7 Sales Incentive Mistakes You Don’t Want To Make

Table of contents

There are some common pitfalls of rushing into an incentive program without taking into consideration your individual requirements.

Of course each company and its goals are slightly different, but time and again we see the same mistakes being made with sales incentives.

We thought we’d list these sales incentive examples for you here for you to learn and then fix sales incentives.

1. Only Having Annual Programs

The human psyche is a funny thing.

Shorter programs are seen as more achievable, even if you are asking for the same overall results over the course of the year! It might seem like a larger pay off at the end of the year would be a more attractive prospect, but more often than not, it is the shorter, punchier programs with smaller but more regular payouts (cash, vouchers or other rewards) that evoke more inspiration amongst staff.

2. Not Creating An Even Playing Field

In terms of monitoring and retention efforts, almost 80% stated that they implemented annual reviews which included career development chats with staff. Encouragingly, 70% said they fostered an open and honest line of communication between managers and employees.

But when this was questioned further, any in-depth techniques were lacking.

3. Inconsistent Communication

It should be a glaringly obvious component of starting a sales incentive program, but it is surprising how many companies fail to properly explain the program, or have somewhere that staff can refer to for more information or FAQs.

4. Rewarding Existing Sales

Sales incentives should aim for newer, better sales. You, no doubt, have a sales commission structure in place, so rewarding sales staff twice for sales is counterintuitive. Incentive programs should inspire extra effort.

5. Only Rewarding Results

This can make people feel discouraged if they are not getting those results during a sales slump or a seasonally slow period.

What you should be rewarding is their increased activity during these times. Only measuring a person by the results doesn’t take into account that sometimes it the chips don’t fall as they should. There are many components to a sales process that the salesperson doesn’t have any control over.

These can include:

  • Competitor Price Discounts
  • Client Budget Cuts
  • Product Recall

What sort of activities should you reward?

That will depend on your company, product and sales function. It could be number of calls made, meetings booked, demonstrations carried out? If your business knows which activities regularly lead to decisionmaker buy in or conversions, a marked increase those activities should be rewarded. It shows hard work and perseverance, which should always be recognized.

6. Treating Sales Incentives As Compensation

Incentive programs should not be a repackaged version of the main compensation/commission structure. This isn’t new, it isn’t exciting, it isn’t motivating.

If you’re adding an incentive scheme to try and achieve what the main commission structure isn’t, that’s a problem. Look at the way you compensate your sales staff first and you’ll find that you’ll probably end up having to spend less on the incentive program to achieve the same results!

7. Only Offering Cash

Ask your sales team what they would like to receive as an incentive reward and we’ll bet they’ll say financial rewards. But many studies have shown that noncash rewards can be assigned a higher value by people than their actual value. Particularly anything to do with travel or merchandise. Cash is often seen as a compensation (see point 6), whereas ‘treats’ that the person might not have otherwise bought are far more memorable.

Sales Incentive platform

Look at the technology behind the Ovation's Sales Incentive platform, used by companies globally, it gives you a great idea of how a properly run program looks. Discover it today.