Stop Thinking of Sales Incentives as Bribes!
What do you think of when you hear the phrase “you earned a reward”? Dogs getting treats for rolling over and playing dead? Kids coaxed into behaving with candy or a toy? Many people make the same associations, which is why they believe that using rewards, or sales incentives, to motivate salespeople is a bad idea.
Incentive rewards can be a complicated concept. Do you really want employees to increase sales just for the rewards? Of course not. You want sales employees to perform well out of an intrinsic motivation, or an inner satisfaction from succeeding, and a desire to help the company reach its sales goals. Extrinsic motivation, while it may be effective for a time, is not a long-term tactic to motivate salespeople. The shelf-life of a material incentive is only so long. Salespeople need emotional and mental connection to work in order to stay fulfilled, engaged and high-performing.
All this means that it’s important not to reward sales employees for the wrong reasons. It doesn’t mean that sales incentives don’t work, though. These incentive best practices ensure your sales incentives work to elevate sales motivation in the long-term, instead of having only a short-term effect on salespeople’s behaviors.
- Don’t reward them for what they’re already doing.Psychological studies suggest you shouldn’t give people rewards for things they already do. Especially if they enjoy the behavior they’re being rewarded for, it commodifies the activity and turns it into something they do only for reward. It turns intrinsic motivation into extrinsic motivation, lowering productivity.
You can’t bribe someone to “do a better job.” But incentives can motivate sales teams to adopt new behaviors. You should reward salespeople for going the extra mile, for growing your business and expanding beyond the status quo. You get extra, out-of-the-ordinary effort when you offer out-of-the-ordinary sales rewards that are proportional to that effort.
- Don’t use cash rewards.Studies show that people perceive cash rewards differently than tangible, non-cash incentives. Why? Because nothing really differentiates cash rewards from salary. Salespeople mentally lump them in with the rest of their pay and it becomes an expectation rather than an exceptional reward for exceptional work. By offering salespeople non-cash incentives, you give them the ability to show off and brag about their rewards. The reward becomes a conversation piece and a symbol of their efforts, which leaves a more meaningful and long-lasting impact on their motivation than cash that’s quickly spent and forgotten.
- Make sales rewards personal.Imagine walking up to a salesperson and pointing to a reward they earned for taking initiative to expand their product knowledge and skill set. You tell them, “That was just a bribe.” How do you think the salesperson would react? They probably wouldn’t get the warm and fuzzies. That’s because they’re proud of the effort they put forth to earn the reward. For that particular salesperson, the reward’s worth goes beyond its monetary value.
Work that is personally relevant and meaningful is more likely to motivate sales employees. When you make sales rewards personal—by clearly communicating the accomplishment that earned the reward, for example—it gives the reward greater significance. Communicate strong connections between rewards and personal growth, so sales incentives are more meaningful and impactful to salespeople.
- Show them how their behaviors help the company reach business goals.One of the best ways to make sales incentive programs more meaningful is to show participants how the program results impact your organization. In a study conducted by behavioral economist Dan Ariely, he found that people were much more motivated to work (in this case, building toy robots) when they got to see the fruits of their labor afterward.
To translate this incentive strategy into a sales environment, show your participants graphs, charts and other visuals to demonstrate the positive impact their behaviors have had on sales, revenue, market share, profit margin and other metrics. When you connect the dots and show sales employees how their extra efforts help the company as a whole, sales incentives become far more meaningful to them.
Sales incentives and bribes are very different animals, as long as you treat them as such. When you elevate incentives with the personal value that makes them more important and meaningful to recipients, they become powerful and long-lasting sales motivation tools.