How Entrepreneurs Used to Reward Their Staff

In the offline world, business owners and top managers could not access the numerous and elaborate characteristics that they rely on today. The primary criteria that they used to identify whether a specialist deserves a bonus or not was the experience of that employee.

When a newer staff member joined the company, their supervisors explained to them how many units of goods or services they were expected to sell daily, weekly, monthly and annually. These metrics were very predictable and easy to measure. Salespeople needed to build customer relationships and get to know the needs and demands of their audience. They did not need to concentrate on customer experience or analyze the impact of the competition on the decision-making process.

In such an environment, organizations tended to standardize KPIs and forecast their achievements rather straightforwardly. A typical sales incentives program would not take into consideration those factors that the company could not influence, such as location strength. Consequently, sales incentives rarely reflected the true success rate of the staff and were randomized to a great extent.

Today, companies take behavioral performance into account too. They invest large funds and efforts into investigating such aspects of their business. Sales incentive ideas have evolved accordingly.

The Characteristic Traits of a Modern Sales Incentive Program

By the 2020s, clients have learned to research goods and services themselves. They do not want to spend too much time listening to how the sales representative explains to them the advantages of a particular product. Instead, they turn to the commercial manager at a late phase of the purchasing process, to ask additional questions and get to know the final details.

Today, salespeople can treat publicly available information as a rival. They need to adjust their tactics to it. Social selling has proved to be highly efficient. This tactic suggests that the specialist should approach the client on social media and precisely detect the moment when the customer will be likely to buy the product.

Clients prefer to interact with commercial managers who meet the following criteria:

●      Are trustworthy

●      Know how to listen and understand their interlocutors

●      Are good at interpreting other people's needs and preferences

It is not unusual that a client wants to talk to several representatives of the organization before making a purchase. They are interested not only in the goods or services but also in the company itself. Communication with several employees enables them to build trust with the brand.

To detect an optimal success rate, salespeople need to rely both on their individual techniques and team collaborations. When assessing the performance of a team, it is vital to realize the objective strong, and weak points of each team member. Once the team has reached the results, personalized sales incentives should be distributed among its members. It would be unfair to divide the reward into equal parts and distribute it among the team regardless of the role of each individual.

A sales incentives program should take into account the following factors:

●      Sales methodology

●      KPIs

●      Targets

●      Objectives

Its mission consists of motivating the managers to sell more and close more deals, increasing both your revenue and theirs.

Five Efficient Sales Incentive Schemes

Thinking strategically, incentives add value to your organization and help it withstand fierce competition. They contribute to shaping a productive work environment, promote positive working practices, and enhance the corporate culture. All the schemes that you apply should trigger an emotional response among your team members and inspire them to a more impressive performance.

Role-Specific Rewards

An ideal incentive program should encourage your employees to use their talents to the max. When building the rewards strategy, you need to take into account the individual skills and competencies of each specialist.

For instance, in many teams, there is always be a genius who manages to close many more deals in a month than anyone else. It would be unfair to reward this competent staff member every time because that would demotivate their colleagues.

Instead, you might want to employ a multi-level rewards scheme. Once a salesperson reaches a new milestone, they get a prize. The more milestones they achieve, the more generous the incentive. Such an approach enables you to set realistic objectives for each team member. Knowing there are no limits to their rewards, they will be more committed to improving their performance.

Split Rewards

If your goods or services are rather complex, several professionals might need to join efforts to sell them. For example, companies that build cutting-edge solutions for remote medical assistance cannot rely exclusively on their front-line salespeople. Their customers will probably want to talk with engineers who can share profound technical knowledge with them. Also, they might be eager to ask complicated questions about certain medical indicators and health-related issues. So in fact, a whole team will need to take part in the sales process. All of its members will deserve a reward for closing the deal.

Alternatively, you can assign several commercial managers with the same bulky task. Even though their roles will be identical, their contribution to the ultimate success might be different. One manager might spend more time on building customer relationships, while the other might prioritize closing the deal.

Before applying the split rewards approach, you should explain to your staff how it functions. They need to know in advance whether you are planning to distribute the reward in equal proportions among all the members of the team or adjust it to the personal achievements of each of them. People will be happy with the reward only if they believe it was distributed fairly. Fairness in this case is synonymous with transparency and a good understanding of the mechanism of the incentives.

Presales Rewards

The competition is fierce today in almost all industries and products tend to become more and more complex. Consequently, sales cycles become longer and might last up to one year or even more. During all this time, sales representatives need to stay in touch with their clients and invest a lot of effort in motivating them to purchase.

Sales managers need to understand their customers' behavior very well. They should realize that consumers are comparing the offerings of several companies, checking people's reviews about the product, and selecting among the different offerings of the same good or service.

In such circumstances, you should keep your specialists motivated. They should realize that they are doing meaningful work and even if they do not close the deal right now, they are taking small important steps every day.

Omnichannel Rewards

During a sales cycle, clients can interact both with live specialists and digital assistants. Artificial intelligence might be brilliant at certain tasks but it lacks the ability to read emotions. Customers might prefer human managers to chatbots because they can do the following:

●      Show empathy

●      Detect pain points

●      Build long-term relationships

Human specialists should not treat digital assistants as their rivals. They need to realize that AI saves them from the most tedious tasks and enables them to focus on more challenging and better-rewarded achievements.

The reward of a live professional should be proportional to their contribution to the overall success of the deal. For instance, a client might engage in a dialogue with a chatbot first and switch to the human manager at the final phase, to ask the last questions. In this case, it would be unfair to say that the chatbot did the most important part of the job because it spent more time talking to the client. It was the live manager who closed the deal and they deserve a prize for that.

Approach Based on Analytics

Sometimes business owners find it tricky to design a sustainable reward program because the sales process is too complicated. It might involve too many scenarios or too many aspects of it might be hard to measure. Consequently, it becomes impossible to set realistic quotas and targets.

Big data analytics should become the best way out. AI will build a predictive model for customer demand based on the analysis of past data sets. Over time, such systems become more powerful and make more precise forecasts. The rewards programs that they can offer might rely both on value-driving behavior and feasible metrics.

For instance, AI can assess the contribution of a manager who pushed the deal further through the pipeline. After that, the business owner will know that this set of actions leads to better sales. They will employ a rewards system that would encourage such behavior.

Sometimes it might be wiser to reward professionals not for the number of deals that they closed but for how they managed to do it. To standardize your sales process, you might want to shift your focus from quantity to quality. However, mind that it would be difficult to accurately analyze information without a smart AI and large databases that you can feed it.

Inspiration for Sales Incentives

All the rewards belong either to the cash or non-cash category. Both have their pros and cons and both can be very efficient if you know how to apply them.

When deciding on an incentive, think about these factors:

●      Which part of the income do your employees receive as a salary and which part as a bonus?

●      Which incentives should they receive for their individual achievements and which ones for the success of the whole team?

58% of professionals admit that they feel more engaged after receiving recognition for the work they do. A happy staffer is a specialist who is heard, valued and appreciated.

When introducing a sales incentives strategy, set realistic goals for your team. If you opt for a multi-level scheme, its first level should be relatively easy to reach. A strategy that makes specialists overstrain for scanty rewards would only demotivate them.

Cash Is Always Welcomed

Cash might be the most trivial type of incentive yet it never goes out of fashion. A variable part of the monthly salary cannot be regarded as a reward. Bonuses should be distributed once or several times per year.

Salespeople deserve a reward because they need to take care of administrative tasks that go beyond their immediate duties:

Updating clients' data

●      Prospecting

●      Cold calling

●      Qualifying the leads

●      Keeping the pipeline organized

You should not be too picky when measuring the results of these activities. The very fact that your team members carry out these tasks deserves praise.

However, goals can be taken into account if your commission scheme suggests it. For instance, when a commercial manager closes the deal, you might pay them a certain percentage of the deals' price. If they close a certain number of deals in a certain period, they get a fixed amount of cash on top.

This type of bonus should be paid according to a predetermined schedule. If some clients have not fulfilled their invoices yet, you should not make the manager wait for the paycheck. Waiting demotivates professionals, while immediate rewards are among the best methods of boosting their enthusiasm.

Avoid setting maximum limits for the rewards. Otherwise, your team member might work hard only until they hit the quota. If you want them to steadily outperform themselves, do not cap their income. Some business owners are afraid that they would need to sacrifice a considerable part of their own revenues after employing such a scheme. These risks should be calculated before implementing the sales incentives program.

Do Not Focus Exclusively on Cash

Flexibility and freedom: these are the two biggest merits of non-cash bonuses. They enable organizations to reinforce company culture better than any monetary payouts. When staff members can have fun together in an unusual environment, it strengthens their emotional bonds with the company.

By the 2020s, approximately 80% of US businesses were using non-cash sales incentives. Three decades ago, this indicator equalled just 25%.

Non-cash bonuses promote social interaction. People can discuss them with their colleagues, friends and family members. When using such an incentive, they will experience vivid emotions, take photos and videos.

This type of reward often works wonders for teams. When the business owner invites their employees to something they have never tried before, it is one of the best ways to show appreciation of the staff's professionalism. It would be nice to get creative and invent something truly unusual and memorable.

Below, you can find a list of the rewards that your employees will definitely be happy to get:

●      Gadgets. Would anyone mind receiving the latest smartphone, a cutting-edge laptop, or cool noise-cancelling headphones? This is probably the most universal kind of present. To select it, you do not even need to know your staff well.

●      Gift cards. When selecting a card, you can rely either on the individual preferences of your team members or your industry. Personalized gift cards make people much happier than the ones that they could have received from anyone else. For instance, owners of nearly any business could distribute gift cards for a spa among their employees. Yet if people work in, let's say, food manufacturing, such a reward will not be connected with their everyday activities. Your staffers might get the impression that you were too busy to select a personalized gift for them. But if you manufacture or sell beauty products, such a reward would be spot-on.

●      Tickets. This is one of the most personal types of gifts. You should know the tastes of your team really well to invite them to a music concert, art exhibition or sports match.

●      Training. Some managers might say that visiting workshops or seminars is a part of their daily routine and thus cannot be regarded as a present. But ambitious specialists never miss the chance to upgrade their skills and expand their knowledge. To make people genuinely happy, select a rare and unusual educational event for them. This might be a training conducted by a foreign specialist who came to your country just for a couple of weeks. Or this could be an immersive workshop based on the latest technological advancements. When selecting an event, make sure that it will help your employees to perform better at work.

●      Trips. You can either distribute individual travel vouchers among your staff members or organize a collective trip for them. The latter takes much more time and effort and should probably be reserved for truly special occasions. During a collective journey, it would be nice to hold networking events. As for educational events, you should better postpone them until you return home. When on a trip, people generally want to get new impressions and not think about their work or training.

Avoid rewarding the staff with the gifts that you produce, unless they are special and unique. For instance, if you create designer jewelry, you can invite the employees to pick a gift for themselves from a certain range of goods. But it would be impolite to reward them with a huge cake if you bake cakes.

How to Adjust the Chosen Sales Strategy to Your Organization

No matter which of the sales incentive ideas you decide to implement, you should fine-tune it so that it fits your corporate culture and business objectives. You should reward not any achievements but only those that involve types of behavior that you encourage.

If you foster collaboration, your sales incentives should involve diverse rewards for productive teamwork. If you focus on individual performance, build a multi-level reward scheme that will motivate your staff to increase their ranks by delivering consistently better results.

To obtain a clear vision of your corporate structure, assess your sales methodologies, the roles of your employees, and the vital processes of your business.

Your sales incentives should encourage people to achieve more and not neglect some aspect of their duties for the sake of more lucrative tasks. For instance, you can distribute rewards among managers who close the most profitable deals. To get a bonus, a professional might concentrate exclusively on one deal and miss a dozen less profitable ones. This would be unacceptable if you aim to expand your client base.

When compiling a sales incentives program, you should rely not only on the characteristics of your goods or services. You need to realize the strong and weak points of your team members too. The program should be designed so that it helps employees to overcome their weaknesses and hone their strengths even further.

The good thing is that the best sales managers are inherently motivated to perform better. They do not want to rest on their laurels. To reach job satisfaction, they need to continuously acquire new skills and beat their own records. It would be a mistake to think that you will need to invest large sums to motivate your best professionals. Of course, they will appreciate a monetary reward. But it would be just as important for your team members to understand that you value and appreciate them.

Conclusion

A good sales incentives program will help you to motivate your team for better achievements. Your employees will start to generate more revenue for you and themselves and their job satisfaction will grow. When compiling a rewards plan, you should learn how to estimate the achievements of each individual in different contexts and sales scenarios. Plus, you will need to assess team success too. Hopefully, this article gave you enough food for thought.