It really depends on the type of sales team you wish to build for your business. Incentives are effective at reinforcing behaviours and rewards are effective at reinforcing results. Most business owners would prefer to hand out bonus or reward pay connected to bottom line profits because it limits their risk. And yes, if results are imminent, then reward pay is a great way to go.
For most of us, results are not imminent. What if you are just starting out? Or repositioning your company and don’t have the brand equity or reputation you need to succeed in the market place? As a business owner you may want to take a serious look at providing your sales team with incentive compensation to drive specific behaviours that will work to develop a much stronger sales machine.
It takes a gutsy owner to put up cash to reinforce behaviour that may or may not be tied to certified financial gain. Here’s why it is a plausible plan.
If you are managing a sales team reinforcing specific behaviours can be really important. The manoeuvres involved in lead generation, creating a positive reputation and following-up are often tedious unrewarding activities that must be done with accuracy and tenacity to be successful. Incentive pay tied back to lead generation goals, data base building goals and follow-up goals can go a long way to paving success and momentum for a sales employee and their team. Paying for this behaviour is a clear indication of what is expected of the employee and works quickly to teach and indoctrinate new employees the habits necessary for a successful sales career. In results oriented environments where extra compensation or all the compensation is tied to a result – there is often a heavy staff turnover due to a lack of success.
Let’s face it, many business owners and sales managers are faced with the very large task of training new recruits. Why not give them an incentive to achieve smaller behaviour based goals that are strongly tied to company policies, procedures and best practices. This way you monitor performance by handing out incentive cheques. No performance? No incentive cheque this month. Nothing will drive home a message faster to a new employee than a miss on an opportunity to earn more money.