Who doesn’t love a little positive reinforcement? Creating incentives for your sales channel can be one of the most effective ways to motivate reps to work hard, sell more of your product and stay engaged with your brand. It’s easy to reward top performers with quick incentives, but that won’t encourage the long-term performance boost that you’re looking for. Incentives without a strategy are as good as a pat on the back—it feels good for a moment, but that feeling is fleeting.
To produce long-lasting results, consider these eight ways to align your incentive program with your company’s goals and other strategies.
- Communicate your business objectives to the sales channel.
The Strategy-Focused Organization states that “[a] mere 7% of employees today fully understand their company’s business strategies and what’s expected of them in order to help achieve company goals.” This number is even lower if you look at businesses that sell its products through an indirect channel, like dealers. With this in mind, think of the difference it would make if dealership employees knew what role they played in meeting the overarching brand goals and were personally rewarded for activities that move the company closer to achieving its goals… Engagement and sales would skyrocket!
- Reinforce the right behaviors. Consider those business objectives. Now, think: what behaviors would help achieve the bottom line? When you’re drawing out the details of your incentive program, develop the program’s requirements based on the behaviors that will deliver results.
For instance, if you are looking to better sell the value of your product to your end customer, reinforce the value to dealers first. Make one of your program requirements to take a selling course on your product or complete training certification. Then, encourage them to utilize this information when they face customers by incorporating customer satisfaction scores or mystery shopping results into the calculation.
- Create a timeline that matches the goal of the program.
Ongoing quarterly or annual incentive programs have proven to be effective in creating overall lift and increasing long-term motivation, while short-term or one-off programs are generally only effective in increasing sales of a specific product for the duration of the program. Choosing the right timeline plays a big role in the success of the program, but it is one of the most overlooked components.
- Compensate, but be budget-conscious.
One of the main reasons—if not the only reason—your sales channel will be enticed by the incentive program is the compensation. It could be monetary, a gift, a perk or a trip—or sometimes just recognition. The reward should be worth their extra effort, but it’s not necessary to break your budget. While it’s tempting to plan an extravagant incentive trip or costly gift to get the attention of your dealers, going over budget creates more of a problem than a solution, and you can reward and recognize your sales channel at any budget.
- Help dealers see how meeting business objectives will help them with their individual goals.
Communicating your company’s goals to your sales channel may not be enough; you’ll need to consider how achieving those goals will benefit them. For example, “If you sell X more of a product, you will make X% more a year.” “If your customer experiences the value of this product, it’ll boost your relationship and increase referral business.” “If you participate in these training courses, you will have industry-leading knowledge and deliver a better customer experience.”
- Provide dealers with feedback about their performance throughout program.
By announcing the top contenders throughout the program, you encourage those who are performing well, as well as those who want to see their name on the next leaderboard. To motivate more than just the top performers, consider also recognizing achievements based on increase percentage, in addition to overall numbers.
- Level the playing field.
While your top performers in your largest markets will contribute more to achieving your overall goals than top performers in secondary or tertiary markets, if sales professionals in smaller markets know they don’t stand a chance against the big city boys, the program will have zero impact on anyone outside of your major markets. When developing the program structure, factor in market size or product mix/availability to make sure that your program impacts dealers of all sizes. Taking this approach will undoubtedly increase the ROI on your incentive program.
- Adjust the program, if needed.
Throughout the program, it’s important to collect data about the program so that you can analyze its effectiveness during and after the program. For example, if one of the program’s requirements didn’t translate into a sustained or changed behavior, it’s okay to completely axe it or modify it for the following year and try replacing it with a requirement that may deliver the results you were hoping for.
Ultimately, an incentive program is put in place to engage your sales channel and motivate them to perform, but it’s also a way to create a stronger, closer OEM-dealer relationship. It demonstrates to dealers that the OEM is willing to reward sales professionals for their hard work and loyalty to the company. To learn about other strategies to improve OEM-dealer relationships, visit us at meetkinetic.com.