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Discussing sales challenges with our customers, the issue of incentive models usually end up in the “top 3”. Usually the reason is that customers feel that they can not realize the full potential of their sales organization. In addition, many have previous experiences with incentive systems without desired effect. Everyone needs a a system, but few have an effective one.

Important to understand is that an incentive model can never be a standardised solution ready to implement. An incentive model must always be customized, to the existing organization, and to the unique conditions that exist. To develop an incentive model, you can assume four guiding principles which are proved important in our previous research:

connect incentives to the right kpi

“What gets rewarded gets done”. Well functioning incentive models take into consideration what needs to be done. Incentives should stimulate wanted behaviours in the sales force, that contributes to revenue and helps making the right priorities.

map the motivational drivers for your sales people

Good incentive models take into consideration those incentivized. It is crucial that sales people are matched with the right incentives. To do this you need to identify the motivational force for each sales person.

offer competitive compensation and benefits

There is a war for sales talent, sales people are in fact among the three professional groups that are most difficult to recruit, according to Manpower. To secure supply of sales talent, it is not sufficient to connect incentives to the right KPIs, and adapt it to the sales people. You also need to secure that compensation and benefits are at a competitive level, i.e. in line with what your competitors on the labour market offer. Stay updated on current levels for the type of professionals you employ.