Keeping sales reps motivated is a year-round process. As a sales leader, you should always be thinking of new ways to motivate your sales team, focus on closing deals, and keep reps’ eyes on the prize…literally and figuratively. Whether you’re encouraging reps to close out the quarter or year strong, or kicking off the start of a new fiscal year, keeping reps engaged is key to achieving goals and hitting revenue numbers. Sales incentives are a great way to motivate your team and keep morale high.
Your first line of motivation is your sales commission structure, but there are several different types of sales incentives you can use to further encourage your team. Special performance incentive funds, also known as SPIFs, are a popular approach to incentivize reps, but the question is the form of the incentive—cash or non-cash. The right sales incentive mix ultimately depends on the sales behaviors you want to encourage and how your team responds to different sales incentives.
Getting SPIFs Right as Sales Incentives
SPIFs are a great way to push for results and encourage your sales team to strive for higher performance, especially during slower times throughout the year. In fact, research from the Aberdeen Group showed that more than 50 percent of best-in-class companies drove their increased profits through the use of SPIFs.
The trick is knowing how to use SPIFs correctly, and which sales incentives to use to drive specific sales behaviors. We will start with the former, as there is an art and science to using SPIFs correctly. Typically, poorly-designed SPIFs result from:
- Not knowing your goal. First and foremost, your sales team need to understand what the SPIF is actually trying to accomplish. Is it increased sales of a certain product? Closing more deals in the first half of the month? Regardless, once you have your goal in mind, be specific about it, and craft your SPIFs to drive the behavior that will lead to goal achievement.
- Being too predictable. SPIFs that fall on the same week or month year after year can easily be predicted, resulting in reps holding back during non-SPIF times in order to reap the ultimate benefit once the SPIF window opens. A key thing to remember is that SPIFs perform best when used in moderation and when they are unexpected. That way reps strive for performance all of the time and really go the extra mile when a SPIF is introduced.
- Having an unclear timeframe. A set timeframe for SPIFs gives reps a clear deadline to increase performance. Balance is key here. You should give reps enough time to reap the benefits of the SPIF, but not long enough that it becomes part of the everyday sales routine. Knowing this will allow you to make more strategic decisions, even allowing you to bring in insights or empirical data to benchmark your decisions. The more time and effort you put into planning, the better your returns will be.
- Making SPIFs too complicated. Like the entirety of sales planning, simplicity in sales incentives is key. The results of your incentives and how they align with rep actions should be crystal clear. Sales reps should be able to easily see that if they do or sell X, they’ll be rewarded with Y. Take out all of the guesswork for maximum participation and performance. That way, reps can focus on deals rather than trying to understand the SPIF.
- Creating SPIFS that aren’t specific enough. Sales incentive simplicity is key, but SPIFs aren’t effective if they’re vague. You want to be able to quickly launch short-term incentives, but you also want to ensure the rewards you’re offering are compelling. Benchmark against previous years’ data and use predictive modeling to determine potential outcomes this time around. Also, make sure your sales team is structured properly in order to maximize performance.
- Forgetting to analyze the outcome. Once the SPIF is completed, you need to compare the actual results to those you predicted at launch. If your SPIF didn’t end up driving the desired behavior, use your data to figure out why. Then, tweak your incentive to address those gaps and redeploy it. Incentives are a science, and like any science, it requires some experimentation—the only way to fail would be to stop innovating or stop consulting the data; everything else is progress!
SPIFs can be used to reach any specific goal, big or small. If you need a productivity boost for any reason, whether it’s summer slowdown or even the beginning of a quarter, a SPIF is a great way to motivate reps and push for increased performance.
Cash vs. Non-Cash Sales Incentives
With your SPIF planned, the question then becomes what should the incentive be? At the very basic level, these fall into two categories—cash and non-cash incentives. When used effectively, both cash and non-cash sales incentives can be extremely effective in SPIFs.
If cash wasn’t an appealing sales incentive, it wouldn’t be the basis of commissions and compensation. At the end of the day, money is always a motivator. When it comes to SPIFs and rewards outside of your compensation plan, the main goal is to ensure that the cash incentive is compelling and encourages sales reps to focus on a specific goal.
Many times, cash sales incentives are a set amount. For example, consider your team tends to close most of their deals at the end of the month or quarter. You might create a SPIF where reps earn a $1,000 bonus for each deal closed before the 15th of the month or in the first month of the quarter.
On the other hand, non-cash rewards allow for more creativity in the incentive process. In fact, some companies may find that non-cash rewards, such as sporting event tickets, travel vouchers, or team dinners might be more effective than traditional cash incentives. You can read more about the benefits of non-cash rewards here.
Sales Incentive Ideas
If you go the non-cash direction, the next step is to determine WHAT creative, non-cash sales team incentives you can offer to fire up your team and leverage their competitive nature to your advantage. Below are 16 sales incentive ideas (you can find more than 100 non-cash incentive ideas here).
- Gift Cards: These are probably the most common non-cash incentives. While gift cards are still technically monetary incentives, they give reps a physical prize to strive for. You can add a little more creativity to this incentive by giving reps the freedom to select the gift card they want.
- Fine Dining Experience: A reservation at a popular restaurant that’s difficult to get into often works well as a team incentive, but it also could be effective for individual reps. If possible, get reps input beforehand to provide a few different restaurant options.
- Entertainment Tickets: Entertainment incentives, such as sporting events, ballet tickets, or off-broadway shows, can be a popular incentive for reps to get away from the office. You can also consider offering the option for the winner to attend an out-of-town event, and take care of their travel and lodging, too.
- Tech Gadgets: Popular tech gadgets, such as tablets and smart watches make great incentives. You can allow reps to customize color or functionality.
- President’s Club: While the president’s club is often an incentive for all sales reps to work towards, it can make a great incentive for non-sales employees. Let’s be honest—everyone loves a free, all-expenses-paid trip!
- Preferred Parking: Who can forget that scene in Office Space where Peter parks in Lumbergh’s reserved parking space, resulting in Lumbergh later getting his car towed for using a handicap space! The long and the short of it is: there is no VIP statement like a reserved parking spot.
- Spa Day, Round of Golf, or Other Activity: Some of your sales team members might enjoy a day at the spa, while others would rather be out swinging clubs. Others might enjoy something else entirely, so do your best to get to the bottom of what will really drive your people to earn a day out of the office.
- Employee’s Choice: Think about your primary goal here—to motivate your sales team to work harder and smarter on their way to closing more deals. With that being case, why not just give them their choice of perks, within reason, of course!
- Wine Club Membership: Have a wine lover on your team? How about a beer lover? Actually, these days, you can probably find a subscription service for any interest. Take inventory of your team’s likes (and dislikes) and see if you can’t find the perfect match.
- Travel Vouchers for a Weekend Getaway: Traveling to a new destination is always thrilling, and tough to beat… unless you’re given the option to do so at the expense of someone else. Treat your top performers to the likes of a weekend trip or go bigger and set them up with a weeklong cruise.
- Learning Opportunities: Many companies provide opportunities for employees to attend classes, seminars, etc. to learn more about their specific craft. The problem is: not every city is considered a hub for such activity. So, look for ways to get your people to larger, high-profile conferences in neighboring states or across the country.
- Lunch with Executives: For some, the ultimate reward is being publicly recognized by their peers. Lunch with the CEO is a nice option because it offers such recognition, and allows the winner to pick the brain of your company’s leader.
- Subscription Boxes: Subscription services like HelloFresh, Book of the Month, and Stitch Fix are all the rage right now. You could offer reps a 6-month or year-long subscription. Again, you can personalize this to the rep’s choice, allowing them to take in some personal hobby time outside the office.
- A Gym Membership: Many of today’s employees strive for a healthy work-life balance, which often includes a way to get out, exercise, and be healthy. Offering your reps a gym membership, whether it’s the gym down the road or a subscription service like Class Pass or Orange Theory, you’re encouraging your team to get out and be active!
- Culinary Classes: From pasta to brew making, there are a number of budding Chopped Champions out there. Appeal to their culinary spirit with a series of cooking lessons. Many local restaurants offer cooking classes, allowing attendees to pick their meals and bring friends to share with. Check around your teams’ favorite food spots!
- Extreme Adventures: According to a recent study from the Incentive Research Foundation, the top “wow” incentive amongst millennial employees was “adventure activities,” such as hiking and extreme sports. These workers are looking for unforgettable experiences—not just goods, so why not treat them to the adventure of a lifetime, such as skydiving or rock climbing.
These sales incentive ideas are only the tip of the iceberg when it comes to rewarding and motivating your team with SPIFs and incentives. The main consideration is to build flexibility into your rewards programs so you can keep your team motivated and striving for high performance.