Commission is Not the Only Incentive

For the majority of your sales reps, think about "sales cycle time" to keep them motivated.

In a previous post discussing compensation philosophy, I got several comments saying to only hire driven, commission-focused salespeople.

In theory, that works. Build a team of self-motivated, natural salespeople who set their own goals and need little active coaching, and you’re good to go. 

In practice, this rarely happens. Those self-motivated, self-disciplined salespeople are unicorns. The chances of you having a sales team with nothing but unicorns is about as likely as an NFL general manager putting together a team with Hall-of-Famers at every position. 

Even on a high-functioning team of individual performers, you’ll typically have a variety of people on the talent spectrum. To be scalable in a sales organization, you can’t plan on just hiring unicorns.

Unicorns are the top 10%. You don’t need to worry too much about their performance so much as you need to worry about someone else recruiting them away from you. Your job is to add value to their day-to-day.

More of your energy and focus needs to be on the 80% in the middle of the bell curve, which is where most sales reps fall. You need to design an environment where a better-than-average rep can make a better-than-average living. You also need to ensure that there’s very little reward for not doing the work – in other words, disincentivize laziness.

As for the bottom 10%, they probably shouldn’t be in sales in the first place.

The Impact of Sales Cycle Time on Incentives

How do you create the ideal environment for the 80%? With incentives that foster motivation and discipline among your salespeople. One key variable here is sales cycle time. I’ll explain… 

For most reps, motivation and discipline are important components of being successful, and a great way to help that is to create incentives for activities. This is especially true when you have a long sales cycle — with “long” being more than 60 days. Why? Because the further out a commission check is on the horizon, the harder it is for a normal 80% rep to focus on the activities today to reach that goal. (This doesn’t apply to unicorns.)

The further out a commission is on the horizon, the harder it is for a normal rep to focus on the activities today to reach that goal.

In the context of sales compensation and having a compensation philosophy, I like to include incentive dollars in my budget for daily, weekly or monthly sales activity incentives, which drive the behaviors that I know will get the results.

For example, referrals from current customers are a great lead source. We aren’t in the habit of always asking for referrals, so every so often we’ll create a week-long referral “contest” where each rep spends 30 minutes per day calling customers and asking for referrals. We tally them on the board, and at the end of the week whoever gets more than seven referrals receives a $50 Doordash gift card for lunch.

What we’re doing here is incentivising  activities that we know will drive the ultimate goal, which is closed deals and revenue. We take one piece of the sales funne (ie, current customer referrals), focus on it for a period of time, drive the activities, and, sure enough, our pipeline next month is filled with new referrals. 

There are a million different iterations of this. Mix it up, have fun, keep it light, keep track, and always circle back to when your team win deals to remind them where those deals came from – Remember that referral thing we did five weeks ago… see, it worked!

Other examples of activities you could base incentives from:

• Calls per day

• Appointment set

• Demos complete

• Contracts out

• Customer Connects

• Prospect Connects

• The list can go on and on…

Incentivize activity that drives the future result you want.

Action-based incentives are additive to commission, not in lieu of.

Sales cycle time matters. The longer it is, the more incentives you’ll want to create in the meantime to keep your salespeople motivated.