We scan new podcasts and send you the top 5 insights daily.
Your compensation plan covers the final outcome (quota). To improve performance, use SPIFs and competitions to incentivize the leading indicators—the daily activities like cold calls, research, and outreach. Motivating these input activities has a direct, positive correlation with achieving the final target.
Top performers are already intrinsically motivated. The biggest opportunity for improvement lies with the middle 90% of your sales team. Well-designed gamification and incentives can lead to a 59% performance increase specifically within this cohort, significantly lifting overall team results.
To powerfully reinforce desired behaviors, compensation plans must connect the reward as closely in time as possible to the sales activity. This "proximity principle" is more effective than distant, larger payouts because it creates a clear and immediate link between action and incentive, even if the initial payout is smaller.
To combat early discouragement in sales, create leaderboards and rewards for leading indicators like 'most doors knocked' or 'most calls made.' You can even award a prize for the 'biggest cuss out' to gamify rejection, creating early wins and de-stressing the process.
Instead of focusing solely on quotas, hold reps accountable for controllable inputs and behaviors, like the number of sales calls. This approach provides clear data for coaching and pinpoints the root cause of performance issues, rather than just judging the outcome.
Instead of rewarding only the top performer, give reps a lottery ticket for each desired action (e.g., booked meeting). This gives everyone a chance to win, dramatically increasing engagement from the typically disengaged middle performers who know they can't consistently beat the top reps.
To unlock powerful intrinsic motivation, leaders should connect sales activities to reps' personal ambitions, like saving for a child's college. This personal "why" creates a deep-seated resilience that corporate targets alone cannot provide.
To align teams with strategy, compensate them for performing specific activities you hypothesize will lead to success (e.g., discovery calls), not just the final outcome (e.g., revenue). If the activities don't work, it's a leadership failure, not an employee one.
Viewing quota as a lagging indicator, Figma's CRO warns that managing to the number creates "lazy leadership." Performance management should instead center on a detailed framework of inputs: behaviors (e.g., collaboration) and competencies (e.g., discovery skills), giving a real-time view of a rep's effectiveness.
In a tough market, sales results slow down, which can demotivate a team that thrives on closing deals. To counteract this, leaders must shift their rewards. Instead of only celebrating wins, they should actively and publicly celebrate the consistent daily activities and behaviors that will eventually lead to success.
Sales compensation is the most powerful lever for changing a sales team's behavior quickly. More than training or directives, incentives tell reps what they are supposed to do and why, directly shaping their daily actions and strategic focus.