Sales Incentives: Ideas & Examples to Design a Program for Your Team

In a colony of bees, workers and drones are responsible for putting in the legwork required to run the show. From food collection to nest building and brood-rearing – they do it all, under the leadership of a queen bee that lays eggs for the hive.

Their motivation? Survival.

However, motivating your sales team isn’t all that simple. You need well thought out sales incentives programs to fuel your team’s motivation to meet your sales target.

Numbers prove this: businesses using a sales incentive program report a 79% success rate in reaching their goals by offering the correct reward.

The only catch is that making the right sales incentive plan that motivates each team member individually and collaboratively is easier said than done.

This is why we’ve put together this guide that walks you through:

  • Sales incentives schemes
  • Sales incentives types
  • Sales incentives (real-life) examples and ideas
  • Motivating individual sales reps
  • Designing the right sales incentive program for your team

I’ve also talked to 3 sales executives to learn what motivates their team so you can learn from them and replicate what you like.

Since we’ve got a lot of ground to cover, let’s get started:

Sales Incentives: What it is and why you need it

Sales incentives are rewards for sales reps for accomplishing their sales goal. The incentive could be monetary or non-monetary, with the underlying aim being the same: to encourage your sales team to meet their goals.

As a sales leader, you need both:

  • Sales incentives programs to motivate individual reps and
  • Sales incentives for team collaboration that encourage individuals to work together as a team

sales incentive program: why you need it

But why do you need team incentives in addition to individual sales incentives? Because your buyer’s journey has changed, thanks to the internet.

With ever-increasing access to the internet, prospects now do their research and reach out to sales reps to answer their supplementary questions at a later stage in their journey instead of early on as in the past when salespeople guided the entire buyer’s journey.

Another thing that’s changed in the buyer’s journey is that talking to one sales representative doesn’t convince customers. If anything, potential buyers end up talking to more than one representative and even people on your team from various departments.

Buying Behavior and Touchpoints

For instance, a buyer talking to your sales development representative goes on to learn more about your product or service.

This explains why you need both individual sales incentives and team incentives. On top of that, Inbound Sales Team Leader at Bannersnack (previously banner maker), Vlad Vlădulescu, highlights, “incentivizing individuals offers them personal motivation and a clear path for their goals. Whereas, incentivizing the team gives everyone the sense of a common purpose and accomplishment, allowing them to see and reach beyond their quotas.”

On the whole, a sales incentive plan help you in the following ways:

  • Keeps your sales reps fired up to work towards their sales goals
  • Improves sales performance
  • Close more deals as your team gears toward achieving their incentives
  • Improves team loyalty as employees that work hard to earn incentives end up putting more into the business, which makes them loyal to the team


Sales Incentives Schemes

Drafting effective sales incentives programs starts with an understanding of how the buyer’s journey has changed as we discussed above. On top of that, knowing sales incentive schemes is crucial. These schemes can help you address the changes in your buyer’s journey and, with it, the changing roles in your team.

Here’s a walk through the 5 sales incentives:

Types of Sales Incentive Schemes

  1. Role-specific incentives
    This involves setting rewards based on the reps’ strength so they outperform themselves.
  2. Split incentives
    This involves splitting the incentive among reps who work together to close a deal, which encourages reps to work together. So, consider setting split incentives for team collaboration.
  3. Presales incentives
    As we discussed above, interested customers now take more time when deciding whether to do business with you. This elaborate decision-making process can drain reps’ motivation, which brings us to presales incentives. These set reward reps in different stages to maintain their focus throughout the buyer’s journey.
  4. Omnichannel incentives
    Undoubtedly, customers today interact with both AI and automated digital channels in their buyer’s journey. This can lead sales agents to view AI as their competitors. Omnichannel incentives are, however, geared toward preventing this by ensuring that the rep is rewarded in all cases even if AI attracts the customer first.
  5. Advanced-analytics-based target setting
    Setting reasonable sales objectives, targets, and quotas for creating reward schemes for several complex sales scenarios can be challenging. Luckily, an advanced-analytics-based target setting can beat this issue. It leverages data analytics to draft a fair sales incentives program, which helps keep reps motivated better.

Types of Sales Incentives

Now that you know the foundational bricks of a solid sales incentive program, let’s introduce you to the type of sales incentives at your disposal.

You have two broad types of sales incentives:

1. Monetary incentives or the classic money-backed incentives

There’s no denying that money is an effective motivator. In fact, the Aberdeen Group shares that over half the best companies increased their profits by motivating employees with cash-based incentives or, technically speaking, Special Performance Incentive Funds (SPIFs).

Consider setting the following monetary incentives:

Monetary Sales Incentives

In either case, make sure the incentive is clear. This way, your employees understand that reaching X sales activity goal will reward them with a bonus, or closing X deal as a team will give them all a commission.

2. Non-monetary incentives

Monetary incentives can lean on the expensive side. So, if your finance team doesn’t give you the green light, you need an alternate sales incentive plan, which brings us to non-monetary incentives.

Not only are non-monetary incentives budget-friendly, but they’ve proven to be more effective than cash-based rewards because they offer employees’ positive experiences and, subsequently, become memorable.

In fact, about 50% of sales reps say they prefer reward experiences. This explains why non-cash incentives had increased from 25% use in US companies in the 1990s to 80% in 2018.

Wondering how to plan non-monetary rewards? Here are some ideas:

Non-monetary sales incentives

  • Give away product prizes but make sure you’re gifting products that align with the reps’ interests. Giving a toaster to a music-loving employee, for example, is a bad idea.
  • Incentivize with learning and training opportunities. Offer sales training courses, tickets to an upcoming sales event, or so.
  • Take your team to a themed lunch. This goes a long way in creating remarkable team memories that stay with them longer than cash incentives, which your employees spend and forget.
  • Offer leadership opportunities. This appeals best to the star performers on your team. Planning a new project? Motivate reps by offering them the lead in that project.
  • Give away travel tickets. Who doesn’t love those? Such a reward is also a great way to help employees improve their mental health.


Sales Incentives Examples (Real-Life)

You now have an idea of the types of sales incentives you need to you set for your team. Let’s give you a peek into some real-life sales incentive program examples.

While copying these sales incentives examples exactly won’t help you much since each team’s dynamic varies, you can certainly take inspiration:

  • An HVAC company motivated its employees by offering them reloadable debit cards that they gave when a product purchase was approved. The results? This sales incentives program led to a 45% increase in the number of eligible units bought.
  • An insurance provider rewarded its independent insurance agents with travel and merchandise rewards. This incentive led to an increase in policy quotes by 25% and new insurance policies by 19%.
  • Similarly, English Blinds uses “cold, hard cash” as an incentive for its sales team as their Sales Manager, Steve Shaw, told me. But to prevent this incentive from falling short, Shaw shares, they keep their financial incentives “bite-sized and stackable/cumulative to maintain momentum and drive.” This strategy has proven to be “more effective for me than trying to set up competitive drives or pitting individuals against each other,” in Shaw’s words.

Aswin Shibu, the VP of Sales at MixRank also shares their process of planning sales incentives. Shibu writes,

For setting incentives for SDRs [sales development representatives], you should be motivating them on activities that are within their control. I’ve seen some teams base commissions for SDRs purely based on revenue closed, when that isn’t in their hands at all. So, due to a bad product or a poor AE [account executive], the SDR could end up being penalized due to no fault of their own. It can also work the other way, where if an SDR is compensated for the wrong metrics, like # of emails sent, that might encourage bad behavior.

A balanced approach here would be to set the commissions on qualified opportunities created. An AE determines what a qualified opportunity is, and this way, the SDR will focus on setting the right meetings, and not just set up meetings with anyone.

And you should still give a percentage of revenue to SDRs, but that should be like a bonus, instead of becoming a large component of the variable pay.

With AEs, we’ve also made a few changes to the usual commissions pay-out. For one, AEs get paid on invoices paid, and not at the time of signing the contract. They get paid when the company gets paid.

And another thing we do differently is, we’ll keep paying commissions on customers who continue into Year 2, 3, etc. This way, the AE has incentive for a long-term stay at the company as their own Year 2, 3 become lucrative, and they’ll also interact with customers a lot more, ensuring customer happiness. Win-Win.


How to Motivate Different Sales Representatives

Just as in a typical classroom, your sales team includes folks with different motivation levels. There are high achievers, backbenchers who prefer slacking off or just don’t understand how to reach their goals, and those who are willing to achieve more and prove themselves.

In sum, you’ll typically find these 3 categories:

Sales Incentive Programs for each performers

  • Star or top performers: these folks can easily knock all (sales) balls out of the park.
  • Laggards: these individuals need a lot of guidance or prodding. They are usually those reps who perform poorly.
  • Core performers: where stars and laggards take the extreme ends of the sales spectrum, core performers lie in the middle and are typically those who are new hires wanting to prove themselves.

Making an effective sales incentives program involves having a plan to motivate all of your sales reps.

Wondering how to do so?

Here are some handy tips to motivate different sales reps:

Motivating star performers

The top performers on your team are quick to hit their sales goals so they can quickly reach their incentive rewards. Hence, motivating them with monetary rewards won’t yield much.

So, what exactly motivates them? Recognition and appreciation for all the effort that they put in.

Here are some sales incentive ideas for star reps:

Motivating Star Performers

  • Recognize their work by making them a part of the advisory council or President’s Club“Some star performers absolutely live off the hype and reputation they have, and need a lot of recognition and applause,” shares Shaw. So, a good incentive for them is public recognition.
  • Set exclusive travel incentives

    Chances are star performers who have already scored several travel incentives. But an exclusive travel incentive makes things exciting for them, therefore, serving as an effective incentive.

One last thing, limit interference in their work. “Star performers often (if not mainly) need nothing more than to be left alone and to follow their own path, as their winning formula is unique,” notes Shaw. “Too much interference or direction tends to be wholly counter-intuitive here.”

Motivating laggards

Poor performers and laggards typically don’t perform better by threats of getting fired. Shaw tells me, “Going hard at laggards is often the worst approach, particularly if they are the ones losing out (in terms of commissions) rather than hurting the company directly. Being told off or made to feel like failures rarely improve performance.”

Put simply, telling them their job is at risk would do little to motivate them. Instead of this approach, try the following sales incentive ideas:

Motivating Laggards

  • Use the bench program to incentivize them
    A bench program includes having people ready to replace laggards in their jobs. Such a strategy is proven to encourage them to reach their sales goals as the knowledge of people waiting to replace them nudges them forward.
  • Set incentives for them as stepping stones
    Laggards need constant pushes to improve their performance, which is what makes stepwise bonuses effective rewards for them. For example, instead of having an annual bonus in place for laggards, consider having smaller, quarterly bonuses that grow as they reach their specific goals.
  • Work with low performers
    Another thing that works with laggards is support. Sit with them to identify what’s holding them back and what you can do to improve their performance.

Shaw says, “support, empathy, and working with them to identify any issues and coach around them is key!”

Motivating core performers

“Core performers need to feel seen,” highlights Shaw. “They are often overlooked as they’re rock steady and don’t need a lot of attention and don’t tend to cause problems.”

In fact, research suggests that improving core performers’ skills by only 5% can yield about 60% improvement in performance.

Translation: you need to set incentives that make this group of reps seen. “Recognizing them and ensuring they feel recognized for their efforts is key,” notes Shaw.

How? Here are some sales incentives:

Motivating Core Performers

  • Offer training and coaching
    Core performers are usually sales reps who are new to the workforce, so they’re eager to learn. This makes incentives of sales training, coaching programs, and conferences effective for this group.
  • Set multi-tier incentives
    Tiered incentives include setting rewards in tiers with the basic tier being easily attainable with the rest of the tiers based on the increasing challenge. Core performers appreciate such tiers to improve their performance. In contrast, stars aim straight for the top tiers with laggards being satisfied with accomplishing the first-tier target.
  • Make them feel empowered
    Vlădulescu shares, “Here at Bannersnack, we believe in offering people a sense of empowerment regarding decision-making, enabling a thought process where our team members are creating their ideals and objectives based on the company’s guidelines, while also maintaining a feeling of personal involvement and self-value. This system allows our people to motivate themselves and find creative and innovative ways of dealing with their workload.”


4 Steps to Design the Right Sales Incentive Program for your Business

We’ve come a long way and what you’ve learned so far – including sales incentives schemes, why you need to set both individual and team rewards, how to motivate different sales reps – will help you create effective incentives.

Keeping all this in mind, start drafting your sales incentives plan by following these pointers:

Sales Incentive Program Design

  • Understand what motivates each member of your sales team and plan individual incentives accordingly
    If you think you’ve figured out what fuels each of your team members, think again. According to a survey by The Incentive Research Foundation, 99% of respondents were motivated by unique factors.So, instead of assuming what motivates your sales agents, ask them. For instance, ask them: What incentive should I set for you to achieve X? What can you do to achieve goal X?Moreover, in your one-on-one meeting with team members, keep an eye on what motivates individual employees: is it a monetary or non-monetary benefit?Also, be clear about asking if they prefer private or public recognition. Simply ask: do you want to be appreciated for your efforts in front of your colleagues or one-on-ones are a better idea?
  • Understand the strengths, weaknesses, and goals of each of your sale rep for drafting team collaboration incentives
    This helps you create a sales incentive plan that plays to each agents’ strengths with their teammates covering up their weaknesses.Understanding your employees’ goals and career projections to help them grow also works wonders. For example, Shibu shares, “the leadership invests considerable time into figuring out a career path for every person at the company. The motto we believe in is ‘take care of your employees and they’ll take care of the customers.’”
  • Check with your finance team before setting a sales incentives program
    This is, particularly, true for planning monetary incentives. You don’t want to set up an incentive plan that your financial team can’t dole out and break your team’s trust.
  • Keep your sales incentive plan simple and straightforward so that its clear to your team
    Each sales rep needs to know what he needs to do to win their reward. On top of that, all sales agents should be able to keep a clear track of their wins. To this end, you need a SMART sales incentive plan.Such a plan is:👉 Specific: The incentive is clear, so sales reps know exactly what it is that they need to do to get it.
    👉 Measurable: There are trackable metrics or benchmarks that help sales agents reach their way to achieving their reward.
    👉 Achievable: The target for the incentive is challenging but doable.
    👉 Relevant: The target for the incentive aligns with your overall sales objectives.
    👉 Time-bound: When will the sales rep get their reward. Is it quarterly or yearly? Or, will they get it upon completing an action?

And before we wrap this guide, here is one final tip to be mindful of as you finalize your sales incentive program: always keep the reward time low. This way, you’ll give your team a steady flow of opportunities instead of bundling all their achievements into quarterly or yearly achievements.

So, are you ready to create a sales incentives program that helps take your business to the next level? Get started today by diving into understanding what makes sales reps happy.