Sales incentives are great motivators, but knowing the right way to set them up is essential.
Not only does cash represent a nice bonus for a hard day’s work, but non-cash incentives are fun and can encourage team building.
Lastly, sales incentives should be aligned with your company’s values. If your incentives don’t reflect this, your sales team won’t be as motivated to work hard.
Cash Incentives are a Bonus for Hard Work
Many employees prefer non-cash rewards over cash incentives, such as time off or flexible work schedules.
This approach is popular among top performers, giving them more time for family and friends. Plus, it shows that a company values its employees enough to reward them for their efforts.
Whether cash incentives are best for your company depends on your goals. When choosing the right incentive for your company, acknowledge each employee’s hard work and understand what motivates them.
A great way to monitor and stay on top of these types of programs is to implement the best CSR software. Cash incentives can be very effective, but money isn’t the most powerful motivator.
Cash incentives have two main effects on an employee: the first is the obvious one: it motivates people to put in more effort. However, an incentive may be perceived as unfair if it’s not disclosed to employees.
It can also cause conflict between employees. This can result in a toxic work environment.
Non-Cash Rewards Encourage Team Building
Non-cash sales incentives are a great way to reward hard work and promote team building. Unlike cash, these incentives reward your employees more sustainably.
They can be in the form of catered lunches, dinners, or even just giving them their favorite snack in the break room. Even if they don’t pay off immediately, they will have a lasting effect on your team.
In 1994, Goodyear Tire & Rubber Company experimented with non-cash sales incentives. The company wanted to boost sales of new tires.
To test the effectiveness of this type of incentive, the company split 60 retail districts into two groups: one received cash incentives while the other received non-cash rewards.
According to Dan Ariely, the study found that, unlike cash, non-cash rewards elicited an emotional response in employees.
Product Incentives are a Fun Reward
There are many different product incentives, from a gift certificate to a fine dining experience. If you have a foodie in your sales team, a fine-dining experience is a great way to thank them for their hard work.
A tech incentive is another fun choice – a new laptop or fitness tracker may be just what they need to be productive. Salespeople who love to use new technology may appreciate a set of noise-canceling headphones to help them focus better.
Another great sales incentive is a cruise ticket. This incentive is sure to delight any salesperson’s sense of adventure. Or, you can give them a healthy meal subscription – a premium service that will deliver fresh meals right to their door.
A premium subscription to a particular service or product is also a fun reward for salespeople.
Travel Incentives are a Direct Investment in Your Bottom Line
Travel incentives are an excellent way to reward top performers and increase retention. Whether your rewards are a tangible award or a trip to a faraway place, incentives can significantly impact your bottom line.
Moreover, rewards are easily shareable on social media or by individual travelers. If you choose to give out cash awards, keep in mind that they are taxed at the value of the money. In contrast, travel rewards are not taxed if they are used for business purposes.
Incentives can help you boost your bottom line by increasing sales productivity. Incentives allow you to give your employees valuable time away from the office, which helps improve customer loyalty and sales.
Research shows that incentive travel programs can increase sales productivity by 18 percent, and their ROI can be as high as 112 percent. However, some travel programs can become costly and ultimately strain your company’s bottom line.
They Reduce Employee Turnover
According to a Mercer consulting study, an average U.S. company has a turnover rate of 22 percent. By providing meaningful incentives, companies can reduce that rate.
Moreover, employees given incentives may be more loyal to the company. However, such studies need to address whether sales incentives reduce employee turnover.
There are many reasons why employee turnover is a problem. One of the main reasons is the high cost of finding suitable candidates. Recruitment and training can take a long time.
Increasing employee compensation can help reduce turnover, but there are other ways to retain the best employees. For example, providing career development opportunities, flexible working hours, and compensation packages can help boost employee retention.
Sales incentives also help to improve morale among employees. By offering incentives for hitting sales targets, employers create a precedent for rewarding good performance and preventing high employee turnover.
Additionally, these incentives can increase the amount of revenue generated by employees.