November 8, 2013 11.13 am This story is over 103 months old

Top 10 tips to incentivise your sales people

Happy staff: In her latest column, Susan Marot talks about the benefits of an effective commission scheme and her guide to creating one that delivers.

How to incentivise your sales team is a political hot potato in many organisations. Get it right and business growth will support the overall strategic direction of the company. However get it wrong and, well, can you afford to risk getting it wrong?

An effective incentive scheme for the sales force of any organisation will have a greater impact on that company’s results that any other single document. It impacts the behaviour of the sales team in a direct fashion. Therefore the more care and attention given to this document, the greater probability of achieving the overall objectives for the business.

The best sales compensation programs are ones that are fair, motivating and will achieve the goals of the company. Every business needs to make certain that its reward and recognition scheme motivates the sales force to achieve corporate objectives. Sales people are very quick to look at compensation packages and figure out how to maximise it only to benefit themselves. Therefore it is important to make sure that when sales people maximise their individual compensation, they also maximise corporate revenue and corporate objectives.

In order to guide the creation of an effective incentive scheme, I would say there are 10 simple principals. Following these will ensure a company’s commission scheme is an incentive to the sales people, without giving too much of the company’s money away.

  • Involve your sales people appropriately in the compensation program
  • Don’t make your offer letter a commission plan, keep them separate
  • Pay commission regularly, on time and happily
  • Furnish supporting data with the sales person’s payments
  • Keep stability in the sales incentive structure
  • Make your earnings plan realistic
  • Align your compensation scheme with the company’s plan for growth
  • Make the plan as simple as possible, but not simple for the sake of being simple
  • Reward sales based upon effort
  • Review and modify as needed

Designing a scheme that keeps within the rules can be a time consuming task. It will never be perfect for everyone, but by keeping within these guidelines any company should have a well motivated sales force that helps, not hinders, the business to achieve its goals.

Sales operations are complex and have a lot of moving parts. One way to help stabilise the sales operation is to have a functioning sales compensation plan that is motivating to a sales team, and moves the company forward in the right direction.

Incentive schemes can be rewarding and motivating if done correctly. They can have a negative impact on motivation resulting in lower sales, when structured poorly. There is no one-size fits-all process for developing a motivating compensation plan, but by following these 10 simple principals you might just get there a little quicker!

Lincolnshire-bred business woman Susan Marot runs Marot Associates Ltd, which helps businesses sell more by improving their sales process. Susan works with them to design, improve or even deliver the sales the company needs. A sales person for almost 30 years, Susan is often engaged to speak at events on selling and has regular articles published by the Institute of Sales and Marketing Management in "Winning Edge".