 | 10 Steps to Creating a Sales Incentive Plan That Inspires
James Feldman, CITE, CPIM, CPT, MIP
Certified Facilitator |
|---|
Too often, a sales incentive program is created in a vacuum. It
may be developed out of a desperate need to boost sales
dramatically. Or it may be a drive to meet year-end sales goals
in a "now-or-never" time frame.
So managers rush to put together an incentive program with too
little forethought. When the results don't meet expectations, it
is rare that the problem is perceived as the way the incentive
program itself was constructed. Worse, the incentive plan may
be blamed as the culprit.
In fact, incentive or motivation programs should be part of the
total marketing plan. They must make a worthwhile contribution
to increased sales and profits in order to be an effective part of
that plan. Like advertising, motivation planning is just one
consideration in a company's total marketing strategy.
Consequently, planned motivation cannot, and should not,
assume total responsibility for either sales and profit increases
-- or decreases.
As a marketing advisor who has handled incentive promotions at
companies like Hewlett-Packard, Toyota, and many more, I
recommend that corporate leaders use the following outline to
get the most out of planning a sales incentive program as part
of their total marketing plan.
1. Review your incentive history.
What did your company do in the past?
What do you know about the success or failure of the program?
If you ran the same program today, would the results be
different?
If the winners were given the same reward for the same effort
what results would you expect?
Did you receive suggestions or complaints that would make a
similar program run more smoothly? Would management
support this effort?
2. Define the role of the motivation program.
Who are the participants?
What end result do you anticipate?
3. Set objective measures for the program.
Is the anticipated outcome measurable?
Is it realistic?
Is it attainable?
4. Create an incentive strategy.
What is the business objective of the promotion?
Are you trying to move obsolete products or overstocks?
Are you trying to force greater stocking of a product or
introduce a new model?
What are the end results you want to achieve?
5. Review the objectives and strategies with management.
Make sure the support (non-sales) staff is involved.
Make sure all department heads understand this program before
it is presented.
Make sure that you can deliver the products that you are trying
to sell.
6. Now that you have objectives in mind, determine tactics and concepts.
Concepts are the creative part of the promotion. What kind of
theme or graphic representation are we going to utilize? Teams,
contests and competitions usually take on a competitive theme
of some form -- such as sports, races, Olympics, etc.
Make sure that you do not use a trademarked name or logo without
permission. You cannot call it the Super Bowl, Olympics or
Masters without risking legal consequences from the rightful
owners of the name. However if it is an internal program -- one
that is not widely distributed to the public -- there is a reduced,
but not eliminated risk.
7. Set a budget for your program and submit it as part of the total
marketing program.
What's the maximum potential cost of the awards?
Budget for a communications/promotion program to support the
awards.
What will the administrative costs be for tracking progress for
everyone in the incentive program?
Training is often neglected within incentive programs. How can
you sell a new product or introduce a new service without
training? Many companies offer a bonus reward for completion
of employee training, so that the importance of the education is
incorporated into the incentive reward.
8. Prepare the specifics of the incentive program.
When will the program begin and end?
Who will be the participants? Will support staff who are non-
sales personnel be included?
What type of program will it be? (e.g., closed contest or open-ended,
in which the more you sell, the more you earn.
The rules should be clear, simple, comprehensive. Anticipate
surprises.
Select a memorable theme that is appropriate, simple, exciting.
Choose the awards, using at least two from the list below:
- Travel: Group or individual.
- Merchandise.
- Recognition. (This should be in every program. It includes plaques, trophies, certificates, ribbons, etc.)
- Cash/cash substitutes. (This is not as effective as travel or
merchandise for sales personnel.)
9. Implement and track the program results.
Assign responsibility for tracking.
Provide reports to participants at each level, managers and
executives.
Fine-tune throughout the program.
Monitor fulfillment of awards.
Interview winners after they received their prize.
10. Debrief after completion.
When the program is history, ask for feedback from all levels.
What worked?
What didn't?
Create a brief report and add it to your company's knowledge
database.
When you have finished these steps, you will have created and
implemented a sales incentive program that serves the needs of
your entire company -- not just the sales force. Your experience
can be repeated in other departments, with adjustments for the
types of incentives that will inspire different segments of your
work force.
