A How To Guide For Planning Sales Incentives

Don’t just willy-nilly make up an incentive plan!

It is important to think about your strategy carefully when planning sales incentives for your team.

Many incentives do not do what they are created for – to create an increase in something.

It is important to analyze the various components of each incentive plan to determine if it will promote the higher level of performance in your team that you desire.

There are several things you should keep in mind when planning your direct sales incentives!

12 Points To Consider When Planning Sales Incentives

planning sales incentives

  1. What is the final outcome that you are looking for?
  2. Is it meaningful and motivational for the average distributor?
  3. What will the incentive cost per person?
  4. Who will earn it automatically?
  5. Who will never earn it no matter what?
  6. Who can you stretch with the incentive?
  7. Does the stretch look too hard?
  8. How many will take the challenge and the stretch?
  9. If those do make that stretch – what will it cost you?
  10. How will you benefit in the long term by this investment?
  11. Does the cost justify the anticipated results?
  12. Team Leaders – Does this incentive support the home office’s current promotions and intentions?

Team Leader’s Sales Incentive Must Support Company

I would like to address #12 first because it is often overlooked!

A team leader who creates incentives that support the long term goals of the company will grow a productive team.

If the home office is running a bookings incentive your incentive must support that incentive by creating a stepping stone towards it.

They may offer a reward for submitting 4 shows in a certain month. Your incentive that would support that may be a booking blitz that dates 6 shows in the same month.

Putting a recruiting incentive out would spread team efforts too thin and minimize the results of both.

Make sure that any sales incentives that you run on the team level support and promote the company’s goals as opposed to taking away from it.

Here are 4 articles that include incentives that can be run on a team level:

What Will The Incentive Accomplish?

Creating a sales incentive that achieves your goals, is meaningful to the team, and cost effective requires skill, strategy and a trial and error approach.
sales incentives
Do you want to increase sales, bookings, recruiting, conference attendance or some other goal?

You must be very clear what the sales incentive will reward, the levels of achievement and the steps to get there.

Each program should include incremental incentives that will lead to the desired end result. These are not necessarily always physical rewards but may be as simple as ‘status’ rewards.

For the program to effectively incentivize your team it must be meaningful and motivational to a large group of your team.

Make sure that challenges are a stretch for most and your rewards are something that is desired by most of those involved. The ideal rewards are a tough one…. everyone has different interests, motivations and desires!

As a full time distributor who used my income from party plan to pay the mortgage, jewelry, certificates, or fashion wear was of no interest to me! Give me cash or possibly office supplies or don’t bother was my attitude! Learn more about Deb Bixler‘s story.

In my corporate job we had 3 types of incentive rewards we offered our employees:

  1. Job related: new laptop, better desk chair, upgrade on phone, training opportunities, better station in the restaurant dining room, anything that makes work easier.
  2. Tangible personal: watch, jewelry, Starbucks gift card, cash and generally anything that is a splurge that they may not get for themselves.
  3. Experiential: dinner for two, amusement park or sports event tickets, recognition among peers, or any experience that may be coveted.

The same categories relate to your direct selling team as well.

Jewelry is a great motivator for some but not for all…. I personally believe a good promotion for a team of party plan consultants offers the achievers a choice of prizes to pick from: possibly one from each category.

This, of course, complicates things for you, the planner, but may bring better results.

Remember: If the stretch is too big and there no stepping stone goals or the incentive gift does not appeal to them, chances are many will not participate!

Planning Sales Incentives From A Financial Point

What is the base level of your current team participation before the incentive?

Where is your team now in relation to the change and where do you want them to be at the end of the promotion?

It is important that you are very clear regarding the start and finish point!

  • Not Good: I want to see higher show average per consultant and increased team sales.
  • Good: Team sales is currently at $3308 per month with a consultant average of $548 and the goal is $4300 in sales with a consultant average of $712. I am looking for a 30% or better increase over the incentive period.

Then expand this to include what this will mean for you in increased income immediately and over the long term.

Will the increase be something that creates a new momentum that sustains after the incentive period is over?

How can this new level affect your income levels when the incentive period is over and does that justify the financial investment in the incentive.

If you do not know your return on investment, there is no way of knowing whether it is even worth doing!

Click To Email Deb

Who Will Earn The Incentive?

As you plan your incentive think about who will earn it automatically.

  • Who earns every incentive?

Chances are these people do not change their mode of operation based on the incentives. They are incentivized on their own and have a mission that they are seeking with or without any extra perks along the way.

Financially you will surely be paying out! Include them automatically into your budget but throw them out of your planning considerations.

  • Who will never earn it?

The distributors who are submitting one order or show every few months and barely maintain the minimums are not good targets, so take them out of the equation too.

Generally the focus for your incentive should be those in the middle. (The exception to this would be if the target of the entire incentive is specifically to get those almost inactive consultants up to speed!)

Throw out the high and low achievers and target the tried and true distributors with a challenge that appeals to them!

Once you have the main pack separated out, you must make an arbitrary decision as to what percentage of them will take the challenge and attempt to stretch enough to earn it!

This is the toughest part!

There are no statistics on incentive participation rates. I recommend that you make a few calculations on 2-3 levels of participation to see the numbers and how they will effect your end payout.

  • What if only 10% achieve it?
  • If 25% take the challenge and earn it?
  • Or 30% achieve top level?

Complicating all this are the various (yet important) stepping stone awards!

The final cost of your program will include the awards you must also make to those high achievers, who did not change their efforts at all but were already working at the level of the challenge as well as those who attain an interim bonus.

It is not so much how much will it cost… it is what is the return on the investment?!

The return on the investment long term VS the financial cost of staging the event must be accurate!

When you know what your estimated cost will be you can compare that with your expected take home results.

Direct Sales Incentives Stepping Stone & Rewards

This is where the stepping stones along the way come in. If the stretch is too big and there are no interim levels to mark progress then your achievers will be limited.

When you are able to create mile markers along the way that create that momentum that makes each consultant feel like “this is not that hard” or “I am almost there” then the incentive will be effective!

Remember SMART goals when planning incentives!

S – specific, significant, stretching
M – measurable, meaningful, motivational
A – attainable, achievable, acceptable, action-oriented
R – realistic, relevant, reasonable, rewarding, results-oriented
T – timely, tangible, trackable

When you build the SMART goal’s details into your team incentive and have a good handle on the finances your team will take the challenge and you will improve your bottom line!

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