Top 3 tips for making Incentive schemes work!

Have you ever thought that why Sales team motivation may not be that great even if you would have had very interesting/innovative incentive schemes for them?

I have been studying Sales Incentive market for some time and most of us (rather all of us) would agree that higher is Sales Motivation, higher is Sales Achievement of the organization. But many salespeople will land below the set targets and we say that they are not enough motivated. By the way, HR/Sales leaders would say that they have created best incentive plans for them.

Psychology is THE game !!!

So, you have set best incentive schemes, but people are still not motivated. Let me break the news to you, its all about Psychology. And this is common in organizations where following 3 conditions are seen.

1. No visibility of incentives earned by salespeople: Around 99% of the organizations do not use any system to give real time view of achievement of incentives to salespeople. And there is famous phrase:

Out of sight, out of mind !!

As incentives are given to show right behaviors, those right behaviors are not reinforced if achievement data is not in hands of salespeople every day, whenever they want. And not many salespeople will make efforts to get this data from internal teams.

Tip 1: Do whatever it takes to enable salespeople to see real time data of their incentive achievements. And it should be easily available for them.

2. No reinforcement of what they missed: Imagine if you do not keep telling your kids on what they are missing if they are not focusing on something. Do you think they will really improve? Let me tell you, it is common human psychology, be it kids or adults. So, if you cannot show where your salespeople have missed on a required behavior and because of that they could not earn a particular amount of money, there is no reinforcement of performing better. Even they do not know how they are performing with respect to overall team. Have they known, they are making less than their other friends, they would be putting in additional efforts? Many things in life are vicious circle.

No push, No pain

No pain, No gain

No gain, No push

Tip 2: Make sure salespeople see what they have missed by not achieving the set targets of relevant parameters. When they constantly see they could have earned more, they will put in higher efforts.

3. One single incentive scheme for all: Different type of people need different kind of motivation pushes. There is great HBR article which talks about different type of incentive schemes of managing salespeople who are Stars, Core performers and Laggards. Even your different lines of business should have different parameters of measuring company success. More the salesperson is performing on such company success parameters, more that salesperson should earn.

Don't follow OBOR (One Business One Rate) but follow DESI (Differential Employees Segmented Incentives)

Tip 3: Have differential schemes for different set of people to drive each salesperson optimally. It's like sniper shooting than mass bombarding.

Remember to be swift whenever market dynamics change, which means you should be quickly able to tweak your incentive scheme if market conditions change. Take an example, there is new competitor in particular segment entering a particular region, and you need to keep your market share constant or even better. You would have to quickly (may be same day) change your incentive policy to enhance your incentive in that particular region, segment OR bring in new parameter altogether. If you wait for a month for execution of your plans, you are gone as your competitor would have made inroads in the market OR worst, even poached your salespeople who would not know about your great plans.

Bonus Tip: Change your incentive scheme immediately with change in market dynamics. Do not wait as each passing day will make things tougher for you.

Do share this article if you love it. Any inputs are welcome. Happy Incentivizing!!!

#sales #incentives #analytics #employeeexperience #NewWayOfPay #saleseffectiveness #salesdevelopment #salesenablement #hr #compensation #atmax

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About Varun Gupta

This article is authored by Varun Gupta. Varun is CEO of Atmax Technologies which specializes in Cloud solution of Total Compensation Management and Sales Incentives Management. His interest areas are Sales Incentives, Compensation and Benefits, Sales Enablement/Effectiveness, HR Technology and Entrepreneurship. You may reach him at [email protected]