Sales incentives can be a great benefit to your department or organization, but there are risks involved with implementing them incorrectly. For instance, you may reward salespeople unfairly if their rewards are based on territory. Rewards may also cause salespeople to coast by once they earn them. To figure out the most effective strategy for your particular supply chain, follow these five guidelines: Step 1: Analyze Your Sales to Focus Your Goals Take a look at your current sales. Analyze sales by gross numbers, product lines, profit margins, territories and sales reps. Rank each of these categories in order of performance. This will help you determine where your pain points are and what your incentive program targets should be. You might discover, for instance, that much of your sales come from a single product, so you may consider rewarding your sales teams and sales channel partners for pushing out different products to increase your product mix. Offer smaller rewards for low-margin products that are easier to sell, and bigger rewards for high-end items.

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5 Things to Do Before Developing a Sales Incentive Plan

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Sales incentives can be a great benefit to your
department or organization, but there are risks
involved with implementing them incorrectly. For
instance, you may reward salespeople unfairly if their
rewards are based on territory. Rewards may also
cause salespeople to coast by once they earn them.
To figure out the most effective strategy for your
particular supply chain, follow these five guidelines:

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Take a look at your current sales. Analyze sales by gross
numbers, product lines, profit margins, territories and
sales reps. Rank each of these categories in order of
performance. This will help you determine where your
pain points are and what your incentive program targets
should be. You might discover, for instance, that much of
your sales come from a single product, so you may
consider rewarding your sales teams and sales channel
partners for pushing out different products to increase
your product mix. Offer smaller rewards for low-margin
products that are easier to sell, and bigger rewards for
high-end items.
1. Step 1: Analyze Your Sales to Focus
Your Goals

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The next step is to decide how you’re going to reward your
sales teams and partners. This is an important step. If you can’t
offer appealing rewards, no one will want to enroll in your
program. Think about the interests and needs of the typical
salesperson you work with.
Cash is, of course, the easy answer, as cash can buy any
reward. But cash doesn’t make a statement. It doesn’t stand
out apart from other bonuses and commissions, and it doesn’t
remind the recipient of your company or their achievement. To
make your reward program memorable and engaging to
participants, you can offer non-cash rewards through an online
rewards system. Companies like Loyaltyworks offer millions of
non-cash rewards, from HDTVs and tools to flight and event
tickets. These kinds of rewards are noteworthy conversation-
starters. They will get people talking about your reward
program and inspire them to be more active within it. With the
promise of exciting rewards, your participants will be
frequently submitting new claims to save up for exciting items
like a new grill or patio furniture.
Step 2: Provide Exciting Rewards

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Start fresh with your reward system: focus on rewarding new
and increased sales, rather than for existing or ongoing
achievements. This will ensure new life is breathed into your
sales numbers and start everyone off on the same foot,
encouraging low performers to excel and outperform those
who are usually the highest performers. You may want to
consider offering tiered rewards—for example, 500 points for
the first $100 of a sale, 1,000 for going over $100, 1,500 for
going over $150, etc. This can inspire your to teams to make
larger sales.
Step 3: Decide How You Will
Distribute Rewards
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Another way to keep participants engaged is to use an
instantaneous system, so they don’t lose interest waiting to be
rewarded for their good deeds. Loyaltyworks online reward
technology allows you to reward your participants immediately
with points. This drives instant gratification and solidifies the
connection between the salesperson’s desired action and their
reward. Those points then act just like currency within an online
reward mall—they can be redeemed for any item in the catalog.
Remember how fun it was to go to the arcade as a kid and
exchange your tickets for prizes behind the booth? The points-
based system works very similarly, only the prizes are much better
than just stuffed bears and keychains. When the reception and
redemption of points is easy and immediate, salespeople will be
much more eager to join your reward program.
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Step 3: Decide How You Will
Distribute Rewards cont.

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Determine how incentives can influence each
salesperson or channel partner. Is there a senior
distributor in a prime territory with large
accounts who will earn rewards left and right,
while smaller-scale partners struggle to meet
your program objectives? Strategize your
rewards system so that it isn’t skewed in favor of
a few individuals or B2B sales partners. Make
sure your low-end and—most importantly—
middling performers will be able to see worth in
joining your program. Your middle or average
performing salespeople are usually those who
have the most potential to grow, so motivate
them to do so! This is where your incentive
program can really make a positive difference in
your sales numbers.
Step 4: Distribute Rewards on an
Even Playing Field
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Click to edit Master title styleCommunication, communication, communication! That’s the key to
getting your employees and sales channel partners to adopt your
program and stay involved. Make sure you clearly communicate to
your participants what they stand to gain from joining; otherwise,
why would they bother? Make yourself available to answer
questions, create a FAQ section on your incentive program website,
and lay out clear rules in the very beginning. Changing rules once
the program has already begun is likely to put off participants and
reduce their interest. Leave as little room for misunderstanding as
possible, and gather feedback to adjust and refine your goals to
drive ROI and ensure your program is even more effective in the
future.
Loyaltyworks offers a communication package with every reward
program so that you have a useful, multichannel marketing and
communication tool that reaches participants through multiple
mediums. Not everyone is best reached the same way—a
multichannel approach ensures you communicate with as many
participants as possible.
Step 5: Communicate Clearly and
Effectively
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Following these five steps can help you avoid a host of common sales
incentive program mistakes. Incentive programs are not one-size-fits-all
solutions. A sales incentive program can help your sales team thrive and
grow your profits, but only if you put time and attention into it from the
start and tailor it to your organizational needs.
Conclusion
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