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Incentive Programs

5 Ways to Develop Effective Incentive Programs for Sales

A well-established sales plan can be the difference between an underperforming sales force and the company meeting all the targets set out at the start of the year. Thus, it is important to devise sales incentive programs which allow the company to grow by rewarding and recognizing the efforts of its sales force. Here are five ways to make sure that your sales plan is an effective one:

1. Establish Strategic Goals and Objectives

The first and most important thing to do is develop a practical yet achievable sales target for your sales force as a whole, one which falls in line with the strategic goals and objectives set by the company. By creating and maintaining relevance between the sales targets and the company’s goals, you will be able to make sure that the operations performed are justified with the highest Rate of Return (ROR) for each dollar compensated to each member of your sales force. Apart from that, it will also serve as a guideline for your employees to follow, allowing them to know what is exactly required in order for them to receive benefits from your incentive program.

2. Performance Metrics

Since the performance of every employee of the company is reviewed on the basis of the work they put in, they need to be analyzed in a way that is uniform and eliminates biases from the evaluation process. Thus, they should be analyzed on different aspects of their performance, such as the monetary amount of the sales they achieved, number of sales closed, whether they achieved the sales quota or not, etc.

3. Compensation and Rewards

The time of appraisals is one of the most hotly anticipated events by every employee of any company at the end of the year. It is the time when individuals are rewarded for their good performance during the past year in terms of a promotion, cash increment in their salary package, or bonuses if they were able to meet the targets set in the company’s incentive program.

That said, sales people should get compensated in a different manner as compared to employees working in other departments of the same company. They are offered a basic salary every month along with a certain percentage of the sales they make as commission and bonuses which are offered on a quarterly, biannual, or annual basis, depending on the company’s policies.

4. Recognition

Not all employees are motivated by monetary rewards alone. They also demand recognition for the effort they put in on a daily basis which has helped them become an important member of the company. Not a lot of companies recognize this and have a less motivated workforce or lose out on top talent altogether as a result of this.

Thus, when developing sales incentive programs, it is always better to ask the employees for their feedback regarding the plan put in place by the company. Maybe they want to be rewarded with a unique reward (i.e. movie tickets, discount vouchers, etc.). So, if it is manageable and practical for the company to reward them with what they want, it could serve as the best form of motivation to keep them happy and at the company for years to come.

5. Communicate the Plan

Communication is the key to achieve objectives and inform your employees of certain things they should know. Likewise, if they don’t know how the company rewards their sales force for its performance, they won’t have the drive to achieve the set criteria needed to be rewarded. So, it is important for the company to emphasize on this aspect and clearly detail the way in which an employee can become entitled for a handsome amount as a bonus at the end of the year.

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