Are Sales Incentives Still Effective?
For every business to succeed, they must stay abreast of trends and changes in their industry. This will enable them to harness the power that these advancements have to offer, in addition to positioning themselves as an industry leader. The sales incentive industry has already shaped the way companies are now approaching incentive programs. Still, as the business environment gets increasingly complex, companies need to take their incentive strategies and toolkits forward.
Many of the newly developed practices will continue into 2020, so it’s important that companies strategically position themselves to take advantage of the opportunities. In this post, we’re going to examine the top trends that we believe are likely to affect businesses and the way they will empower their sales staff in 2020.
1) Adaptation of sales incentive strategy to the changing environment
With increasingly complex products that sometimes require multiple touches with several company representatives before a purchase, longer buying process, wide adoption of e-commerce, and utilization of inbound sales and marketing strategy, many companies can’t use traditional sales attribution models effectively.
Many businesses have been implementing incentive programs for all staff throughout their organization, including team members who are not necessarily in a sales role.
In view of the above, the McKinsey experts had offered new actionable attribution models for such companies:
- Addition of specialized sales roles
- Adoption of team-based selling
- Creation of new digital channels
Based on this classification, the McKinsey experts offer novel sales incentive schemes, summarized in a compact visual chart:
The variety and complexity of new sales incentive strategies make managing them “in a spreadsheet” impossible. That encourages companies to adopt specialized IT sales incentive solutions that meet contemporary requirements.
It’s expected that given the tangible and visible benefits noticed since 2019, businesses are going to invest even more in these solutions for 2020.
2) Globalization of sales incentives
There are more remote workers now than ever before, and this trend is going to continue to grow. This means that incentive programs now have to find ways to bring people together who are potentially working from different parts of the world. Globalization means that the complexity of designing and delivering such incentive programs will increase, so companies should plan well ahead to accommodate.
3) Gift cards are not losing ground
Digitization has also permeated every industry, as it has with sales. Many delivery channels are now digital, and workers now perform the bulk of their work on digital platforms, which means that many workers already expect their incentives to be digital. One great option for digital gifts has become the use of gift cards, which is steadily on the rise. According to the Incentive Research Foundation, gift cards continue to be widely used, with median gift card amount remaining at $100.
4) Shift towards mobile platforms
Using a mobile-friendly incentive solution is vital for program owners to reach a broader demographic. The mobile interface is definitely preferred by the representatives of Millennial and Gen-Z generations as a tool for receiving feedback from their managers, providing peer-to-peer recognition, or checking and redeeming earned non-monetary rewards. Most sales reps and channel partners are constantly on the go. Mobile solutions are a MUST.
5) Further adoption of AI
Artificial Intelligence has made its way into sales incentives from around 2018. Similar to other business verticals, AI is used for the improvement of operations through automation in a multitude of processes. Its ability to deliver a clear value leads to demand growth and makes it more affordable for businesses than in previous years. It’s also expected that AI improves analytical tools by delivering more insights from collected data on the demographic and behavioral patterns of the sales staff. However, the utilization of a vast amount of data requires organizations to be careful about how they use and store it to ensure everyone’s private information is kept safe.
6) Wellbeing incentives become even more relevant
Wellbeing incentives that gained popularity during 2018 are becoming increasingly popular. The best practices start to crystallize out from all the projects implemented by companies from different industries before 2020, so now experts know much more about keeping employees happy, healthy, and energized to help you achieve your business goals.
7) More focus on ROI
The realities of 2020 force companies to pay particular attention to the profitability of each component of their sales incentive programs. In this situation, it is important to avoid oversimplified interpretation of ROI.
While sales growth remains a central indicator of a successful sales-performance program, it’s important not to lose sight of its secondary effects. Secondary doesn’t mean low-priority. For example, such indicators as employee engagement rate, employee retention, customer retention are clearly impacted by specifics of an incentive program. They definitely can’t be rated low on the priority list.
Taking advantage of the sales incentive trends in 2020
Making yourself aware of industry trends as you plan for your 2020 employee rewards program is just one part of the story. Organizations need to position themselves so they’re able to take advantage of these trends. Businesses need to have a robust incentive management system to stay ahead of the complexity that widespread adoption and globalization brings with it.
The truth is that taking advantage of sales incentive trends is not an easy job. An organization must tailor their incentive program to suit their business needs and objectives. One incentive partner that can help businesses to properly take advantage of incentive trends for all employees is Online Rewards. With several years of experience helping businesses reward their employees and improve satisfaction, Online Rewards can help you design the right incentive program for your organization.