Incentive compensation blog

How to encourage your unmotivated salespeople to sell better with incentive compensation?

Written by Hervé de Riberolles | September 24, 2019

Did you know that salespeople called "soft belly" represent 60% of sales teams? These are agents that cannot be categorized as bad in terms of results. Generally, they are happy with little and position themselves far behind the elite. But to increase your overall figure, you have to motivate everyone and forget about anyone. In addition, it is better to motivate the 60% of soft belly to make + 3% than to motivate your 20% of stars to make + 10%.

Cornerstone of motivation, variable incentive compensation helps you start this soft belly and discouraged salespeople

Only one condition: the bonus scheme must be adapted to this situation.

AMEND THE INCENTIVE PLAN BASED ON THE CALCULATION METHOD USED

If your incentive pay plan does not motivate the 60% of your team, then it is inefficient and poorly designed. This is probably a too elitist plan that promotes your star sellers at the expense of the greatest number. Or, your undersized plan does not motivate anyone anymore. If the compensation plan only fosters these stars, the remaining 60% will tend to become discouraged and no longer seek to overcome themselves.

So you have to be careful in designing the bonus scheme. Depending on the chosen calculation methods, called computational engines, make appropriate decisions that will improve the motivation of your “soft belly”.

For Sales vs Targeted (SvT) objective bonuses, a payout curve should be established that accelerates around 100%. Maximize the progressiveness of the 100% -centered curve will pay more for the performance of your “soft belly” performance than the performance of your stars.

For a commissioning bonus where the collaborator gets a portion of a result they achieve, bring an "accelerator" to the average historical performance of your “soft belly”. You can also set up a payout curve with a concave shape. This one will pay then more strongly the progression of the “soft belly” than the progression of the stars. Your best salespeople will be always better paid than the “soft belly”.

For a ranking bonus divided among the employees of the same team according to their position relative to the others, it is advisable not to set up a too differentiating scale and to have a coherence between the various levels. For example, this type of scale is not recommended 1st: $2000 2nd: $1000 € 3rd: $500 4th: $450 5th: $400

 

 

 

FOCUS ONE TO ONE

This task, difficult to achieve but essential to effectively boost your "soft belly". Indeed, the profile of the "soft belly" is universal. In these unmotivated sales agents, you can find:

1. A senior who has lost motivation over the long term

2. A beginner wanting to progress gradually and preferring to focus on small turnover at the start

3. A specialist who missed his target and fighting against his competitors in a very competitive market

4. Etc.

These sales people do not face the same difficulties and do not produce important business results for different reasons. Thus, the success of your motivation plan focused on incentive compensation starts with the analysis of their individual performance.

This internal analysis, required, will be used to potentially redefine the KPIs assigned to each salesperson, with fairness and according to the level of each. Then, the method of calculation of variable pay compensation will have to be clearly explained to the salesman, so that he can himself evaluate thereafter.

 

STRENGTHENING SOLIDARITY TO BOOST THE “SOFT BELLY”

Unlike the top seller, the "soft belly" is not necessarily an individualist seller. He works very well as a team and having common goals to achieve with his colleagues motivates him.

Remember to include in your variable incentive compensation system a collective bonus or an exceptional bonus. Be careful that the last one does not exceed 5% of the annual salary. Indeed, the objective is to encourage the less good to copy the best practices of the best.

 

COMMUNICATING AROUND INCENTIVE COMPENSATION

The communication with your collaborators will be done around two axes:

• The first aims to make them aware of the incentive compensation system to which they are attached

• The second will provide them with the appropriate tools to self-evaluate and simulate their bonuses based on anticipated performance.

Primeum may assist you to communicate the incentive compensation through a unique interface. This allows your employees to see their earned bonuses and simulate their future bonuses on their personal page.