Most any businessperson would agree. It’s no different for salespeople, who live in the trenches on a day-to-day basis and who are motivated – strongly – by the next deal to close, the imminent payout and the high that comes from meeting or exceeding quota.
But according to new research, companies that use non-cash rewards and recognition programs report higher revenue increases – 9.6 percent as opposed to 3 percent who don’t – according to a report authored by Aberdeen Group and distributed by the Incentive Research Foundation.
To put it simply, organizations that provided non-monetary rewards and recognition performed better as a cohesive whole.
Here are some interesting stats gleaned from the survey of 291 companies:
-91 percent of sales professionals are motivated by individual financial compensation, but internal recognition for positive performance, 61 percent, also dominated motivators;
-64 percent of “Best in Class” companies incentivize rapid activity around a particular product, end of cycle push, or disposal of excess inventory using spiffs (immediate bonus for a sale) vs. the 48 percent of “Industry Average” companies and 38 percent, “Laggards;”
-Companies that adopted non-cash rewards/incentives report a 34 percent shorter sales rep time-to-productivity and a 10 percent shorter sales rep time-to-hire;
-Companies that provide non-cash reward/recognition saw a 1.6 percent year-over-year increase of quota attainment in a team environment; those who didn’t saw a 2.2 percent decrease.
“Perhaps the best lesson to be learned from this analysis is that professional sales staffs respond to measurable rewards and recognition much like other employees,” commented Rodger Stotz, chief research officer for IRF. “It’s not surprising to find that companies using such programs post better sales results.”
Melissa Van Dyke, IRF president, noted that an organization’s size does not hold as much weight as senior management’s buy-in to a non-cash rewards and recognition program. When a company has dedicated compensation resources built into its workflow, sales efficiency was reportedly much higher.
According to the report, 70 percent of “Best in Class” companies use a dedicated resource to manage sales compensation and incentives, freeing up sales reps to focus on achieving quota.
In conclusion, non-cash rewards and recognition as part of the sales structure must contribute to the overall operation of an organization, and carry across other lines of business. About 60 percent of “Best in Class” companies offer organization-wide, non-cash incentives for overall company performance, the report indicated.