The relationship between sales representatives’ performance and their compensation is a critical one, and a snapshot of the field shows companies may not be doing enough to incentivize their teams.
A 2018 study revealed that only just over 24 percent of sales reps had exceeded their previous year’s quota. And, only about 47 percent said their job satisfaction was “good” — lower than the average for all occupations.
Keeping good reps on board is another worry for businesses, with the average sales development rep staying on the job for just 2.8 years (compared to 4.2 years for all wage and salary workers). That tenure included an average ramp-up period of over four months, meaning sales professionals are costly to hire as well as hard to keep.
As companies look for new ways to attract top performers and motivate their existing teams, they must turn a critical eye to how reps are paid. Enter digital payments, which offer both an immediate solution and the long-term potential to build an incentives program that drives success.
Payment speed matters
Currently, ACH transfer is the most common way to compensate reps, with each transfer taking about one to three days for banks to process. That doesn’t factor in your back office’s processing time and pay schedule, which could further push off payday.
Since many reps are only compensated when a sale comes in, long wait times for commission payments can be frustrating at best, and demoralizing at worst. Keep in mind that as many as one in three middle-class households in the U.S. live paycheck to paycheck, and sales reps typically experience greater variability in their pay than other professionals.
On the flip side, commission-based compensation can open up sky’s-the-limit opportunities for earners. So, how do you keep your reps motivated during both lean and flush times, while encouraging them to push for more of the latter?
Timely compensation is one relatively easy change that can prompt a morale boost. In fact, 85% of freelance workers say they’d work more frequently if they were paid faster. Prepaid cards are one method that offers a secure, reliable, and efficient payment experience.
But beyond payment speed, prepaid card-based incentive programs offer nice extras that add value to reps’ earnings – like cash-back rewards at establishments such as gas stations and restaurants. Similar to credit cards, users benefit when they spend their prepaid cards on necessities like fuel.
Every little bit helps. Since many sales reps operate as independent contractors, they share similarities with freelancers, who often use multiple platforms to find work while serving as their own bosses. When workers debate whether to stay with your company or leave for a new opportunity, an enhanced payment experience could be the difference maker.
Incentives inspire action
In Wirecard’s 2019 Consumer Incentives Survey, we found that customer loyalty was strongly tied to the incentive experience. Real-time rewards and a seamless experience prompted customers to make more purchases with sponsor brands, engage with them on social media, and even visit brands’ retail locations.
Taking a leaf out of the consumer incentives playbook could help you drive your sales team’s loyalty, motivation, and overall performance. In fact, a recent study found that 78 percent of employees would use three or fewer sick days in exchange for a $75 prepaid card, and 88 percent would refer a job candidate for a $100 prepaid card. The offer of an incentive workers could use right away was enough to inspire choices that benefited their employers and colleagues.
And although sales is a long game that rewards perseverance, immediate gratification can yield significant results when it comes to cultivating the little things that lead to success.
Take the inbound marketing software company Hubspot, which saw big gains when it implemented a commission plan designed to grow the number of customers who paid in advance for a full year of service. Hubspot knew salespeople had the ability to influence customers’ choice of plans. So, they began paying full commission immediately, for every new account that paid upfront. (For accounts that didn’t prepay, reps received commissions in installments, over the course of twelve months.) Following this move, Hubspot’s average prepayment commitment increased from 2.5 to seven months.
That’s proof the promise of immediate compensation has a lucrative impact on sales reps’ performance. Real-time payments have the potential to be an even bigger driver of success. And with the expanding capabilities of digital payment technology — from gamifying the payment experience to tracking rep behaviors for a granular picture of how incentives influence performance — sales managers can bring a range of new tools and strategies to the challenge of helping reps achieve their highest potential.