Keep in mind, we’re recommending a mixed sales incentive model that includes both performance and activity. By including activity, you’re helping the sales rep achieve a portion of his variable revenue. This only works in your favor if you’re incentivizing the right activities. You need to identify which activities move the needle in your business, then offer bonus goals around those activities. They might be phone calls, emails, or face-to-face meetings.
Find out what works for your business.
Then ask yourself, how many instances of that activity does it take to close and sale, and what’s my average deal size? Once you understand your conversation rates, it’s easy to define an activity-based goal for each sales rep that will help him achieve his specific sales goal.
But remember, above all else, the activity-based goal should be attached to a much smaller incentive than the sales-based goal. More than 10%, but less than 20% is typically a good range to stay in. It’s enough to motivate your team to action, while still leaving them hungry for more, which essentially ensures the reps will put their best efforts into the activities performed. The last thing you want is someone just going through the motions. That doesn’t close deals. You want your reps to have a passion for winning.
So there it is folks. I’ve broken down the key points you should consider if you’re looking to drive more sales through the pay for activity model. Obviously, I’m a firm believer in the mixed performance/activity approach. I apply it at every company I work for. It motives reps, and saves you money because there’s less variability in the event of overachievement, which makes it the ultimate win-win.