Incentivize Sales Teams

Learning Objectives

After this unit, you’ll be able to:

• Differentiate between extrinsic and intrinsic incentives.
• Explain common incentives and best practices.

Even motivated sales people need more than just the knowledge that they achieved 100% across the board. This is where incentives come in. An incentive refers to something that motivates someone to take a specific action.

Use Extrinsic and Intrinsic Incentives

Most incentives in a sales organization are extrinsic, meaning something tangible, like money or material goods. Some incentives, however, are intrinsic, a feeling of accomplishment or feeling integrated into a company’s culture and connected to its goals. Which ones should you use to structure an incentive plan? Just like KPIs, you should use both! 

A person can be simultaneously motivated intrinsically and extrinsically—not only that, these people are likely to be strong performers.

Find the Right Incentives

Sales and operations leadership need to take care to find the right balance of incentives to ensure meaningful growth for the business. If the incentives package is too low, sales people won’t be properly motivated. If the incentives are grand, with higher KPIs, they may demotivate the sales team—even the most driven individual contributor can be pushed toward burnout by excessively aggressive goals.

Below are common incentives that may be found in an incentives package.

Cash Incentives or Commission. This is the universally accepted motivator for a salesperson across industries. From software to hardware, to services companies, every sales team member has an incentive plan with a cash or commission component.

Material or Cash-Related Goods. Extra paid vacation, consumer electronics (phones, tablets, laptops, smart watches), home goods (coffee maker, food subscriptions), expense paid trips—these are all extrinsic rewards that can be part of a robust incentive structure.

Social Recognition. Praise from your colleagues can feel as rewarding as hitting your number! Social recognition can be facilitated via deal bells, team-wide email recognition, leaderboards, and so on. Creating a supportive and even fun environment can boost intrinsic motivation in your team members. Seeing others rewarded can also become an extrinsic motivation for onlookers who may not have hit their goals yet.

Diversifying incentives is important since it will help them appeal to a wider range of personalities on the team. While salespeople share key traits, no one incentive speaks to everyone in the same way.

Mind the Other Side of Recognition

While heaping praise on high performers can reinforce their behavior, there’s a fine balance between motivating them and shaming those who do not perform as well—the latter should never occur. Just like seeing others rewarded can improve a work environment and motivate sales team members, seeing low performers publicly shamed or punished can decrease morale. 

When it becomes clear that someone is not performing well, it is up to their manager to tactfully bring this to their attention, providing feedback and a structure for success if possible. Sales operations may be pulled in to help come up with the right set of KPIs to help these lower performing team members turn things around. 

This kind of involvement will vary based on the company, goals, and given situation. But it’s best to keep these key things in mind no matter what.

• Any leaderboards should show only the top 5—10 high-performing members. If you have a smaller team, consider 3—5.
• Similarly, when communicating plans for improvement, keep it discreet—the affected team member and their manager are often the only ones who should be in the know.

Parting Thought: Diversify

It’s important to recognize a sales team as a group of individuals, each motivated by different things. One incentive rarely fits all, but a diversified system of KPIs and incentives, along with empathetic management can position your team for success.