How to Create an Effective Sales Incentives Program

How to Create an Effective Sales Incentives Program

Nearly every sales team relies on some type of sales incentive to drive sales rep performance and reward closing deals. Failure to offer an incentive can result in lower revenue, poor employee engagement, and a high turnover rate in your sales team.

You don’t want that, which is why having a sales incentive program is crucial.

However, you also don’t want to over-incentivize your team and kill your profit margin. Instead, you want to find the right balance with a sales incentive program that gets your teams excited and hel drive revenue.

Not sure where to start? We’ll cover everything you need to know to create an effective sales incentive program–but first, let’s talk about the different types.

5 Types of Sales Incentive Programs


To be effective, your sales incentive program needs to be tailored to your company culture, industry, and the length of your sales cycle.

Take the online advertising industry, for example. The sales process is fairly simple, and the sales cycle can last anywhere from a few days to a few weeks. In this situation, creating a monthly or quarterly reward package based on sales quotas, goals, and rep performance is the most straightforward path.

On the other hand, things are a lot more complicated in the real estate industry. The sales cycle can last anywhere from a few months to several years. You can’t reward reps the same way as in the online advertising industry–or they could wait years to get a bonus.

Are you in real estate? Check out our curated list of the top real estate CRMs.

So, what’s the way out? Finding the right sales incentives for your company. Before we explore different sales incentives examples, let's cover the different types of sales incentives.

  • Presales incentives: Presales incentives work best in industries where the sales cycle can last months or years–think of the real estate industry example we cited earlier in this section. Since there’s no guarantee deals will close, you can offer incentives for deals reaching specific stages, such as getting 25 property views.
  • Analytics-based target: If you operate in a market with a complex sales process, you may find it hard to predict specific sales. The insurance industry, which fluctuates drastically, is a good example. Consider using data an analtyics to track trends over longer periods of time and design a sales compensation plan accordingly.
  • Role-specific compensation plan: Consider tailoring incentives to the roles of individual sales professionals. For example, using traditional sales incentive system based on quotas and commissions for frontline agents, while customer care representatives can benefit from bonus plans based on performance and customer satisfaction.
  • Split Incentives: Split incentives are the best way to reward a group of salespeople who work hard together to close a single deal. To use this approach, set clearly-defined rules of engagement, including team members' roles, team formation, and expected credits.
  • Omnichannel incentives: Let’s say one of your sales reps attracts a prospect through their social media activities and convinces them to buy, but the deal is closed in their absence. An omnichannel approach will help you trace the deal back to that rep and add it to their list of sales activities. This will help ensure sales reps are rewarded for all their efforts–not just the most visable ones.

10 Sales Incentive Ideas to Motivate Your Sales Team


Now that you know how to design your sales incentive program based on your specific industry and sales process, let's discuss what you should actually give as incentives. Should you give cash, swanky vacations, or company-branded swag?

How about real-world examples of sales incentives you can start using immediately?

We created this list of 10 sales incentive ideas to get your sales team excited and motivated to close more deals.

1. Cold Hard Cash

Cash incentives are one of the most popular and simple ways to motivate your sales team.

There is no shortage of bills to settle or things to buy in today's world—if only we had more money. That is why money is such a powerful motivator.

Here are some ideas on how to distribute cash rewards.

  • Commissions: In addition to their base salary, you can give reps a percentage of each new sale.
  • Bonuses: When reps meet or exceed their quotas, you can reward them with extra money to motivate them to work harder.
  • Pay raises: A-list salespeople are well worth keeping. Regular salary increases for your top performers will demonstrate to them that there is no ceiling to their potential. It's also a way to let other team members know that success is rewarded in your organization.Also, a sales leaderboard can be an extremely beneficial way to ensure transparency and reward sales leaders.

That said, don’t take for granted that your team prefers cash to any other kind of prize.

So, what other options are there for sales incentives?

2. Physical Items

Money might talk, but research shows material incentives can be more powerful motivators than cash prizes.

When asked to choose between cash-based compensation and non-cash rewards, employees often choose cash rewards. Non-cash incentives made them happier and more committed to their jobs.

Physical items such as gadgets, coffee makers, or musical instruments can boost the motivation of your sales team members and get teams excited about meeting their goals.

Some argue that money gets lost in the shuffle and doesn't really stay in the memory after it's spent. However, a musical instrument for a music buff will always remind them why they were rewarded. I'd also argue that certain physical objects can elicit strong emotions.

Consider physical items like these to incentivize your sales team:

  • Tech gadgets, such as a smartwatch or portable chargers
  • Fun products for the home, like a high-end coffee maker, 4K TV, or advanced sound system
  • Hobby products, such as high-end bicycles, rock-climbing equipment, or a musical instrument

3. Self-Development and Professional Courses

Self-development opportunities for employees have many benefits, including:

  • Employee upward mobility
  • Improved skill and performance
  • Increased productivity

The real question is whether employees want it and whether it is a good motivator for sales teams.

The answer to both is yes. According to TalentMLS research, 76 percent of employees say they are more likely to stay with a company that provides continuous training, while 66 percent say it improves their company loyalty.

On top of that, giving a sales team access to professional courses is a nonverbal way of saying you want them to be more valuable and thus retain them.

It also implies you’re preparing them for higher-level positions within the company, which can encourage them to work even harder.

Some professional development opportunities you can offer them include:

  • Special sales training from a professional coach
  • Ticket to an upcoming conference or sales event
  • Sales courses to develop advanced techniques
  • Workshops pieces of training and guides to make better use of sales tech, such as CRM training

Worried your team might feel like they’re getting rewarded for good work with…more work? The opportunity for personal development might also appeal to your team. Consider incentives like:

  • Cooking classes
  • Art classes
  • Fitness class membership
  • Access to an online course website, such as MasterClass

4. Gift Cards

Gift cards are another excellent employee incentive idea. A personalized gift card can make them feel valued and appreciated–and give them an excuse to spend money on items they might not splurge on normally.

It's important to determine what kind of gift cards will work best for you and your sales team, based on your company’s budget and the personality of your reps.

For example, giving a PS gaming gift card to a 50-year-old top sales manager may not be land well, while an under-30 sales team member might love it.

There are so many gift card ideas out there, from a gift card for an exclusive restaurant to a subscription box to a Mastercard, so find what works for your team.

5. Entertainment + Activities

Tickets to the big game. Front-row seats to their favorite band. A romantic dinner for two--these can be great incentives.

Entertainment incentives are good motivators because these are the things your reps would love to do but may not be willing to splurge for themselves.

Other ideas include:

  • Rock climbing
  • Sky diving
  • Bungee jumping
  • Zipline
  • Escape rooms

Travel incentives are another option. Research shows that travel incentives have a much higher ROI than other non-cash rewards since they produce a high level of motivation.

6. Extra Paid Time Off (PTO)

One of the best non-monetary rewards you can give a salesperson is additional paid time off. Sales is undeniably hard, and every hard-won deal means your company grows bigger and better.

Allowing reps some extra paid time off to spend with their families and relax will show your company cares about their work-life balance and mental health.

Additionally, it might inspire them to work harder and earn more paid holidays.

7. More Recognition

A salesperson who consistently meets and exceeds sales goals is a hard worker you want to keep around.

Shining a little spotlight on their ingenuity and hard work shows you notice (and appreciate) their hard work.

It’ll also serve as a reminder to their coworkers that hard work pays off in your company. According to a Bonusly survey, 65% of employees said they would work harder if they felt recognized by management.

Companies have gone as far as displaying their employees on a billboard in the city center to give them recognition.

You can do this by

  • Inviting them to a launch with the CEO of the company
  • Giving them a shoutout in the company’s Slack channel
  • Giving them awards, such as salesperson of the month or year
  • Appreciating them before the entire team

You could also offer recognition by offering:

  • A lunch with the CEO of the company
  • Specific praise in the company Slack channel
  • A Cameo video from their favorite celebrity that’s shared with the team

8. Office Upgrades

Want your reps to be more productive at work? Why not offer upgrades to their office as part of your sales incentive plan?

This is another great option for remote sales teams since each person has to set up their own office at home and may not be as willing to drop a lot of cash on expensive home office upgrades.

Office upgrade incentives could include:

  • Standing workstation
  • High-quality office chair
  • Noise-canceling headphones
  • Dual-monitor system
  • Lighting or other office accessories

9. Spinning the Prize Wheel

Can’t decide on a great incentive? Put a bunch of options on a wheel and let your reps spin it.

There’s something very exciting about spinning a wheel for the chance at a fantastic prize.

The mystery of not knowing what you’re going to get can be appealing, and the spinning of the wheel can be a fun event that adds to the recognition factor we discussed above.

10. Let Them Choose Their Own Reward

Your sales team is made up of individuals with distinct tastes, hobbies, desires, and needs.

Rather than selecting a single prize that may not appeal to all of them, allowing your reps to choose their own reward within a certain budget or limit allows them to choose what motivates them.

Indeed, you can encourage your reps to imagine what they would choose if they won at the beginning of the month, motivating them to work hard for that reward.

That being said, this is far from an exhaustive list of sales incentive ideas, but it is a good start. Now, let's go over some of the things you should consider when designing your sales incentive program.

How to Set Up a Sales Incentives Program

If you don’t have a standardized sales incentive program in place yet, it may be difficult to get started. But don’t fret. Setting up an excellent sales incentive program is fairly easy if you get the basics right.

Follow the steps below to build your sales incentive program on a solid foundation.

1. Ask Sales Reps What They Want

Every sales rep is unique, as are their personal needs. A trip to the Maldives might not excite a representative with tons of student loans to pay off, for example.

To know how you can best reward reps, have one-on-one chat with them to gain insights into their fantasies or ask them what they want.

If your sales team is small, this option will help you determine the best way to reward them. And if your sales team is large, the task can be shared among sales managers.

Understanding individual needs is just the beginning. To effectively manage your sales team and harness their full potential, it's crucial to have the right tools and strategies in place. This is where a robust CRM system comes into play. For more insights on optimizing your sales team's performance with a CRM, explore our comprehensive guide on "How to Manage a Sales Team Using Close CRM."

2. Create an Atmosphere Where Everyone Can Win

There will be laggards, core performers, and A-list players on any sales team. Be careful of only offering incentives to the very top of your list. Instead, design your sales incentive program so everyone feels adequately rewarded.

This can be a little tricky – you shouldn't constantly reward underperformers in the name of motivation.

Instead, consider implementing a team-based incentive system that rewards every team member for collectively meeting certain goals, regardless of each member's contribution level. Then, offer top performers additional incentives to give laggards a goal to work towards.

3. Use a Sales Team Leaderboard to Maintain Transparency

In a contest with an incentive at the end, transparency is key. You don’t want reps to waste time figuring out if they’re ahead when they should be focused on selling.

An easy way to provide transparency is with a sales leaderboard. In Close, you can create leaderboards automatically, showing how each rep ranks according to sales goals such as calls, emails, time on the phone, created leads, deals closed, and more.


4. Align Sales Incentives with Company Goals and Culture

Aligning your sales incentive program with your company's identity is one of the core foundations of a good sales incentive program. To some extent, this eases the financial burden.

For instance, a travel incentive could be at the heart of a travel management company's sales incentives. Given your level of access (and likely access to discounts) to travel packages, you can reward your sales team without breaking the bank.

If you are in EdTech, you can offer professional development, online courses, and so on.

That's not to say you shouldn't spice things up with other forms of compensation, like monetary incentives, but this can help keep the budget down.

5. Track Sales Incentive Metrics to See If Your Program is Paying Off

The only way to know whether your sales incentive program is working is to have measurable proof, crucial for effective sales performance management.

To assess the success of your sales incentive program, track these metrics:

  • Participation rate: The percentage of eligible employees who participate in the program by striving to meet goals is a short-term way to assess the program.
  • Redemption rate: You can also track performance by looking into the percentage of rewards or incentives claimed by employees.
  • Sales bump: This is based on an increase in sales that can be attributed to the incentive program.
  • Return on investment (ROI): The profit generated by the program in relation to the program's cost will tell you a lot about sales performance.
  • Employee feedback: You can also seek employee opinions on the program's effectiveness and overall satisfaction with the incentives.
  • Customer feedback: Ask for customer opinions on how the program has affected their satisfaction with your products or services.
  • Quota attainment: Quota attainment looks at the percentage of salespeople who meet or exceed their sales quotas and how frequently they do so after introducing the sales incentives program.

The Right Sales Incentive Program Drives Revenue

Building a successful sales program starts with hiring the right people and ensuring they're motivated to work hard. Offering the right sales incentives isn’t just a nice-to-have morale booster–in sales, it can directly impact your bottom line.

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