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6 Tips for creating a sales incentive structure

by Alinamass
sales incentive structure

A sales incentive program can be a powerful tool to not only get the most out of your sales team but seeing tremendous growth in business. A sales incentive structure helps in planning out how the incentives should be distributed to the sales representatives and for other added benefits. If you are thinking of incorporating incentives into your sales program, here are some tips that will help you curate the best sales incentive structure for your business.

Tips for creating a sales incentive structure

  • Motivate the right sales behaviours

Not everyone in your sales team will be a top performer. Incentive compensation plans need to be structured in such a way that it encourages mid-and low- performers to work harder and exceed their expectations. This is also necessary as it aligns the efforts put forward by your sales team with the overarching company goals and ensures that they can prioritize their work effectively and know what’s expected of them.

  • Find the right commission structure

There are different ways in which you can compensate a sales rep and motivate them to close more deals. It can be a revenue commission structure where the sales rep earns a percentage of revenue from every closed deal. They can be compensated for the gross revenue, a tiering structure, or can even draw an advance against the commission.

  • Tailor incentives as per roles

Managers have different duties and sales reps have different duties. Hence it only makes sense to create a sales incentive structure that is tailored towards the duties and responsibilities of every stakeholder involved and gives them a personalized touch.

  • Benchmarking against industry data

Sales is a competitive and money-driven position. If you have a star salesperson whom you are paying less than the competitors. There is a big chance that they’ll jump ship if a suitable offer comes their way. Higher pay and variable pay structure are some of the biggest differentiators. That not only attract top talent but also help in retaining your existing sales force. Perform benchmarking against industry data to see how your competition is stacking compensation for its sales team.

  • Plan simple and be transparent

Keep your incentive plans simple. It will not only help you in boosting growth but will also help sales reps in clearly understanding. What they need to do and which deals they should prioritize to earn more money. Simplicity goes hand in hand with transparency. Your sales reps should be aware of what your business objectives are. Changes in the compensation structure, updated quota, and more so that they can plan their work accordingly.

  • Use technology to pay reps accurately on time

Manual processes can cause errors during incentive payment for sales reps. And are the biggest reason for the delay of payment for the agents. Using modern technologies, you can reduce the amount of time for compensation payout. And keep them focused on closing deals rather than doing calculations and administrative tasks.

Must Read: Sales Incentives for Call Center Employees

Benefits of a Sales Incentive Program


Sales incentive programs have the obvious benefit of motivating employees and jump-starting them to achieve the sales targets to earn the incentives. A sales incentive program helps the sales reps in understanding what their responsibilities are and what they need to do to be successful.

Increased loyalty

Sales representatives work really hard to make contact with leads and turn them into prospective customers. Incentives do not just give them extra monetary, or non-monetary, rewards for their efforts. It also increases their loyalty towards the company. Not just for closing deals, incentives for renewing subscriptions, referrals and more also motivate the sales reps to stay in one company for availing the perks.

Grows the bottom line

A sales incentive program is usually followed by a rise in the bottom line of the company and an increase in earnings. This is because salespeople put in extra efforts to close more deals. And hence more sales are done which leads to more revenue being generated.

Gives an edge in hiring

For sales reps, their work more or less remains the same in any company. Contact a lead, talk with them, and turn them into a customer. Apart from the base salary, it is the added incentives and perks provided by a company. That can influence a sales reps decision in choosing that company over others. Thus a meticulously planned incentive program can give you an edge for hiring successful sales reps.

As you can see, incorporating an incentive program in your business can provide huge dividends along the line. Sales reps stay motivated and focused on achieving their targets so that they can have a chance of earning that incentive. This is why it is important to plan a robust sales incentive structure. That addresses every pain point of a sales rep and provides incentives and rewards where it is most necessary.

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