Sales Compensation Incentives

Written by Jeremy Horelick
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It's crucial that sales managers understand that compensation incentives alone will not make or break a sales force's performance. While incentive programs can grab a team's attention, that doesn't necessarily mean that a poor office-wide performance can be tied to a subpar contest or game. Sometimes it's communication difficulties or poor staff organization that's to blame.

What happens if you present a lucrative sales incentive such as a big cash prize or a fantastic vacation and your team still underachieves? You may be using the wrong form of compensation, but you may have a more deeply rooted problem as well. No single prize will rescue a sales force from low morale that springs from repeated rejection or poor sales technique. If anything, a great prize can only compound the frustration.

Getting at the Roots

Forget for a moment your compensation program and focus instead on your sales materials. Are you pushing a technique that's been obviated by the latest technology? Perhaps your staff feels beaten because your closest competitor has unleashed a better lead-generation program that's relegated you to the margins. What's needed is not better incentives for your staff but better sales techniques and, perhaps, new leadership.

An overly competitive office is yet another culprit when it comes to poor sales results. Your sagging revenues may be more a function of in-fighting than of undermotivation. For an office manager or sales force leader the trick becomes keeping the competitive spirit friendly, not antagonistic or downright malicious. In the end, while each rep is accountable for his or her own results, it's all the reps' performances, taken together, that determine the company's success.

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Great article- something to add.

Since February I have been advising my clients to review their comp plans and see where they can increase non-cash incentives. This tends to build have an interesting synergy in the comp plan.