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What You Need To Know To Make A Sales Reward Program Work
A sales reward program can be effective if you understand the principles behind it and behind the factors that influence sales in general. Do you target all your employees or could it be better to just target some for increased sales numbers? How complicated should a sales reward program be? Finally, is competition helpful or counterproductive when employees have to compete for incentives? All these answers shed light on how to make a sales reward program work.
The 80-20 Rule Of Sales
This commonly held belief states that 80% of the sales that are made are actually secured by only 20% of the sales force. So what does this mean? This means that maybe it is not the best idea to target your entire sales force with an incentive campaign. A portion of your sales force is likely to already be highly motivated and functioning efficiently and effectively.
A less expensive way to improve sales is to avoid the route of trying to gear incentive programs toward the entire sales force and instead aiming for the next 20% of salespeople. The top 20% are already highly motivated, but the next 20% have room for improvement while not being too far off from being exceptional.
Simple And Visible
Incentive programs have to be visible. Everyone has to be aware that they exist, and everyone has to be able to understand the criteria by which the recipients of the incentives are awarded these incentives. The more complicated the criteria are the less employees will be motivated by the incentives. The criteria should be simple and easy to track.
In fact, tracking progress publicly can often increase motivation because it inspires an air of healthy competition. Everyone will be aware at all times of how well they are doing and who else might be doing better. This level of recognition is a powerful motivator.
By showcasing the top performers at all times, employees have the chance to see how their performance measures up. They can see how their work is advancing them in the running for rewards.
Fast Rewards
Rewards need to follow the reaching of a particular goal immediately. If you have a gap in time between when a goal is reached and a sales reward is received then the association between the accomplishment and the reward begins to fade.
As soon as someone reaches the goal that has been set up with an incentive that incentive must be delivered. Waiting to deliver the reward actually serves to diminish motivation because the expected reward is not received promptly. As soon as an employee wins an incentive it should be in their hands.
Making a sales reward work is a matter of understanding the principles behind both sales and motivation. You need to realize that it might not be the best idea to target the entire workforce, that criteria for rewards must be simple, and that the winner should get their prize immediately after they reach their goal.
