Setting the right goals for sales incentive programs

By: ITA Group

What you need to know

  • Effective sales incentive program goals strike the right balance between attainability and difficulty in order to keep participants engaged.
  • Asking key questions about participants provides the necessary data to determine how challenging sales incentive goals should be.
  • Meaningful sales incentive goals consider 7 best practices, such as clear communication and data-based iteration, to motivate all participants—not just top performers.

seven process icons next to a forward moving arrow representing best practices

Setting effective goals for sales incentive program participants is crucial for driving motivation, increasing engagement and achieving desired outcomes.

While advanced segmentation is critical in any incentive program, your program goals carry equal weight.

No matter how targeted your audiences are, if participants can’t meet the goals you’ve set for them—or if they meet them too readily—the program won’t be successful.

For example, think about inspiring CRM adoption in sales: If you set the goal too high, people won’t bother trying because they know they couldn’t make the goal anyway. Alternatively, if the goal is too low, your whole team will be raking in awards (and will go back to their less-than-effective ways soon after).

The secret is to find the right goal—not too high and not too low. But what’s the best way to go about that?

Related: Looking to refresh your program? Here are eight sales incentive program ideas that work.

Gather critical information before setting sales incentive goals

To find the right goal between “that’s too difficult” and “consider it done,” you’ll need to evaluate three things.

  1. Your objectives
  2. Your audience
  3. The balance between the two

Ask these questions before you start setting incentive program goals to ensure you’ve got the right information.

  • What is my business objective? Is it reasonable? Why or why not?
  •  What audience behavior needs to change for the incentive program to be successful? 
  • How did my audience perform against goals last year?
  • Is there sufficient training and support for my program participants?
  • How will I track and communicate goals? What is the message for each segment?
  • What would the financial impact be if I set goals too low or too high?

7 best practices for meaningful sales incentive goals

With the right information in hand, you’re ready to start setting goals. But keep in mind: goal setting isn’t a set-it-and-forget-it process, and it’s never 100% right the first try. That’s OK. Keep gathering data, iterating and improving on goals year after year, program after program.

To start setting meaningful incentive goals, follow these best practices.

1. Align goals to strategic priorities

Goals should fit with the incentive program’s overall objectives and the organization's strategic priorities. This alignment ensures consistent messaging and a cohesive participant experience.

2. Gather accurate individual historical data

Factors that aren’t necessarily evident in historical sales records can play a big role in proper goal setting. For example, if a participant had a different territory during the prior measured period, this information could impact what the right goal is for them. For new salespeople where you don’t have historic sales data, try using the previous salesperson’s numbers to get an idea of where to start. 

3. Set a minimum qualifier

This establishes a minimum result, or specific behaviors, that must be reached before a participant earns awards. It fosters engagement by making participants act before they can be involved in the incentive.

4. Avoid “double-dipping” 

Incentive goals should reflect incremental sales growth over base goals. Commissions are used to award base goal achievement, whereas incentive awards drive above-and-beyond performance.   

5. Communicate

Let participants know exactly what you want them to do. For top producers, it might be a 5% increase. For the next tier down, it could be 10%, etc. Clear, frequent communication about goals and awards is critical throughout the program to build engagement.

6. Keep an eye on your budget 

In a closed-end structure where only a set number of participants can win, the budget can be capped. In an open-end structure where everyone can win, it’s more difficult to predict award payout because there’s a variable number of winners. Regardless of structure, goals should be perceived as obtainable and focused on recognizing more than just top performers.

7. Iterate and improve

With the historical data you’ve gathered from your incentive program, take note of what worked and what didn’t, then include those improvements in the next program you run.

Goals are the ultimate springboard for success in any earning structure. Investing the time to analyze, communicate and monitor smart, strategic goals will pay off in program momentum and better ROI.

Looking to drive motivation, increase engagement and achieve your desired outcomes? Download the Ultimate Guide to Creating High-Return Incentive Programs.

download our ultimate guide to creating high-return incentive programs
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