Sales incentive programmes and turnover reduction

The most common mistakes in installing incentive programs often stem from three shortcomings on the part of sales managers:

Firstly, a manager's natural tendency is to assume that salespeople are motivated by the same things he or she is. This leads him/her to get together with other managers to plot out an incentive program with prizes or incentives that please them, not realising that salespeople are often motivated by different drivers.

A second, more dangerous source of error is the attitude that salespeople are not as important as management. Since becoming good at sales is often an intuitive process, many excellent salespeople do not have, or need, a strong academic background, while managers often pride themselves on their education. This can lead managers to emphasise their own sense of value in incentive plans, while attempting to discount to some extent the hard knocks methods and styles that salespeople often rely on.

The third most common source of incentive mistakes is mimicking the competition. Sales managers frequently design an incentive contest that matches a competitor's program. But if you want your sales force to be original and to outstrip the competition, then it stands to reason that your incentive program needs to be original and outstrip the competition's as well.

Keeping these points in mind, we have come up with the following list of mistakes often made in preparing an incentive program:

1. Trying to keep everybody happy
   
2. Failing to separate novices from veterans
   
3. Negative reward on high productivity
   
4. Targeting prizes toward the wants of the entire sales force instead of the high performers
   
5. Planning a contest with no sales force input
   
6. Leaving top management out of the plan
   
7. Being inflexible
   
8. Hoping for X while rewarding Z
   
9. Forgetting that good salespeople always work for their own good first, not the company's
   
10. Being a do-gooder