5 Tips to Boost Sales Now!

By Tim Houlihan, Vice President of the Rewards Systems Group at BI

Many managers incorrectly believe that they use incentives because some portion of their reps' salaries is contingent on performance. That is not using incentives. Incentives are rewards over and above compensation, and are usually used for specific, short-term initiatives. As you wade through the murky waters of this economic downturn, these five tips will help you make the most of your incentive investment and your salespeople.

1. Get their commitment.
"Do your best" is not a commitment. "Quota" is not a commitment. "Make as much money as I can" is not a commitment. Ask your people to make a commitment to a short-term goal — something that they have control over — and have them write it down. Then measure against their commitment, let them know how they're doing, manage the process, and reward them generously when they reach their goal. Remember, most people will set goals higher for themselves than you would set for them. We have seen this with hundreds of companies and hundreds of thousands of participants, and the data is stunning.

2. You get what you measure.
Measuring and rewarding for the wrong behaviors is a common mistake. If you're going to "get what you measure," then measure what will give you the best results. A medical device manufacturer offered reps a hefty spiff for selling a hard-to-sell product. Sales were abysmal because, as the reps finally admitted, they didn't know how to present it well. The spiff changed from selling to making presentations. By rewarding for presentations of the product, the reps got their heads around the real issue: What do I need to do to make a successful presentation? Sales increased by 42 percent during the next period.

3. Focus on good performers.
Notice I didn't say "top performers." Design rules and awards that engage the top 50 percent of your sales team. These reps have the capacity to do more. Don't limit yourself to rewarding only the top 20 percent. A national financial institution ran a program that saw 52 percent of their sales force performing above their previous run rate and handed out awards to nearly 40 percent. Their ROI was over 9 to 1, in part because they cast a wide net.

4. Reward incremental performance.
Give people the chance to beat their own run rates, their own baselines, their own expected performance. Don't have them compete against generic or impersonal measures such as quota, at least when it comes to incentives. Quota is only meaningful for a small percentage of people who are close to reaching it — the rest are either above and beyond it, or not close enough to matter. A high-tech manufacturer gave their dealers the opportunity to earn incentives if they beat their previous quarter's performance. Their ROI was 18 to 1, in large part because the dealers felt they could achieve because they were competing against themselves.

5. Don't use money.
The best reward is something somebody wants, but won't buy for themselves. If you put a dollar value on a reward, you have just communicated to that person what their effort was worth. A friend of mine recently told me about getting two movie tickets as a thank-you for a purchase he made. The tickets had no cash value printed on them — they just said, "This certificate entitles two people to see any movie at any theater." He didn't see it as $16, he saw it as a night out for him and his wife.

Published at XPOnline (www.SalesForceXP.com)