True, as others pointed out, it is helpful to understand what motivates each of your sales people.
However in addition, as you develop your plan, be clear on: - your goals (lead generation, acquire/build market share, increase revenue, or customer retention etc.)
- what your target market may yield - you don't want to offer incentives that over generate then have to back pedal later, so consider if you need some caps.
- scalability; ensure the company can actually deliver on the sales generated.
- frequency to pay out; largely depends on the goal
- how you will measure results; keep it fair; make sure measurement aligns with business results.
- visibility to the metrics - nothing loses sales people faster than the perception of being cheated on commissions or bonuses.
- flexibility - as business fluctuates ensure your plan does too
- churn - very clearly state how people get paid if/when they leave.
Different roles on the team may require somewhat different incentives to carry out the right behaviour (ie. find new customers, sell more X than Y, deliver excellent service, sell widgets, retain customer) consider if you want some team goals as well as individual, depending on what exactly you are trying to grow.
A good plan 'incents' the correct behaviour of your team to go after the right type of business/qualified customer/lead to accomplish your business goals.
Lastly, consider how you will modify plans or implement interim spiff programs as the company/business grows, so you can build expectation with the team up front on how you might implement a change in future.
I have helped leaders think through different components of incentive plans, I don't do the math but I know how to think it through. Happy to help.
That is simple. Meet with the people on your sales team and ask them what motivates them. Then build an incentive plan around what THEY TELL YOU will motivate them.
That will also show that you care about what they think.
spend time with your team. make them feel like they are not an employee they are a family. if you take care of your team they will take care of your company and based on that you should create incentive plan
The most important thing is to first treat them as part of your family. Then see what are they getting out of being a sales person, are they just getting base pay, commision or both? Do they get recognize or rewarded when they have the highest sale ex. throw a party, money incentive, sales person of the month, etc. You have to make them feel like they make a difference and that they get rewarded for what they doing. and as a leader set and example for them do sales yourself . if a general dare not do what the foot soldier do then how you expect them to respect and motivate to push 100% for you.
Don't complicate it. Your team is comprised of human beings, each of whom has their own unique set of motivators. Get to know them, really. Get naked. Figure out what makes them tick; one size shoe doesn't fit all.
A few other thoughts:
1) Carrot / stick mentality isn't a sustainable strategy for high-performing, kick-ass players. Throw it out of the window.
2) The secret to successful sales is rawness and empathy. Exemplifying this with your team, will motivate most of them to do the same.
3) Managing people: hire character; customize motivation; expect the world; believe unequivocally. Then, get out of the way.
4) Help people discover why they're doing what they're doing, and how that connects with your shared vision. Then rally them around it.
5) Take care of the person, not just the employee.
Then, watch them thrive. Hope this helps!
There is excellent advice in the previous answers to this question. A couple of cautionary points:
1. In my experience, sales teams follow a similar make-up of a few star salespeople who are knocking it out of the park, a large middle segment who are meeting quotas but aren't achieving superstar status (some want to, others don't - it's good to figure out who's who in this category), and a small segment that is struggling just to make quota. The superstars will perform well regardless and will likely obtain all incentive rewards you put in their path. If your incentive plan targets the middle range segment to start, the results will be a good indication of how well the plan is working. And you can adjust it as you go to accommodate the superstars and strugglers.
2. Picking up from point 1, don't make the incentives so hard to obtain or achieve that they become a disincentive. I have seen business owners do this under the erroneous assumption it will motivate people to reach higher, but all is does is demotivate and demoralize your sales people. Whatever incentives you offer, make them achievable while also requiring your "middle segment" sales people to go outside of their comfort zone. Best of luck! I'm happy to discuss further with you.
I sm a multi-certified business coach, 30-year sales guy where I built/upgraded 8 teams as head of sales for as many startups. My answer is coming from a different perspective than the others. I have found that your question makes a number of assumptions that are important to state up front.
Assumption #1 - You have hired the best salespeople to sell your solution. They must be curious, empathetic and a great cultural fit - that is, they believe what you believe about what impact you are making in the world.
Assumption #2 - You have designed, developed and follow a proven sales playbook that continues to improve over time.
Assumption #3 - You have trained each to meet a minimum bar before they are autonomous.
Assumption #4 - You continually train them to improve in all aspects of the sales process - awareness, interest generation, qualification, needs analysis....closing and negotiating.
Assumption #5 - You hold them accountable for all of the above.
"Train (sales) people well enough so they can leave, treat them well enough so they don't want to" - Sir Richard Branson
This quote can guide you on next steps. The best salespeople I have come across are motivated by the intersection of money and fulfillment. If you hire, treat and train them well, the incentive plan will become obvious. As long as it also intersects the needs of the company, you have a winner or are at least approaching a winner.
My last bit of advice is to involve them in all of the above but do not ask them to solve the problem for you.
Feel free to reach out to talk further. No charge for the first call.
I agree with Mike that getting their feedback is important. Other characteristics that your plan must have:
* Simple - Don't over-complicate. Make something that is mostly straightforward and easy to understand: $X per conversion, %Y of all revenue during first 3 month ...
* Aligned - Make sure the plan is aligned for the current objectives of your business. Is your target to increase customers as fast as possible ? Then pay per conversion. Is your target increase MRR and reduce churn ? Then pay an increasing % of revenue over a number of months ...
* Immediate - Any plan your devise, make sure that sales people get the pain or gain as soon as possible (ideally monthly). Plans where pains or gains are further into the future don't incentivize as much as near real time ones.