Loyalist Channel Incentives depend on a loyalty system and are intended to encourage long-term sales growth. Whereas a Spiff Program is based on performance. Although both programs show some similarity, the way they function are clearly different. Despite how well thought out a Spiff program might be, you will always need to make changes to the original model. Nevertheless, the best and most structured plan needs to be monitored and revised. This happens a lot in the business world.
When you have spent days, months, weeks and even years putting together what you believe to be a masterpiece can suddenly change. “What is your next course of action, and what can you do to make your program better?
You will need to look at several avenues and the best place to start is with your incentive program. Perhaps it was a good plan, with all the right ingredients, but what was missing? In nearly every slow producing plan, there is a responsible culprit. If the plan worked before, and you had a different group of team players, it could be the team you have now. You need to know how to motivate a sales team.
Your sales team is the group that will propel your profits, entice potential customers, and make the sales. Their interaction with customers will determine whether your products move or stay. Convincing someone to spend money is hard enough. Without the right strategy, it is nearly impossible. Oftentimes words are not enough to light a fire, you must bring the right firepower. Develop a SPIFF Program that delivers the best incentive structure for sales teams and your organization.
Follow These Six Steps for Success
The first step is to develop a plan: Lay out your plan. Define your strategy and explain your pre-determined goals for the current year and the upcoming years. You should have a short-term goal and a long-term goal. Everyone should know what the main target is, how to identify how to achieve it, and what tools are available.
Do Not Overload Your Team with Too Many Key Performance Indicators
You want to keep your team motivated and focused, not guessing and confused. Short-term and long-term goals and the continual incentives are enough KPIs to get started. When sales teams have too many overlapping KPIs mistakes happen, motivation falls and the main objective is lost. The overall goal is to keep everyone encouraged and upbeat so they can work toward earning and maximizing their bonuses and compensation.
1. Review the Design and Cost and Benefits of Each Incentive Program
You can use three design options to motivate your sales teams:
- Give your team leverage power. Decide how much sales power you want to give your sales teams. If you are planning to increase their bonuses and compensation, you need to give them the right tools to make the sales. Leverage is a powerful motivator.
- Give your sales team the power to negotiate deals. This can increase sales and motivate every member of the team to aim for higher incentives. When sales teams have something tangible they want, they will work hard to get it. Your job is to keep them focused, informed and empowered.
- Give them your assurance. Letting your team take the lead in sales can increase your profits and retain new customers. When teams feel confident that they are trusted to make the best decisions for the company, they tend to radiate that confidence through their communication with potential customers.
2. Decide whether to divide the incentive individually or collectively.
This is important. However, teamwork should always be encouraged, and incentives should be equal for each member of a team. Creating individual incentives within teams could create unsavory rivalries. Each member has an equal chance of receiving the same base incentives for their efforts. Individuals that exceed the company’s goals should be compensated separately. This opportunity should be afforded to all team sales members.
Make sure that every individual sales team member knows how the incentive program works. The incentive can be commissioned or bonus structured. Structuring percentages metrics as bonuses and aggregate metrics as commissions and percentages tend to work best. Always include your target bonus.
Select Obtainable Goals: Make sure that incentives are available at every milestone. There should be an incentive for members that reach the first, second, and final step, before reaching the ultimate targeted goal. If sales teams’ members constantly work hard without seeing any compensation for previous achievements, they tend to lose interest. When teams lose interest, they lose their will to perform. The goal is to compensate workers for reaching their sales expectations while getting them motivated to work even harder. When a member reaches an achievable goal, it should be recognized and compensated according to your pre-determined incentive program plan.
3. Define Clear and Precise Expectations
Explain to your teams how the compensation and sales incentive model works. The program should be reviewed at intervals or after a set number of milestones have been met. This is your time to review the performance of your sales team and to further motivate them. Acknowledge both collective and individual achievements. Let the teams know how the sales end of the plan is progressing and how they can further help the company to reach its target. When everyone understands the vision of the business, and how they tie into that vision, it gives them a sense of worth and purpose.
4. Update the Incentive Program Structure as Needed
Assuming that your current program will continue to function as usual is a big misconception. Every plan, regardless of how successful you think it to be, needs to be evaluated, reviewed, and often times restructured. Making updates to an existing model is nothing new–but it is good business practice. There might be new information, new sales incentives and new strategies that need to be implemented. This means changing or revising old practices and implementing new ones, and combining both old and new practices. Whatever you decide, your sales teams need to know.
5. Treat Your Sales Teams like Partners
Merchandise does not sell itself. Nearly every sale made is made by a sales team member. Managers and owners are actually silent partners. The hard work and fast-talking is done by your highly skilled, highly trained sales teams. Good salespeople make things happen. They have a gift to draw in potential customers and turn them into lifetime purchasers.
When incentive programs fail, they not only affect the team members, but customers are losing out on some really great deals. In order for everyone to benefit from an incentive program, success must begin at the top. When companies can implement a sales plan that motivates, compensates and educates it becomes a model plan that needs to be followed, and continually monitored. A well-monitored plan will continue to provide all the elements your companies will need for future, successful campaigns and incentive programs.
6. Request An Analysis Of Your Incentive Program
As mentioned above, analyzing your incentive program’s performance on a regular basis and applying the consumer data gathered in an effective manner is an extremely important aspect of using Spiff programs to motivate your sales team. Contact Incentive Insights today to start an analysis of your incentive programs and begin motivating your sales team!