How to Create Effective Sales Incentive Plan

Benefits and Potential Drawbacks of Incentives

A good incentive’s main benefit is that of increased motivation and productivity. The incentive will reach everyone, no matter their skill level, and motivate them to push a little harder and reach a little further. Incentives can also create healthy competition while also fostering an environment of teamwork and collaboration.

However, if an incentive is done poorly, it can alienate certain employees who don’t feel recognized or valued. Ineffective incentives can also breed unhealthy competition, which cuts down feelings of trust and collaboration. And, simply put, bad incentives will do the exact opposite of motivating your sales teams.

Let’s look at five different types of sales incentives and see how each one can avoid these potential pitfalls.

You can use different incentives to most effectively motivate different types of people and different types of sales teams. Five commonly used types of incentive are below:

• Role-specific incentives
• Presale incentives
• Split incentives
• Omnichannel incentives
• Analytics-based incentives

Let’s look into each of those a little more deeply.

1. Role-Specific Incentives

Each team is made up of different people who work at different paces and handle different responsibilities. That’s why you should never use a blanket incentive that holds every salesperson to the same standard. With a role-specific incentive, you structure the incentive to fit around different roles.

One way to do this is by creating separate incentives for people who focus on parts of the sales cycle. For example, incentives for prospecting and incentives for closing deals should be structured differently.

Another way to split up this type of incentive is by how much work each person produces. For example, a salesperson who always goes above and beyond shouldn’t have a low ceiling, while a salesperson who contents themselves with average numbers shouldn’t be pressured to hit goals way above their comfort zone. Create a tiered incentive that keeps the overachiever motivated throughout each quarter without making the average performer feel hopeless.

2. Presale Incentives

Some products take a lot longer to go down the sales pipeline than others, and if you only reward closing numbers, the salespeople who work hard during the presale process aren’t going to feel valued.

Create an incentive around the important touchpoints that happen between prospecting and closing, especially for sales cycles that take a long time. Incentivize your people to take great care of each prospect, no matter where they are in the sales cycle, by showing them that you value their early contributions, even if no sale has happened yet.

These incremental goals are a great way to keep motivation up, regardless of the time frame.

3. Split Incentives

These incentives are great for when a group of people are working toward the same goal. For example, teams that work the same territory or teams that focus on handling a complex product sale.

Split incentives can be broken down so that each team member gets a portion of the incentive reward equal to whatever distribution you deem to be fair. These types of incentives are great for getting underperformers to put in a little more effort so that the entire team can succeed.

4. Omnichannel Incentives

In today’s technology-heavy society, prospects and customers will find your product through a variety of ways. Whether they interact with someone on social media, respond to an email, or use the chatbot on your website, these different channels are all important to your sales strategy.

These types of incentives reward salespeople who work digital channels to close sales. You can ensure that each channel is rewarded equally and that each salesperson working these channels doesn’t go overlooked.

5. Analytics-Based Incentives

Analytics are great for helping you see and analyze sales rep behavior on a more granular scale. For example, you can use analytics to see how many meetings each salesperson sets per day or how long it takes each rep to close a deal.

With these analytics in hand, you can set personalized incentives for each salesperson according to their production.

Have you noticed a theme throughout the guide so far? You’ve probably seen a lot of talk about making sure everyone feels included, and not leaving anyone out. That’s because good incentives encompass every sales rep on your teams. But how do you really make sure that happens?

How Can You Motivate Different Types of Salespeople?

A good incentive’s main benefit is that of increased motivation and productivity. The incentive will reach everyone, no matter their skill level, and motivate them to push a little harder and reach a little further. Incentives can also create healthy competition while also fostering an environment of teamwork and collaboration.

1. The Closers

Closers are the salespeople you may see parodied in commercials or movies. They work extremely hard and are 100% focused on hearing the word “yes” from the prospect. These salespeople don’t take no for an answer, and they love breaking their own sales records each month.

How to Motivate Them?

Standard incentive plans work well for these types of salespeople, as long as the plans are robust enough to continue to reward them even after they’ve reached quota or surpassed their goals. Public recognition, cash, or vacations are good reward options.

2. The Empaths

These salespeople focus more on building relationships than on closing deals (though this focus certainly helps them close a lot of deals). They’re willing to take extra time out of their day to help prospects and clients solve an issue, and they’re great at building trust.

How to Motivate Them?

These types of salespeople want to see that you value trust as much as they do. Set up incentives that reward them for less-noticable numbers than total closes. Goals like problems solved or time on the phone are great for them because it lets you reward them for their efforts, even if the results aren’t as measurable as a closed deal.

3. The Caretakers

These salespeople show up every day and work in a slow and steady way. They’re happy with where they’re at and the clients they have. These people may not exceed expectations very often, but they reliably get the job done. You may have a larger number of this type on your team than any other.

How to Motivate Them?

A tiered incentive plan works great for these types of salespeople. Have the lower tiers be relatively easy to achieve for those who don't want to push themselves much harder than usual. At the same time, include a few higher tiers with loftier goals to motivate those who want to achieve more.

4. The Professionals

These types of salespeople don’t look at sales as a job—they study it like a science. Sales is a way of life for them. They use knowledge from sales books and competitive research to analyze problems and come up with solutions.

How to Motivate Them?

Similarly to the Closers, this type of salesperson can respond favorably to traditional recognition and rewards. They work hard, and they should be rewarded for all that they do. Because they can get trapped in an unwavering routine, however, rewards such as professional development opportunities may be especially effective.

What if a teammate is struggling?

Every sales team also has those who struggle to hit their numbers or reach sales goals. You shouldn’t forget about them. Lower incentive goals can help these types of sellers achieve a sense of accomplishment for hitting those goals. That can build motivation and confidence which will, hopefully, help them be more consistently productive.

What Rewards Work the Best?

You know the different types of sales incentives you can use, and you know which types work best for which salesperson. But you may still be unsure which rewards to offer. Is cash always the best option? Or should you go with non-monetary rewards? Trips? Exercise equipment? Free food? The options seem endless!

Many leaders overlook this crucial detail when building out incentive programs. They spend hours creating a complicated, rewarding tier system that they think will motivate every salesperson on their team, but when the incentive starts, productivity doesn’t go up that much. The reason for that is the reward isn’t something that your people will want.

So how can you offer rewards that will really get your sales teams excited? Here are a few suggestions:

• Ask people what they want. This one is deceptively simple. Whether you ask the whole team to agree on a reward or ask every person for a personalized incentive reward, this is a great way to ensure everyone is motivated to exceed their goals. And as long as you put a cap on the reward value, this won’t break your budget.
• Provide points for them to use. Points are a great incentive reward because the salespeople can use their points for whatever they want. And these points are different from cash because they can’t be used for bills or rent payments. That way, the incentive reward is more special.
• Offer different options. This isn’t as effective as offering each person a personalized reward, but it’s still a good step in the right direction. Instead of offering one big prize that everyone aims for, give salespeople different reward options to choose from. Include rewards that fit a wide variety of interests so the chances of everyone being excited about a reward are higher.

The goal of any sales incentive is to motivate salespeople to push themselves to go above and beyond their regular work. The only way an incentive will accomplish that goal is if salespeople actually want the reward tied to it.

Cash Vs. Tangible Items

Both money and non-monetary rewards can be extremely effective for most types of salespeople. However, cash is one-dimensional and can be combined with a paycheck in the minds of the winner, which makes it less special.

Non-monetary rewards, such as tech gadgets, trips, subscriptions, or food are more customizable and creative, which allows you to reach more members of your sales team more easily. Our suggestion is to include both and (once again) let your team members choose what they want.

What Are Some Examples of Incentives?

We all know that examples are helpful, so below are some examples of sales incentives you can use as inspiration for your own team. Remember, you shouldn’t copy these examples exactly—customize your incentives to fit the individuals on your team to get the best results possible.

Activities as Incentives

When you reward employees with an experience, they will make the connection between a fond memory and hard work. Activities such as the following are some ideas:

• Airplane tickets or paid travel expenses
• Tickets to theme parks, concerts, or festivals
• Sports tickets
• Spa treatments
• Museum or art gallery tickets
• Outdoor excursion opportunities (camping, boating, bungy jumping, skydiving, etc.)
• Escape room tickets
  

Subscriptions as Incentives

Subscription rewards are the rewards that keep on giving. When a salesperson wins a year’s worth of their favorite subscription, they’ll feel gratitude for that entire year. Here are some examples:

• Entertainment subscriptions such as Netflix or Spotify
• Personal growth subscriptions such as Adobe Creative Cloud or Masterclass
• Personal care subscriptions such as TheraBox or Dollar Shave Club
• Interest subscriptions such as Home Chef or Stitch Fix
  

Physical Items as Incentives

Prizes are the age-old way to reward effort, and they’re still effective today. As long as you make sure the items are ones that people will want, you’ll be surprised at how excited your teams can get during your incentives:

• Tech gadgets such as headphones, smart watches, or computer equipment
• Gaming equipment such as video games or board games
• Food-centric rewards such as food delivery credit or a gift card to a restaurant
• Care packages filled with personalized rewards for the winner to enjoy
• Office equipment such as an ergonomic office chair or a desk treadmill
• Exercise or sport equipment such as weights or golf clubs
  

Intangible Items as Incentives

Not everything you give out has to be physically there to be rewarding. Here are a few examples of intangible rewards:

• Extra PTO
• Public recognition in front of the company
• Donations to a meaningful cause of the winner’s choice
• Online learning opportunities

No matter what you decide to do for your sales incentive, the main thing you need to focus on is crafting an incentive program that motivates everyone on your team. That includes customizing the program to reach both overachievers and underachievers, and it also includes choosing rewards that will motivate everyone, not just the vocal minority.

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