How’s your sales incentive scheme going? One of the biggest challenges we’ve observed is sales reps who don't understand how their incentive plan works. If your reps don't understand their commission scheme, the plan ceases to achieve its intent.

The importance of clear incentive plans

We’ve seen situations where reps get to the end of the quarter, receive an incentive, and say, “Oh, I didn't even realize I’d qualified. Thank you!” If that happens, you know the whole purpose of your incentive scheme has been lost. Incentive plans exist to motivate your sales team. They’re meant to be something reps chase, a bonus that drives higher sales and incentivizes reps to perform—not just a pleasant surprise.

The power of simplicity

The most effective incentive plans are so simple that a rep can work out their bonus in their head. Keep your incentive scheme simple enough so reps can say, “I know when my sales hit this target, I make 2% of all my sales, and I can calculate that bonus myself.” This simplicity makes an incentive plan more successful.

The pitfalls of complex incentive schemes

Sure, you can put lots of gates and conditions on a scheme, but if you do, it soon gets beyond the point where reps can calculate their bonus in their head. As soon as you introduce complexity, incentive schemes lose momentum and effectiveness.

Real-time tracking with Numerik

Numerik has a tracking solution where a rep can see what they're earning every day in real-time, including incentive schemes. Making those figures visible really boosts motivation. Some Numerik customers who ran incentive schemes before they used Numerik saw increased sales as soon as reps could see their earnings in real time and easily understand what their bonus could be if they sold even more.

Conclusion

Simplifying your sales incentive scheme can greatly enhance its effectiveness. By ensuring that your reps can easily understand and calculate their bonuses, you keep them motivated and focused on achieving their targets. Real-time tracking solutions like Numerik can further boost motivation by providing visibility into daily earnings and potential bonuses.

FAQs

What is a sales incentive scheme?

A sales incentive scheme is a structured plan that rewards sales reps for achieving specific sales targets or goals, usually through bonuses or commissions.

Why should an incentive scheme be simple?

A simple incentive scheme is easy for sales reps to understand and calculate, keeping them motivated and focused on achieving their sales targets.

How can complexity in incentive schemes affect sales performance?

Complex incentive schemes can confuse sales reps, making it difficult for them to understand and calculate their bonuses, which can lead to decreased motivation and performance.

What are the benefits of real-time tracking for sales incentives?

Real-time tracking allows sales reps to see their earnings and potential bonuses daily, increasing motivation and encouraging them to sell more.

How can Numerik help with sales incentive schemes?

Numerik provides a tracking solution that includes real-time visibility of earnings and incentive schemes, helping sales reps understand and calculate their bonuses, thus boosting motivation and sales performance.