’m going to simplify the process of motivating my sales team. What does each member want, need. Basically what is there life visions? If you don’t know you’re missing the point. Find out there dreams and help them go and get them … when you care about what you can do for them instead of what they can do for you, they will follow you to the ends of the world. Value them and they will value you and your company visions!!!!
In identifying sales objectives that you want to measure and incentivize, it is imperative that you focus on those sales results that are most important towards achieving the company’s goals. For example, measuring gross sales is important, but is each sales dollar of equal value to the company? Are sales from a new account or new product category of greater value towards the company’s goals than sales from an existing customer or category? If so, then new account sales and new category sales should also be measured and incentivized.
Once you have your sales objectives, you need to identify the key behaviors and activities that will lead to their accomplishment. These are your sales drivers, and they can vary depending on your sales cycle, product, and customer segments. For example, some common sales drivers are prospecting, qualifying, presenting, negotiating, closing, and upselling. You should also consider the quality and quantity of your sales drivers, such as the number of calls, meetings, proposals, or referrals.
Okay! But why are they doing these things and how can you retain and build more like them ….if you have one you can have hundreds…. Believe in them all and they will believe in you… people don’t leave companies they leave managers….
Measuring the quantity and quality of sales drivers needs to be done on an individual level. While these can be useful to predict future outcomes, each individual may have a very different "batting average" from their peers. Be sure to put as much emphasis on the quality of the activities being tracked as you do with the quantity to ensure the best results.
Now that you have your sales objectives and drivers, you can design your incentive plan that rewards your sales team for achieving them. Your incentive plan should be simple, transparent, and fair. It should also balance between short-term and long-term incentives, individual and team incentives, and fixed and variable incentives. For example, you might use a combination of base salary, commission, bonuses, recognition, and career development opportunities.
What I experienced on creating a performance-based compensation plan was tying a portion of your sales reps'/team's compensation to their performance. This will incentivize them to focus on activities that will help them achieve their goals. Compensation will not work along because people need regular feedback and coaching. Help your sales reps understand what they are doing well and where they can improve. This will help them stay motivated and on track to hit the plan. Adding also a positive and supportive work environment where sales reps feel supported and appreciated, so that they are more likely to be motivated to succeed.
I build desired behaviours directly into the SIP. Some sales people's "money motivation" is very high so they simply won't take leaders seriously when they've asked them to follow procedure, communicate effectively, update their forecast regularly... If you build those things directly in the SIP with very clear instructions for what good looks like, they'll become interested in alignment very quickly. Of course you also need to show the results of their good behaviour and the positive effect that it's had to their colleagues and clients to really embed it so that it continues after it's excluded from the SIP.
The next step is to communicate your incentive plan to your sales team and get their feedback and buy-in. You should explain the rationale behind your plan, the expectations and criteria for each incentive, and the benefits and consequences of meeting or missing the targets. You should also provide examples and scenarios to illustrate how the plan works and answer any questions or concerns. You should also solicit input from your sales team and make adjustments if necessary.
I believe this is the one area that is rushed through. Communication on how it the incentive plan works and doesn't work. Understanding how their participation is impacting the whole, while all through the year making them aware of how the plan is progressing, both individually and as a company. This should not be a one time conversation, and having simplicity to the plan goes a long way to them succeeding.
I have learned that your top performers are the best at truly analyzing their compensation plans. They will compare their results from the previous fiscal year to see if their compensation increased or decreased. Be sure you have already compared any changes year over year to understand potential areas of concern and have considered the consequences.
The final step is to monitor and evaluate your incentive plan on a regular basis and make changes if needed. You should track and analyze the data and metrics related to your sales objectives and drivers, such as revenue, margin, conversion rate, customer satisfaction, and retention. You should also gather feedback from your sales team and customers on the effectiveness and satisfaction of your incentive plan. You should also benchmark your plan against industry standards and best practices.
By following these steps, you can incentivize sales behaviors and activities that support long-term goals and strategies and create a high-performing sales team that delivers value to your business and customers.
It is amazing how many organizations do not gather feedback. I have always walked into a design project or new design role and asked "When is the last time you did a seller survey to get feedback about your comp plan?" The answer most often is , "Never." Get the feedback. It will likely reinforce the changes you already knew you need to make, and may shed some light on ineffective measures you have in the plan that you are convinced are working, but in reality are not. Likewise, it can highlight where people may be gaming or taking advantage of the current plan. Surveys are quick, easy, and usually free to send out. You cannot assume to know what is working for your sellers without data based analytics AND direct seller feedback.
Shine the light on the behaviors and activities that lead to KPI achievement and ultimately their incentive. All too often the only thing that is spotlighted for sales is the end results. I’d rather see the hustle and put that on display. How many calls are you making to hit your quota? How many contracts have been extended? Driving the behaviors and acknowledging the hustle they’re putting in to hit their quota goes a long way in a competitive environment like sales.
In my selling experience I felt most motivated in selling where the sales methods (process) and company sales culture were peer supported and reinforced, even enforced through collective and individual team energy; contributing to sales unit esteem and cohesiveness like being apart of an elite preeminent, organization like the Marines or Navy Seals. The organization "Sales Code" was well communicated and the overall vibe of the Sales Unit was "Meritocracy" marked by demonstrated high performance energy, with leaning towards daily "upskilling" in order to achieve small improvements made every day to yield better and better customer acquisition metrics and bottom line results. Attractiveness of the overall opportunity also matters.
✅ Objective setting: Establish clear, attainable, and measurable objectives that align with long-term strategies for sales reps to pursue 🎯 ✅ Skill development: Invest in training and development programs to foster skill growth and enhance performance 🔧 ✅ Balanced evaluation: Create a comprehensive evaluation system that considers both results and effort, reinforcing desired behaviors 📋 ✅ Transparent communication: Foster open communication channels, ensuring your team understands the importance of goal alignment 🗣️ ✅ Adaptable incentives: Adjust incentive programs as needed to maintain relevance and alignment with evolving long-term goals 🔄