Having an effective sales incentive program enables organizations to boost sales staff performance.
The auto industry is having a very productive year as dealers are on pace to move more than 15 million units nationwide in 2013. Part of the forecasted success is due to the sales incentive programs that companies are using to attract customers and motivate sales staff.
Businessweek reported that the use of incentives has increased in the auto industry. These strategies have helped the sector rebound from its low point during the recent recession, but the source noted that the effects may be short lived. Auto manufacturers are mostly using cash rewards to increase sales volume. However, the appeal of cash often quickly wears off and that is what is happening within the auto industry. While sales are good, they haven't changed much since November 2012.
Non-cash rewards improve incentive program results
Rather than offering cash incentives, Business 2 Community stated that companies should consider using interesting and desirable merchandise for rewards. Non-cash rewards don't lose value the same way that cash does. Each cash reward is quickly forgotten about as employees often come to count on the bonus as part of their salary. This means that companies need to continually increase the amount offered to generate the same amount of excitement. With non-cash rewards, employees are reminded of their performance every time they redeem them.
"The idea in choosing prizes for sales incentives is to give them [employees] something that is not only financially valuable, but that also conveys status and prestige, and that the sales people might not be likely to buy on their own," the source explained.
Non-cash rewards can also be personalized for recipients to make them more meaningful. When managers are able to offer something that is specifically chosen for each employee, there is additional motivation for the next incentive programs. These rewards don't need to be physical items, but can be various perks that make it easier for staff members to balance work with their personal lives. Extra vacation time or the ability to work from home can increase worker productivity.
When staff members are motivated to close deals, they often provide high quality service that builds brand loyalty. The more engaged workers are, the more income companies are able to generate. A recent study showed that for a 1 percent increase in employee engagement, firms saw a 0.6 percent rise in revenue. Having an effective sales incentive program enables organizations to boost sales staff performance to improve their overall performance.