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A German luxury car manufacturer1 recorded an 11% rise in unit sales within just under three months by adding incentives to increase sales. The luxury car manufacturer faced difficulty in clearly establishing commission structures within its growing sales team across 33 dealerships. 

To address this challenge, they sought a centralized platform that would simplify sales incentives and create a sense of community among their sales personnel. So, this Fortune 500 company integrated Compass, a sales incentive management software, to improve the efficiency of its sales representatives. What Compass does is provide a central location to deliver a unified program for incentives to increase sales.  

Second, it offers a unified system for distributing incentive payments to salespeople throughout the country. Finally, it allows salespeople to see how much in incentives they have earned. As a result, the German auto manufacturer noticed a 5% increase within 90 days in the number of qualifiers, a 92.8% sales team adoption rate, and a 96.2% adoption rate for the payout program.  

The placement of an incentive program across 33 locations encouraged the sales force to work harder and achieve their targets.  The program not only encouraged salespeople to close more deals by offering rewards for achievement, but it also fostered a sense of loyalty among them.  

The strategies employed by German luxury car manufacturers highlight the importance of well-designed incentive programs in driving sales growth. In fact, an Incentive Research Foundation study2 found that well-designed programs can increase the productivity of sales teams by 18%. These programs also deliver a positive ROI of 112%. Therefore, in this blog, we will explore several sales incentive ideas that you can incorporate to propel your sales team toward achieving success. 

What are the incentives to increase sales? 

Incentives to increase sales refer to rewards offered to salespeople in recognition of their achievements. These rewards can be monetary, such as commissions or bonuses, or non-monetary, such as trips or gifts.  

An Incentive Federation study found that 84% of businesses in the United States invest $176 billion each year in non-cash rewards to motivate and recognize their employees, sales teams, partners, and customers. This underscores the need to implement incentives to increase sales. If integrated well, the sales incentives can: 

  • Motivate salespeople to perform at a higher level.  
  • Help exceed sales goals. 
  • Create a more competitive and results-oriented sales team. 
  • Encourage salespeople to put in extra effort and close more deals. This can lead to increased revenue and market share for the company. 

However, before implementing a sales incentive program, it is essential to understand the various types of sales incentives available. Take this F5 company as an example.  

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An incentive trip in F5 leads to a 64% increase from $171.2 million in fiscal 2004.

F5 is a U.S.-based technology company that specializes in network and application delivery solutions. It has been ranked number 1 among the Fortune Modern Board 25 for two consecutive years, which reflects the organization's strong reputation and performance across various business attributes. 

For a company as extensive as F5, it is a given that it would have a diverse sales force. Approximately, 35% of the sales force was from North America, meanwhile, the rest were located in Australia, Canada, China, France, Germany, Hong Kong, Japan, the U.K., and Korea. This global organization with a worldwide team wanted to engage the whole sales team to reach one common goal, which is to increase sales.

So, they incentivized a Circle of Excellence Award program. The incentive program was designed to recognize and reward the salespeople fairly based on their achievements. Individual goals were established for each participant throughout the program year.

These goals were set at 100%, 105%, or 110% of the annual sales quota. The specific target percentage was determined based on the size of the individual's quota: a 100% goal was assigned to those with very high quotas, 105% for mid-sized quotas, and 110% for quotas considered low.

For anyone participating, and qualifying the deal, they designed an incentive trip. F5 selected Aruba as the location for their 2005 award trip to inspire their multicultural group of employees. The five-day trip provided attendees with a variety of hosted activities, such as golf, snorkeling, horseback riding, windsurfing, and spa relaxation.

In keeping with F5's tradition of exceptional incentive trips, Club FY05 Aruba offered a unique and unforgettable experience that included both individual leisure time and memorable group events designed to foster teamwork.

As a result, F5 noticed, 

- Revenue growth. F5's total revenue in fiscal 2005 experienced significant growth as it reached $281.4 million.
- This represents a 64% increase from $171.2 million in fiscal 2004. 
- The company's record fourth-quarter revenue of $80.6 million contributed to this positive financial performance. 
- There was an increase in the number of participants eligible for the Aruba incentive trip compared to 2004. 
- Out of those eligible, 46% qualified for the trip. 

Types of sales incentives to increase sales: 

There are different types of incentives to increase sales process effects.  

1.  Role-specific sales incentives: These rewards are specifically tailored to motivate salespeople based on their unique contributions to the sales process. This targeted approach ensures each salesperson is recognized for their strengths and motivated to excel in their specific role. 

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For instance, closers exceeding their quota might be rewarded with a bonus commission, while prospective reps could receive incentives for generating a high volume of qualified leads. 

2. Split sales incentives: When a complex sale requires collaboration between different sales roles split incentives come into play. These rewards are distributed among team members who contribute to the sale in a collaborative environment. 

In fact, 81% of sales representatives report that collaborating with teammates is beneficial as it helps them close more deals. This ensures everyone involved feels valued for their role and motivates them to work together seamlessly for a successful outcome.

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For instance, a sales incentive program can be implemented to encourage collaboration between salespeople in different regions. This program could offer double the usual reward for sales secured through teamwork between two representatives.

In such cases, the revenue generated from the sales would be credited equally towards each salesperson's quota, regardless of the specific contributions made by each individual during the sales process.

3. Presales incentives: Presales incentives are motivational rewards designed to keep valuable team members engaged and invested in the overall sales journey. To maintain motivation within the sales force during extended periods of the sales journey, a staged compensation plan is beneficial. This approach should incentivize both short-term wins and long-term commitment.  

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For instance, one approach involves assigning salespeople a mix of deals with varying sales cycles. This ensures a stream of short-term rewards from accounts with quicker closing times, while also pursuing long-term opportunities.

4. Omnichannel sales incentives: Omnichannel sales incentives encourage the use of a variety of sales channels, including online platforms, social media engagement, and effective email marketing campaigns, alongside in-person meetings. By rewarding salespeople for effectively utilizing these diverse channels, you can expand your reach, cater to different customer preferences, and ultimately drive sales growth. 

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For instance, if a sales representative is credited with a referral from the customer saying they helped them get to know and use the product, then their performance is to be recognized. This will contribute to their sales goals. Additionally, customer data can be linked online and traditional purchases to prior digital interactions.

Also, if a customer attended a sales webinar and later made a purchase, then that credit would go to the staff member who led the webinar. This comprehensive approach ensures that all staff who contribute to customer acquisition are acknowledged for their efforts.

5. Analytics-based sales incentives: Looking beyond just closing deals, analytics-based sales incentives focus on rewarding salespeople for achieving results based on data-driven metrics.  

This could include exceeding goals for upselling or cross-selling related products or achieving high customer satisfaction scores.  By emphasizing these metrics, you can encourage well-rounded sales practices that prioritize customer needs and long-term relationships alongside generating sales.   

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For instance, a large shipping company utilized machine learning to analyze data on international currency exchange rates and import-export trends.

This approach led to a significant improvement in their forecasting accuracy, exceeding 15%. Now that we have checked the different types of sales incentives, let us share with you 11 unique sales incentive ideas. 

11 unique ideas of sales incentives to increase sales: 

Here are 11 unique sales incentives designed to boost sales performance: 

A. Monetary incentives 

1. Commission-based incentives: Commission-based incentives are structured compensation plans where a portion of an individual's earnings are directly tied to the sales revenue they generate. However, it's essential to balance base salary and commission rates to ensure fair compensation. 

2. Performance-based bonuses: Performance-based bonuses are discretionary payments awarded to employees who meet or exceed predetermined performance objectives. These bonuses serve as a tangible reward for exceptional contributions. These can be structured as one-time payouts or accrued overtime. They offer a tangible reward for exceeding sales targets. 

3. Sales contests with cash prizes: Sales contests with cash prizes are competitive initiatives that motivate sales teams by offering monetary rewards to top performers within a specified timeframe. It creates a competitive environment that can boost sales temporarily. However, the impact may diminish over time if not complemented by other incentives. 

4. Tiered performance bonuses: Tiered performance bonuses are compensation structures that offer increasing bonus amounts based on the attainment of progressively higher performance levels, providing additional motivation for exceptional results. Offering this type of incentive can put sales representatives at higher performance levels. It can create a strong incentive to push beyond initial goals. 

5. Profit sharing: Profit sharing is a compensation system where employees receive a portion of the company's profits, aligning their interests with the overall financial success of the organization. It aligns the sales force’s interests with company success, which leads to a sense of ownership and drives performance. 

6. Stock options: Stock options give employees the right to purchase company shares at a predetermined price and provide an opportunity to share in the company's growth and equity. This long-term incentive can be particularly effective in creating a sense of ownership and encouraging employee commitment to the company's success. 

7. Incentive travel: Motivate high performance with travel vouchers that allow salespeople to choose their desired destination to create a personalized and exciting reward. 

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Trips and travel are used as incentives more frequently in sales incentive programs compared to the other program categories. In fact, another IRF study reported a growth of 61% in travel programs compared to pre-pandemic levels in 2019. 

8. Month-end competitions: Month-end competitions are time-bound challenges designed to stimulate immediate sales activity and create a sense of urgency among the sales team. These competitions often focus on specific product lines or sales targets. Short-term competition can energize the sales team and drive immediate results. 

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Aberdeen Research indicates that companies offering non-cash incentives see a 3X increase in revenue growth compared to those that do not.

 

B. Non-Monetary Incentives 

1. Performance-based recognition awards: Performance-based recognition awards are non-monetary honors or prizes given to employees in acknowledgment of their outstanding achievements and contributions to the organization's success. Public acknowledgment of achievements can be highly motivating and boost morale. 

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An Incentive Federation study has shared that across all incentive programs, award points are the second most popular option in three out of the four program types. 

2. Quarterly or annual sales awards: Quarterly or annual sales awards are formal programs that recognize and reward top-performing sales individuals or teams regularly. It helps foster a culture of achievement and excellence and keeps them motivated throughout the year. 

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The study also found that 92% of companies with at least $5 million in revenue use some type of non-cash incentive program. 

3. Sales training and development opportunities: Sales training and development opportunities are educational programs designed to enhance the skills, knowledge, and abilities of sales professionals, thereby increasing their effectiveness and productivity. Investing in employee growth not only enhances their skills but also demonstrates the company's commitment to their success.  

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According to a Gitnux report, sales coaching can increase the win rate by 29%.

Both monetary and non-monetary rewards can encourage better performance and growth. However, it is important to carefully manage these incentives to achieve the best results. 

What are the incentive management strategies? 

A few incentive management strategies that could spearhead your sales team to success are as follows: 

Pay incentives on time: Ensure timely payouts to maintain trust and credibility. Moreover, increasing the frequency of incentive payouts can serve as a motivator to sales reps. As a result, it can reinforce desired behaviors and sustain employee engagement.

Fair incentives and accomplishable goals: Set clear, and achievable targets to drive employee satisfaction and performance. 

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An IRF study has shown that younger individuals, between the ages of 18 and 30, and those with higher incomes tend to favor group travel incentives more than others. Moreover, people who have previously participated in a group travel reward program are significantly more likely to choose it again as a preferred reward. 

Enable them with the right tools and processes: Equip your sales representatives with the necessary tools and resources to maximize the effectiveness of the incentive program.  

Timely coaching of the sales team: Regular feedback and support can help salespeople improve their performance and reach their goals. Provide the sales team with the sales enablement content and give them coaching on the process to improve their performance and achieve their targets. 

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Gitnux report has revealed that 84% of sales training is forgotten within three months of training. It underscores the importance of having an effective training program in place. In fact, the report also revealed that organizations with dynamic and agile coaching programs can attain 28% higher win rates. 

Let’s examine how a well-known American Fortune 500 computer manufacturer used high-end gifts as an incentive, with strategies to increase sales. 

A U.S based Fortune 500 computer manufacturing company records 25% increase in sales with luxurious incentives 

It is a given that an industry such as manufacturing would be saturated enough to have any organization seek significant strategies to outgrow the competition. This prominent U.S.-based Fortune 500 organization specializing in computer manufacturing faced something similar. 

The rigorous, complex, and competitive market demanded greater effort from the salesperson. This created a need for more engagement and motivation among the sales force. Several factors challenged the company during this period of strategic realignment. There were:  

  • Aggressive price competition,  
  • Tighter customer budgets,  
  • Faster product development cycles,  
  • A surge in foreign competitors.  

Customers postponed long-term investments and computer purchases. Even seasoned salespeople found the selling environment increasingly challenging. Competitors actively recruited the company's most successful sales personnel, and high employee turnover in this group would significantly weaken the company's marketing capabilities. What this company needed was a strong incentive program to meet its three different requirements.  

  • Increase sales, 
  • Increase the customer base, 
  • Maintain total SG&A expenses at not more than 26% of projected sales.  

The Fortune 500 organization conducted a thorough examination of internal as well as external factors that had an impact on the company's operations. The internal analysis revealed that a larger-than-expected share of the increased sales came from the company's top performers. These high achievers typically reached their sales targets early and became less motivated to sell throughout the remaining program period.  

The external analysis revealed that the company would continue to face competition from new entrants in foreign markets. The job market, particularly in the US, was experiencing significant pressure as companies offered stock options, cash bonuses, and cars to attract qualified employees. 

So as a solution, the company integrated an award program. The awards were chosen based on the characteristics of both typical salespeople (Target Sales Representatives) and top performers. These characteristics included financial considerations and the types of rewards that would be most appealing to each group.  

To motivate this highly competitive group of achievers, a luxurious cruise was offered as the top incentive. While everyone had the chance to earn other awards and incentives, only a select few could qualify for the exclusive cruise. However, to maintain fairness across the whole sale process, the organization implemented a structured set of rules. The rules rewarded behaviors that led to: 

  • A favorable ratio of sales calls made to sales closed. 
  • Acquisition of new customers. 
  • Exceeding established sales targets. 
  • Individual salespeople reduce their sales-related expense budgets. 

As a result of this extensive research, strategical approach, and rule-based implementation, the Fortune 500 company noticed: 

  • Their sales exceeded projections by 10% and they achieved a final increase of 25%. 
  • Expansion of its customer base by 35%. 
  • The management effectively controlled SG&A expenses and kept them 6% below projections. 

The case study stands as an example of how unique incentives can help you boost your sales. 

استنتاج 

Offering rewards to encourage salespeople to sell more can increase the company's overall income. These incentives can not only improve employee satisfaction and reduce turnover but also motivate salespeople to engage in behaviors that lead to more sales. We recommend using Compass, a software program designed to manage sales incentives. Compass automates and simplifies the process of creating and running sales incentive programs. By using Compass, you can  

  • Easily handle accelerators, tiers, and workflow triggers in a few simple clicks, 
  • Make adjustments and overrides to incentive calculations on the go, 
  • Give sales reps real-time visibility into their performance, commission information, and payouts, 
  • Create data visualizations by adding filters and identify trends by region, teams, and programs. 

So, uplift sales team performance by automating the sales gamification process. Schedule a demo call with our specialists to find out how our solution can be the answer to your issues. 

الاقتباسات 

  1. A German luxury auto brand improves their top-line sales - compass. (n.d.). https://www.getcompass.ai/case-study/a-german-luxury-auto-brand-improves-their-top-line-sales 
  2. Incentive Research Foundation. (2022, July 18). Measuring the ROI of Sales Incentive Programs - Incentive Research Foundation. https://theirf.org/research_post/measuring-the-roi-of-sales-incentive-programs/ 
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