What are sales incentives?
Sales incentives can be any kind of compensation or reward provided by an employer to drive productivity, more specifically, the selling of goods or services. And sales incentives have evolved over the last 25 years, as all things to do. If you could take a time machine back to the 1990s and join a sales team, there would be a 25 percent chance that your compensation package would include some kind of non-cash reward. Today, that number has jumped to more than 80 percent. The reasons for this trend lie in the psychology of work and reward.
The Nature of Compensation: Expectation vs. Extra
Basic compensation—salary or wages—is a cash arrangement. An employee performs specified tasks, and in exchange, they receive an agreed-upon amount of money.
When you offer money as a sales incentive, employees tend to see it as part of that basic compensation package. Maybe they had to reach a certain benchmark to get that bonus, but it still goes into the same cash pools as their paychecks.
People are used to spending their paychecks on things that they need, not things that they want. If a student loan needs paying off or the kids are asking for new school clothes, an employee is unlikely to spend a cash bonus on a fun experience or luxury item. That bonus will probably be appreciated, but it won’t be exciting.
Non-cash rewards are different.
No one can decide to pay bills with a pizza party or outing to a local ballpark. Employees are free to enjoy these experiences without guilt, and that automatically makes them feel special.
Choosing Your Sales Incentives: The Value of Culture Fit
Non-cash rewards are proven to work. They generate more revenue per dollar invested than a cash incentive program—simply because they motivate more effectively. They’re memorable, tangible, and outside of a person’s daily routine.
But be careful—there’s no such thing as an incentive that works for every team. The ski weekend that doubled productivity for your colleague’s team might not motivate yours at all. Even within a team, people have different value perceptions of the same item.
There’s no need to take a chance and offer an incentive that might not work. Find out what your team likes before choosing a direction to go in. Take a survey or have a meeting. Then choose one incentive type or several. As long as every person on your team feels motivated by at least one of the offerings, the program will do its job.
Not sure what to suggest? Here are 18 creative sales incentives from three basic categories: exciting experiences, valuable services, and tangible prizes. All of which could be considered corporate perks.
Time and again, research has shown that experiences make people happier than possessions do. A 2014 study suggests the reason is because happiness from an experience is longer-lasting—a counter-intuitive concept, considering that experiences are by nature less permanent than items.
Scientists have found that people enjoy anticipating and reminiscing about an experience more than they enjoy waiting for and then having a possession. Possessions tend to fade into the background, taken for granted, while past experiences continue to be cherished.
1. Group incentive travel is one of the most effective team prizes you can offer. Whether your team members are into outdoor adventures or urban exploring, you can design a trip that suits their tastes perfectly.
As an added bonus, a group travel adventure is self-promoting: winners post pictures on social media and swap stories about their experiences in the office, piquing their colleagues’ interest and motivating them to work harder for the next trip.
2. A paid lunch or dinner out for the whole team is a traditional but still effective reward. The group pizza party is a classic for a reason. Everyone loves free food, especially when it’s a whole meal that you don’t have to cook. But the experience of going to a restaurant is where the real excitement happens.
When you send your team to a restaurant, they get to sit down together and interact. It’s great bonding time with no responsibilities and no hierarchy—just the opportunity to be social. With a “no shop talk” rule, the experience can feel like even more of a break.
3. A weekend (or weekday) outing brings the old idea of the company picnic into the 21st century. Maybe your team would love a set of tickets to a football or baseball game. If not, perhaps a day at a local theme park with a privately catered lunch would be more their style.
This kind of event is particularly special if it’s possible for it to take the place of a day or half-day of work. If that’s a no-go, including a few surprise experiences can also make it feel special.
4. Travel vouchers let you carry incentive travel over to the individual level. Vouchers let you reward high-performing individuals while giving them the thrill of planning their own trips—which, for some people, is part of the fun.
The ability to show off trip photos is another fun aspect for travelers, and travel vouchers make that happen as well. Employees can post about their experiences on social media and talk about them at the water cooler, motivating other employees to work hard for the next voucher.
5. Tickets to local events are similar to trip vouchers, just on a smaller scale. People don’t always treat themselves to concerts, theater, or live sporting events, often missing out on these occasions due to time and money constraints.
Like trip vouchers, event tickets also come with bragging rights and special memories that spark motivation in the recipient’s colleagues.
6. A surprise half-day of work gives people a thrill, especially if it comes with a movie ticket or other incentive to enjoy the rest of the day.
Unexpected time off work is exciting, but many people will end up spending that extra time doing errands or catching up on housework. If you provide someone with built-in plans when you send them out of the office, they can escape responsibilities without guilt. The experience of watching a team member leave, and then hearing about the free afternoon later, can motivate the rest of the team.
7. Extra paid time off lets employees plan their free time in advance. That works better for some people and some teams, and it allows recipients to compound their reward time for longer breaks. Use this alongside surprise time off or as an alternative.
If your team likes experiences, they’ll probably love services too. Having someone do something for you is an experience in itself, and it has a ripple effect that reduces stress and makes life a little easier.
8. A professional massage feels like an indulgence, and it relieves some of the pressure that kills productivity. Help your employees unwind by hiring a massage therapist to visit the office. Or, pass out gift certificates to a local spa when your team hits a certain production level.
9. A gift certificate for a cleaning service tells people you appreciate their hard work. It encourages them to relax by taking away some of their outside-of-work responsibilities and helping them to improve their work-life balance.
Personal and professional growth
10. Language learning or adult education classes are great sales incentives for ambitious and performance-oriented professionals. They send the message that you care enough to invest in your team members as individuals, not just as workers. That makes recipients feel valued for more than what they can contribute to the company.
Recipients of these incentives may pursue goals or learn skills that they have previously put off for practical reasons. Because the incentives are paid for by the company, employees don’t need to wonder what more “sensible” investments they could be making.
11. Convention or conference tickets combine the excitement of travel incentives with the practical benefit of course reimbursement. They highlight the connection between high performance and continuing education while making education more appealing.
Professional development incentives benefit your company as well. Attendees bring back new contacts and insights into what’s happening at the cutting edge of your industry. The company gets the knowledge and the employee gets the status associated with presenting it.
12. Mentoring time with a manager, CEO, or local industry leader is another way to connect development with performance. As you give out your reward, you’ll be helping the recipient take their career to the next level. This can be extremely motivating for team members who see themselves in the boss’s chair one day.
Material gifts will always be valuable, partly thanks to the perennial appeal of getting something for nothing. If it’s something the person wanted but couldn’t justify buying for themselves, the item will seem even more valuable.
Your incentive gifts can be work-related or not, depending on what resonates better with your team.
13. Standing desks, ergonomic chairs, and other office furniture upgrades are great perks and serve as tactile ways of telling your team that you value their comfort. You can structure this incentive as a group benefit —everyone gets new chairs if they reach a certain goal—or set up a points system where individuals get certain upgrades when they hit particular milestones. If there’s something to reach for, people will reach for it even after achieving one reward.
14. Prime parking spots are popular incentives because they don’t cost the employer anything but still have a high-perceived value. If you have a lot of non-car commuters, you can restructure this incentive to include things like free transit passes or bike upgrades.
15. Upgrades to workplace common areas improve the working environment just like workstation enhancements do, but they inspire more of a sense of fun and excitement—if done right. You’ll have to think in-depth about your team culture. Are you more “healthy snack vending machine” people or “video game station” people? When you get it right, you can really improve group motivation.
16. Personal tech devices appeal to almost anyone, and it’s relatively easy to develop a tech giveaway strategy that suits your budget. You could:
- Offer a single high-ticket item for reaching major milestones or achieving important goals
- Provide a catalog of prizes, each connected with a different achievement
- Start with a smaller-ticket item and let people work their way up to a larger prize
You can always alter the structure to suit your team.
17. Redeemable tickets let people choose their own prizes. If your team appreciates this kind of autonomy, consider a value-based incentive system.
In this kind of incentive program, people receive appreciation tickets that they can collect and redeem. Recipients can turn in a few tickets for a small prize or save them up for a larger prize.
As the program leader, you determine how people earn tickets. You could offer them for:
- Achieving sales goals
- Completing a certain number of cold calls
- Advancing a customer to the next stage of the sales funnel
You decide qualifiers and giveaway structures based on what your team sells and how they sell it. If you’re not sure what to choose, consider asking your team about challenging milestones that they would like motivation to hit.
13. Subscription boxes are all the rage in the consumer market. Over the past five years, subscription sales have more than doubled. Now, 15 percent of online shoppers have a delivery subscription of some kind.
It’s easy to encourage a sense of agency with a subscription box incentive. Let your team choose the box that suits their interests. There is an almost limitless range of possibilities, including:
- Meal services like Blue Apron
- Clothing subscriptions like Stitch Fix
- Special interest gift boxes for hobbyists, pet lovers, parents, and more
If you choose options that renew every year, people will work hard to keep them active.
A Final Word
Now that you have some ideas for new incentive programs, start thinking about which will be most effective for your team. Whether you choose to reward entire teams or individual high performers, your employees will have a new reason to put in an extra effort.