How the Right Incentives Drive Sales

Carrot. Carrot. Carrot. Do carrots really drive sales performance?

Salespeople typically love what they do and feel driven to sell, but at the end of the day, it’s still their job, and a big part of getting people excited to perform at work is providing them with the right incentives. Or what we might call carrots! Commissions aside, a big part of getting your sales organization to achieve their highest potential is motivating them in the right way.

Naturally, that means carrots and maybe even really big, fat carrots.

Historically, incentive structures were based on the outdated belief that all sales professionals fit the Wolf of Wall Street persona and emphasized internal competition above all else. Of course, we now know that this innate desire to “beat” colleagues isn’t a universal trait or truth among salespeople.

When you add in the rise of collaboration, it becomes clear that incentives that primarily pit salespeople against each other are outdated and ineffective.

The key? A blended approach that helps all types of sales personalities find motivation to perform.

Understand What Motivates Your Sales Team

From hunters and farmers to different personalities and approaches, most salespeople don’t fit into one stereotypical mold. So it only makes sense that they won’t necessarily be motivated by the same things.

People have different goals. They strive for different achievements, are inspired by different things, are driven by different factors, and are looking to grow their careers in different ways. Even within the same team, salespeople have different work styles, ways of communicating, and preferences for how they operate as part of the team.

This doesn’t mean that one way is inherently right or wrong. It just means that different people will find motivation through different types of incentives.

A rigid system that works for one person (or what we think a salesperson should want) won’t effectively drive your entire team.

Adopt a Blended Incentive Approach

Luckily, an incentive system doesn’t need to prioritize one type of persona over another. Instead, focus on creating a system that matches several characteristics and desires so you can motivate more of your team.

For your classic sales personas who love to compete with anyone and everyone, try implementing monthly incentives for:

• Highest overall sales
• Most units sold
• First to achieve X sales during the month
• Largest singular sale

For sales team members who prefer competing with themselves rather than their teammates, consider monthly rewards for:

• Number of transactions paid in full rather than financed
• Sales targets by revenue
• Sales targets by units sold
• Number of new appointments during the month
• Individual month-to-month sales growth

Selling has largely turned into a team sport, both within the sales team and cross functionally with marketing. There can (and should) also be monthly incentives for team achievements, such as:

• Bringing a new initiative or product to market on time / schedule
• Meeting a particular number of sales per month
• Reaching a target of new customers to sign
• Implementation of process improvements that increase revenue or profit margins

The metric being awarded can even change each month, adding an additional challenge for competitive team members.

Incentivize Your Sales Team in the Way That Works for Them

If you’re wondering if you should prioritize competitive incentives, individual incentives, or team incentives, we have the answer. All of them.

Try picking one option in each category and giving small incentives on a regular basis. For example, in the upcoming month, tell the team that you’ll be rewarding the sales team member with the highest average sales price and the sales team member with the highest month-to-month sales growth, and if the entire sales team signs X new customers that month, there will be a team incentive that everyone receives.

Having these different metrics on the table gives salespeople a variety of ways to be motivated.

Celebrate the Wins

In order for these goals to be worth working towards, they need to have meaningful incentives - but that doesn’t mean they need to be elaborate (it wouldn’t be realistic to give three large financial incentives each month!).

These monthly incentives should instead be about appreciation and recognition. For the incentives that art achieved as a unified team make it something that has fun and impact - lunch each Friday for the month (even Door Dashing for remote workers), $50 Amazon gift cards, a ½ day of PTO. Just make it fun and something that would be special for the entire team and something they can all visualize.

For individual incentives, small bonuses or gift cards as well as a personalized announcement will make the winners feel appreciated and give them a spiff that make their own performance even more fun and meaningful.

For high-value revenue goals, such as ones that span an entire quarter or year, a revenue share associated with it (in addition to usual commission) can give an extra boost.

Learn More

A healthy relationship between sales and marketing is vital to an organization’s success. Dive deep into this effective strategy in our book  Sales & Marketing Alignment. If you'd like more insights on how you can improve your sales leadership, contact us.