Effectiveness in
Sales Incentive
Programs
Executive Summary
of Global Trends
June 2012

Challenges Solution Testimonials Conclusions
Most typical challenges
about sales incentive programs
1. Related to the current economic situation:
• Strong effort to have a full control of the budget
• Focus on maximize the customer relationship due his ability to change supplier
2. Related to the sales people/channels:
• Doesn’t fit in all people needs
• Unachievable goals or just a few people can achieve goals
3. Related to the programs:
• Even still expensive, sales incentive programs are strategic
• Cash or non-cash rewards?
* Source: Incentive Marketing Association
2

Challenges Solution Testimonials Conclusions
Flexibility on reward choices
First time 4 different generations are working together*:
Traditionalists: Baby Boomers:
(b) 1910 – 1945 (b) 1946 – 1964
6.5% 41.5%
Gen X: Gen Y:
(b) 1965 – 1978 (b) 1979 – 1988
29.5% 22.5%
Each Generation has distinctly different: Life Influences, Work Tendencies, Values & Ideals,
Cultural Backgrounds, Definitions of Success, Goals & Desires, and Behaviors.
So, each generation has different distinct motivators.
* Source: US Performance Improvement Council, July 2008
3

Challenges Solution Testimonials Conclusions
Why to incentivize Gen Y people
Gen Y: A rewards and incentives system is an
(b) 1979 – 1988 absolutely fundamental requirement in the
modern workplace. The reasons are:
22.5% of working population  Retention: if an organization does not have
but majority on retail jobs an integrated rewards and recognition
 they are ambitious function within their business, Gen Y’s will
move to an organization that does.
 they are hardworking
 Gen Y employees are rewards driven,
 they are technically savvy which means that they are inspired and
motivated by objective and consistent
 they are outcomes driven recognition of their success.
 they are short-term focused  The implementation of a rewards and
incentives strategy will thus act as a lever to
 they are reward driven reduce Gen Y employee turnover rates.
4

Challenges Solution Testimonials Conclusions
Performance of incentive programs
US companies invest + $115 billion annually in incentive programs,
$27 billion spent on travel and merchandising but most of them don’t have clear ROI.
Key findings on US survey:
 Incentive programs improved performance by 22% for individuals and 44%
for teams
 Longer time programs are better: 42% performance increase when program run
for a year or more, 31% for running six months or less and 18% for a week or less.
 Implementation is very important: 98% of executives complained about operations
 Quota-based incentive measures and open to everyone programs work best
* Source: White Paper from Site Foundation
5

Solution Testimonials Conclusions
6 steps to succeed in Incentive Programs
Gap analysis between company goals and
Assessment
individuals performance
Selection Select what is the right program and metrics to measure
Setup infrastructure supporting sales
Setup
organization and channels
Training & Develop, create and establish initial training
communication & regular communication
Incentive program launch
Program launch
and support
Continuous results tracking and
Results & ROI
ROI analysis
* Source: Incentive Marketing Association
6

Solution Testimonials Conclusions
Maximize your sales investment by
rewarding the value in the sales cycle
Reward the right behaviour of your sales people or teams when it’s crucial for
your business at the time you require a higher impact
Demand
Prospection Needs
generation Solution
identification Negotiation
design Post
& closing sales
Metrics to
encourage Customer Revenue, Up sell,
Deal Opportunity Engagement profit, growth
Cross sell
Activity registration management
results
7

Solution Testimonials Conclusions
Maximize your partner investment by
rewarding the value in the partner lifecycle
Reward the right behaviour of your partners when it’s crucial for your business
at the time you require a higher impact
Partner Partner Partner Partner Partner
recruitment engagement ramp up sales Retention
· Business Plan · Product launch · Sales individuals · Cross sell, up sell
participation
Metrics to · Deal registration · Services
· Training
encourage certification · Demo units
· Sales targets · Customer
· Specialization · Joint activities satisfaction
8

Solution Testimonials Conclusions
4 Psychology effects on non-cash rewards
1. Higher value perception: Non-cash awards have positive attributes associated
with the award and it is ascribed a higher value.
2. Rewards on performance: Non-cash incentives tend to be kept separate from
compensation, thus standing out as rewards for performance
3. Power to motivate: When a non-cash award is something that a participant would
not purchase with cash on his or her own, the participant can justify the award.
Being able to justify the award means it has greater power to be motivational.
4. Social reinforcement: Non-cash incentives have
trophy value and are more likely to be acknowledged
than would be the case if the award were in cash.
* Source: Site Foundation
9

Solution Testimonials Conclusions
5 conditions for sales incentive programs
Five conditions when sales incentive programs work best:
1. Current performance is inadequate
2. The cause of the inadequate performance is related to deficiencies in motivation.
3. The desired performance type and level can be quantified.
4. The goal is challenging but achievable.
5. The focus on promoting a particular behavior
does not conflict with or override everyday organizational goals.
* Source: US Performance Improvement Council
10

Testimonials Conclusions
Proven profitability results
11

Conclusions
key findings for the effectiveness
of your sales incentive program
 Incentivizes individuals considering all ages and diversities
 Long run programs, easy to launch, open to everyone
 Assessment and measurable metrics to track ROI
 Training and regular communication of the program
 Reward the value in the sales cycle / partner lifecycle
 Reward on your behavior interest
 Non-cash rewards considered as trophies
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