When organisations review their sales incentive programmes, the discussion often starts with the question: “How do we get our sales team to sell more?”
I don’t believe that this is the right focus and a more thoughtful question might be:
“What behaviour do we need our sales team to demonstrate to achieve our strategic objectives?”
There’s a material difference.
Too many incentive schemes focus solely on revenue growth. The unintended consequence: Sales teams chase volume, discount unnecessarily, push the easiest products to sell, or focus on short-term wins.
The result can be lower profitability, frustrated customers and behaviour that doesn’t support the long-term goals of the business.
The most effective incentive programmes I’ve seen start with a strategic view:
- What are the organisation’s strategic priorities?
- What do customers genuinely need?
- Which products or services should be promoted at different times of the year?
- Where is the greatest value and profitability for the business?
- How do we reward the behaviours that achieve all of the above?
In sectors with seasonal demand patterns, such as agriculture, horticulture, manufacturing, construction and many others, this becomes even more important. The right product at the right time can be better for the customer and better for the business.
Sales incentives should never be designed in isolation. They should be aligned to strategy, customer outcomes, profitability and sustainable growth.
And before launching any incentive programme, it should be stress-tested through financial modelling to ensure it drives the intended behaviours and delivers the commercial outcomes expected.
The best incentive schemes don’t reward people for selling more. They reward people for helping the business achieve its objectives.
If you’re reviewing your sales incentive framework and would like an independent perspective, let’s chat.
Leanne Crozier – Director & Co-Founder