How a Competitive Sales Incentive System can Increase Revenue

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In sales, the professional’s ability to perform highly is based on two main factors. These are: ability and motivation. More often than not, the process of recruitment focuses greatly on the candidate’s ability to perform his/ her responsibilities; without paying any consideration to the individual’s motivation. This is turn leads to the recruitment of highly qualified individuals; but since these salespeople are not properly motivated, they leave the company as soon as a better offer comes along, even when the difference is marginal.

Alternatively, the sales professional may stay with the company, but fail to invest their full potential into their responsibilities, which in turn means that the business ultimately loses money. The inter-relation between high qualifications and motivation is therefore clear in that, if the sales professional does not have enough incentive to fully invest him/ herself into the company, the business cannot benefit from his/her high qualifications. For this reason, a clear understanding of the company’s sales incentives system is an essential component of the recruitment process.

Importance of a Competitive Sales Incentive System

A sales incentives system refers to compensation that is offered to salespeople once they have reached certain pre-set goals in sales. For the system to be successful, it has to be well defined and concise, in order to clearly communicate it to candidates during the recruitment process.

A competitive sales incentives system is essential because it:

  • Helps to stir the productivity levels of the sales team, which in turn helps to drive sales.
  • Reduces the cost of making sales.
  • Increases profits for the business.
  • Facilitates the expansion of the business.
  • Helps to establish better margins.
  • Enables the business to attract the crème de la crème of sales candidates during the recruitment process.

Qualities of a Good Incentives System for Sales

1. Must be Aligned with the Company’s Objectives

When developing a sales incentives system, it is important to consider what is important for the success of the business. These elements vary from one business to another and range from gross revenue and margins, to controlling market share, and so on. It is also important to consider the business aspects that the company places most emphasis on. For instance, while some businesses place more value on acquiring new accounts, others are keener to nurture repeat business. As such, the incentives system needs to be developed around the company’s values.

2. Personalized

An effective incentives system may require a certain level of structure, but it is also important to personalize it for the different individuals in the sales team. An example of a great incentive for attaining a certain benchmark in sales could be a family getaway for rest, relaxation and bonding. It is a great way to appreciate the individual while also communicating that the business appreciates the fact that he/ she has a full life outside the office.

However, if the same incentive of a family vacation is offered to a single man or lady within the company, they are unlikely to feel motivated to put in any additional effort. This is because the package is not suited to their life, and they may feel that the company is taking them for granted and could have done better. They may actually prefer the less elaborate but effective bonus.

When outlining the sales incentives system to candidates therefore, it is important for the recruiter or headhunter, to clearly state the terms of the system: including eligibility criteria, time frame, targets and so on; while also making it clear that the remuneration package is personalized to each sales person.

jimmykHow a Competitive Sales Incentive System can Increase Revenue