Why Sales Incentives Are Important [What They Are & How They Fit Into Your Sales Strategy]
So you have an online vape shop business you’ve been working on for years now, and even though you make sales your sales are still not going through the roof as initially expected. You look at your sales team and scrutinize their capabilities and knowledge of the vaping industry but you can’t seem to find the fault.
You have a team of experts under you that knows what they’re talking about when it comes to vaping, in fact, they probably know more than you know, now that you think about it. Nevertheless, not only are they not meeting the expectations, but they are also leaving your company constantly to go work for the competition.
So, what’s missing?
In today’s fast-paced and uber-competitive world, salespersons are not incentivized by a mere salary they can fall back on when times are hard. Of course, that will never cease to be appealing to anyone who wants to work for a company, but people are also looking for a way to boost their earnings, whether it be in cash flow or otherwise.
That’s where sales incentives come in.
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What Are Sales Incentives?
A sales incentive is a reward offered to the members of your sales team for selling a specific product or service, or a specific amount of said goods or services. When designed well, a sales incentive strategy can lead to an increase in productivity, sales, and even revenue.
Sales incentives can take many forms. They can be cash or non-cash rewards that are given to the salespeople when their performance reaches a certain level.
But regardless of the type of sales incentives you choose to give out to your sales staff, a sales incentive is simply something that motivates your team to go to work and exceed expectations. When it comes to sales incentives, expectations are almost always tied to sales numbers.
If you’re still thinking that salary should be a big enough motivator for anyone to get up in the morning and do their work, then you are gravely mistaken. With sales incentives, you are sure to boost the morale of your team and enhance their performance.
How Do Sales Incentives Work? [Why Sales Incentives Are Important]
You probably don’t need an explanation as to how do sales incentives work by now or why they are important. But if the answer to those questions was not answered above, it serves us well to understand that motivation is not the only thing you are attacking with a sales incentive plan.
In some cases, an incentive plan is part of the standard compensation plan. Especially for salespeople. Which means they are strictly tied to the person’s monthly sales metrics.
Sales incentives work by offering an additional reason for your team to be motivated and perform day-to-day. But what are the different types of sales incentives your can plan to give out? Surely it’s not just monetary rewards.
Different Types of Sales Incentives and Sales Incentive Rewards
As mentioned above, sales incentives can take many forms, and even monetary rewards might be the most common and largely preferred of the lot, they do not stand alone in the pool of incentives. There are 5 different types of sales incentives that you can choose from to build this part of your sales strategy and we’ve laid them out for you right here:
When it comes to sales, there isn’t always a single goal. Of course, selling is always a central piece of the puzzle, but depending on the product or service your business sells, just selling is only one out of many elements of a sales strategy.
Sure, you are running an online vape shop, so of course, you have salespeople whose performance you can track in terms of sales volume. But if you do employ salespersons then they are likely selling to physical stores around the city and even around the country. This means their job does not stop when the sale is made, it also involves following up on customer needs, repurchase efforts, problem-solving and shipping solutions, and many many more.
Because of that, you might find yourself employing an array of salespeople whose roles vary widely. For that reason, you can’t incentivize everyone with sales numbers, you’ll have to design a sales incentive program that fits each role.
As discussed above, salespeople may have many roles. In some cases, those roles might have to synergize and work together on the same sale.
For instance, you have a rep in charge of sales for your top-selling e-juice brand. Then you have a second sales rep in charge of your top-selling vape hardware brand. Items that so happen to be sold together often, for which reason you have decided to sell them as a bundle.
This decision has increased your sales on both items, but it has also seen a spike in friction between the two sales reps. This is where a split incentives program comes in. Incentives can be split down the middle 50/50 or in other proportions. The key here is for both sales reps to agree to the incentives plan division beforehand so that way all the friction and unpleasantness can be avoided.
Depending on the product or service you are selling, you might have a variety of account types. More specifically, short-term and long-term sales accounts.
Short-term accounts are clients that make a purchase immediately after just a few minutes or days of looking at the product they’re interested in. Long-term accounts are clients that make a purchase after several days, weeks, months or even years in some cases.
As an online vape shop, chances are that most of your sales accounts are short-term accounts. But you might have bulk sales to other retailers that take a lot longer than just a few days. If so, then you might want to consider sales incentive ideas that work with different accounts and allow you to reward your reps at different stages of the sales cycle.
For example, if one of your reps focuses on long-term accounts and makes fewer sales each month than reps that handle short-term accounts, it doesn’t mean that the long-term rep is not doing their job well.
Once they close the sale the revenue they bring to the company might be even greater than all of the other accounts combined. But this doesn’t mean that they want to wait until the sale is closed to be rewarded. With that in mind, it’s up to you to create a sales incentive rewards program that fits each of your sales reps.
As the owner or administrator of an online vape shop, you surely understand better than anyone that there are several channels available for you to close a deal. Your main channel is probably your online marketplace. To that, you may add tools like automated chatbots, FAQ landing pages, and review websites.
But that doesn’t necessarily mean that your human sales reps are less important than your digital sales tools. While we are not suggesting that you reward both human reps and computers, we are suggesting that you created a sales incentive rewards system that takes into account the different elements of a sales strategy.
What we mean is:
Try to determine the role that your computer system plays in a sale and at which point during the sales process does your sales team take the lead. This will help you define an appropriate sales incentive that acknowledges the work that the rep has put into closing the deal.
Analytics-Based Target Incentives
It can be incredibly difficult to define what a reasonable, yet challenging sales goal should look like. On the other hand, it can also be difficult to understand how much work each of your sales reps put into closing a specific deal.
That’s where data management comes in. By tracking and analyzing data you can not only determine what your leading indicators should look like but also how much work each sales rep put into making a sale.
This is not meant to cut down on the sales incentive rewards you give out to your reps, but to properly reward them for their efforts, including those that might not jump out at you like the numbers on a sales sheet.
Sales incentives are different types of rewards that you can give out to your sales representatives based on their performance. Sales incentives rewards are usually tied to how the sales reps perform based on pre-determined leading indicators. While incentives are commonly cash prizes, they may also be non-cash rewards like professional development training, classes for a particular interest, entrances to special events, and many more. Sales incentive rewards help keep your team motivated to go to work and exceed expectations every day.