Sales managers and directors need to look beyond traditional sales incentive schemes to boost their team's productivity. Measuring sales success has become about so much more than simply looking at sales figures achieved. Performance improvement programmes (PIP) are the new sales incentive schemes – the new PIPs both reward and recognise sales people based on outcomes such as customer satisfaction measurements, cross-selling and upselling, and customer retention.
New FCA (Financial Conduct Authority) rules are driving financial services companies in particular to reconsider their sales incentives schemes in the light of regulations designed to prevent mis-selling. Sales people might now be rewarded for identifying the right product for particular customers rather than for sales totals or, possibly inappropriate, cross-selling. FCA rules have hit the financial sector hardest but any organisation selling finance as part of the product or service sale has to consider the implications.
There is increasing recognition that a sales force that is highly engaged at an intrinsic level – that is, finding their workplace rewarding and interesting rather than just driven by bonuses which might be matched or bettered by a rival employer at any time – will achieve better results. The IES/Work Foundation report ‘People and the Bottom Line’ found that if organisations increased investment by 10% in a range of workplace practices relating to boosting engagement they would increase profits by £1,500 per employee per year.
Sales directors need drive a culture change alongside colleagues in HR and line management so that factors such as career progression through training and reward for customer service, for example, have a bigger part to play in sales incentive schemes. Sales management will also be looking to encourage behaviours other than just the drive to achieve high sales figures. This might include improved record keeping, better lead generation, collaborative working or providing good after sales service.
Here are seven tips to evolve sales incentive schemes:
- Start by analysing the data from incentive programmes from previous years. Your incentive provider agency should be able to help you with this, as analytics are key to making improvements. This is not a trivial task – blue chip multinationals have spent years fine-tuning incentive schemes to work well and within the rules.
- Rethink how you measure success. An effective PIP will reward customer satisfaction, customer retention and suitable add-on sales. The measurement of success in sales should now reflect the overall outcome for the customer, not just whether a sale was made or not.
- Engage as many employees as possible with the process of designing a performance incentive programme from the start. Get sales people on board with a new scheme early and they will sell its benefits to colleagues for you.
- Update your sales league tables. Be creative with graphics and bring the information to life with the latest web-based sales league table platforms. Sales people might see their sales totals shown as stepping-stones to a paradise island holiday, for example.
- Aim to create an incentive portal that is so much more than a simple league table. It might also offer training content around products and services.
- Design your PIP to reach more staff, more often. Include a mix of individual and team targets and incentives and target incentives accurately at the different demographics in your sales staff. PIPs are even more personal and individual than traditional sales incentives schemes so consider them from everyone’s point of view and make sure they are perceived as fair.
- Use granular language to deliver attainable goals. By this we mean send out the right communications to the right people with realistic goals. Setting targets that are “one-step” up from what individuals are achieving will also allow incentives to reward high, mid-level and low-level performance.
The new generation of performance improvement programmes (PIPs) are set to provide a more sophisticated and granular way of rewarding and recognising sales performance that will boost productivity and the bottom line.