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10 Tips for Designing a Successful Sales or Recognition Program

IRF study offers 10 best practices for designing sales incentives and 10 more for all-employee programs


After analyzing several years of its research for patterns, the Incentive Research Foundation (IRF) has come up with 10 design elements common to effective reward and recognition programs aimed at salespeople, and 10 more for broader, all-employee recognition programs.

The result was its latest white paper, "Designing for Successes: Effective Design Patterns for Employee and Sales Programs."

With 84 percent of all U.S. companies using at least one non-cash reward and recognition program, "it is critical to understand how to create effective programs," says Melissa Van Dyke, president of the IRF. 

Because sales incentives are fairly distinct from employee recognition, the IRF looked at top-performing companies' program designs and came up with these common elements.

In employee recognition, the best companies often have one single program for all employees, or at least consolidate them behind a common purpose, the study found. One of those purposes is to acknowledge the work many employees now put into the increasingly common "non-core" tasks outside of their main function.

Another is focusing on specific goals, the most common being improving morale (84 percent), followed by improving productivity (58 percent) and improving customer satisfaction (48 percent). And a third is ensuring that the program's reward structure reaches beyond the top performing employees with the goal of "ensuring as many solid-performing employees as possible get rewarded," the report says. 

When it comes to sales incentive programs, many top performing companies have goals beyond simply increasing overall sales, although that does remain the most prevalent, at 80 percent. Rounding out the top five goals are: improving morale (76 percent), improving productivity (58 percent), gaining market share (47 percent), and increasing sales of specific products (27 percent).

Another element common to more than half (56 percent) of top performing companies' sales incentives are that they are intended to succeed at what the industry broadly calls "moving the middle" -- that is, they don't just focus on rewarding the top 5 to 10 percent. On average, these programs aim to capture more than half of the sales workforce.  

A third is that these programs often (80 percent) use more than one type of non-cash award. Gift cards are the most common (72 percent), followed by merchandise (44 percent) and individual or group travel (34 percent).

For the seven remaining patterns common to sales programs and the seven different ones shared by employee recognition programs run by top-performing companies, see the report here.