Sales Incentive Programs

A strange pattern hovers over incentive/motivation programs. When economic times are good, companies launch incentive programs to reward high achievers. These programs create a positive energy that encourages competition, team play, and results.

During economic slumps, these same companies quickly disassemble their incentive programs and re-evaluate the costs. Budgets once approved without hesitation are eliminated or severely reduced.

Why?

Company executives know incentive programs can motivate their reps or dealers. Recent research shows that properly designed incentive programs are consistently successful. The research data indicate that when salary or other incentives are not working, properly designed prize and monetary incentive programs can increase performance by up to 44%.

A big difference exists between believers in incentive programs – frequent users -- and non-believers. One study showed that infrequent users of non-monetary awards programs claimed they didn’t have the time to implement and sponsor such programs. Curiously, frequent users surveyed in the same study cited time as a top rationale for using incentive programs because so little time was needed to spike employee performance. In short, attitude counts.

Avoid the “set in concrete” mentality: Incentives for one group of employees may not work for others. Sales people and dealers are sales motivated; non-sales employees may not be. And some sales people are so successful that cash incentives are, well, not all that motivating. Then there is the “trophy effect.” The majority of respondents to one recent study indicated that travel and merchandise awards are remembered longer than cash awards, and that cash awards actually are remembered for the shortest time. Likewise, another study indicates some qualifiers don’t want to brag about the big check they got. However, they are eager to display trophy awards for colleagues to see or they can easily be prompted to recall highlights of an incentive trip.

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