Sales have been called the engine of business growth and for very good reasons. It is the most important operation for the enterprise and is often the bottleneck that determines the amount of revenue an enterprise can earn in today’s world; the biggest challenge is often not so much about the ability to produce things but rather finding customers to sell them. Thus it is only to be expected that sales staff should get special treatment in any organization. They are often managed differently, too – for example, by compensation through sale incentives rather than through fixed payments, as is often the case with other departments.

Characteristics of a good sales incentive

The determination of these sales Incentives is a crucial decision that must be taken by the management of any organization, And it is a decision attended upon by several challenges and considerations. Some of the considerations while choosing a sales incentive are the following:

  • Needs and budget of the organization

The first and one of the most important considerations while determining a sale incentive is determining the needs and budgetary constraints of the enterprise. Though it is not recommended to make budgetary cuts in this regard, there are some incentives, such as awards and certifications, etc., which even an organization with a limited budget can take.

  • Sales incentives should be just and connected to the performance of the employee.

It is also equally important to note that sales incentives should be connected to the performance of the employee. However, co/connecting it to sales may be an easy criterion. One must also consider other factors such as – new customers created, loyal and repeat customers maintained, customer reviews, etc.

  • The decision to give sales incentives should be unbiased.

An important consideration while choosing a sales incentive is to ensure that the incentive can be given without any personal bias; otherwise, it may leave some employees that perform well highly disappointed. For this, sales incentive management system that can automate the process and those that have minimal dependence on human judgment should be preferred.

  • A good sales incentive should be achievable by all.

It is also equally important to ensure that everyone will have an opportunity to achieve the sales incentive – whether young or old, male or female, etc.

  • Sales incentives should be actually desired by the sales staff.

One of the most important considerations while choosing a sales incentive is making sure that one only goes for a sales incentive that is actually desired by all the salespeople. Otherwise, some salespeople won’t be incentivized at all by it.

  • Several sales incentives can be pooled together.

To get the best of their benefits, it is a wise strategy to make a pool of various sales incentives and offer them on a point basis or by asking employees to spin a reward wheel. Such systems are more successful as they understand that different employees may be motivated by different kinds of perks.

  • It may be best to let the sales staff individuals choose their own sales incentives.

The last but not the least important consideration is whether one may not just ask individual well-performing employees to choose their own incentives. That can also be done by an automated system that will show each employee a list of available incentives to choose from.

Advantages of sales incentives

There are several excellent advantages of giving sales incentives. Some of the most important of these advantages. Some of the most important of these advantages of sales incentives include the following:

  • Giving sales incentives can increase the motivation of salespersons, thus encouraging them to work extra harder.
  • Giving sales incentives is also a great way of increasing sales resulting from increased efforts made by sales staff.
  • The sales team is often the face of the organization to potential and existing clients. Thus keeping them motivated can help raise the goodwill of the enterprise.
  • Giving sales incentives may lead to better utilization of resources as resources will now use more optimally to produce a higher quantity of goods for meeting the increased demand.
  • Giving sales incentives can help reduce the sales staff turnover rate as salespersons feeling motivated will want to stay with the organization. That can also help cut back the costs of training and orienting new employees.
  • Giving sales incentives can also lead to an increase in profits resulting from increased sales and better utilization of fixed assets.
  • The right kind of sales incentives takes into account the unique challenges faced by the sales team arising from working in the field and often being exposed to the environment.
  • Giving sales incentives can lead to a better Return on Investment (ROI) as the profits will increase even as the investment stays the same.
  • Giving sales incentives can help a business attract more shareholders through its high Return on Investment (ROI), as described above.
  • Giving sales incentives can help a business raise more credit on good terms easily, and this credit can be used to leverage capital and further increase Return on investment (ROI).
  • Giving sales incentives can help a business expand its operations by helping raise easy credit and more capital.

One must note that the above list of various advantages of sales incentives contains only some of the most important incentives and is by no means exclusive.

Frequently Asked Questions (FAQs)

A lot of people have doubts and questions regarding gold lockers. Some of the most important of these frequently Asked Questions (FAQs) are discussed in detail below:

Questions: What are some of the most common sales incentives?

Answer: The following are some of the most important sales incentives:

  • Sales Commission
  • Bonus
  • Promotion
  • Awards, certificates, trophies, and other forms of recognition
  • Further training and skill development
  • Additional Paid Time Off (PTO)
  • Free entertainment
  • Gifts

Question: How to ensure smoother delivery of sales incentives?

Answer: One can ensure a smoother delivery of sales incentives by using an automated digital system for their delivery

The Bottom Line

One can easily wrap up the above discussion by concluding that sales incentives are definitely one of the most important expenses of the enterprise, and if used effectively, they can help in generating a lot of revenue.

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