According to a recent study, less than a quarter of surveyed employees were satisfied with the investment their organization made in incentives and rewards. That suggests a key component of driving sales performance — the incentives program — is not functioning at maximum capacity.
Sales incentives are more than the compensation your reps take home at the end of the day. Strategically designed commission and rewards programs could inspire sales reps to reach for more challenging goals or embrace changes they might otherwise be reluctant to adopt.
But what do smarter sales incentives programs look like? Views are mixed, with some sources suggesting that alternatives to cash drive reps to go above and beyond. At Wirecard, we tend toward the view that while augmenting payments with non-cash incentives is hardly a bad thing, offering new ways sales reps can earn money and make their incentives go further is ultimately more effective than tangible gifts, travel, or closed-loop gift cards.
The scoop on cash alternatives
A 2019 study by the Incentive Research Foundation named experiential or travel incentives as a growing trend, pointing to increased travel spend among program buyers. The idea is that “hedonic” incentives are unlinked from the sense of obligation that may come with cash; whereas employees may feel pressure to put cash incentives toward household needs or outstanding debt, a trip to Hawaii is pure pleasure.
But hedonic incentives aren’t for every employee. Take sales reps, who often work for themselves. (The Occupational Information Network lists independence among their top work values.) These professionals need and want recognition, but on their own terms. Trends like transformative travel don’t fit every lifestyle or schedule, whereas digital cash incentives could be put toward a trip to Alaska, if Hawaii doesn’t appeal, or toward emergencies and essentials if a vacation isn’t in the cards.
In fact, 68% of employees said they would prefer a $750 prepaid card over a four-day, all-inclusive trip. Of those who said they wanted the prepaid card, 72% would use it on everyday or emergency expenses — not experiences or gifts.
And worker preferences were only half the picture. Researchers found that while tangible rewards had a positive effect on employee goal commitment and performance, employees were likely to set easier goals for themselves, in the first place. Employees held themselves to higher standards when cash rewards were at stake. Since personal accountability and ambitious goal setting tend to be especially critical for independent sales reps, this revelation should inform incentive plans that seek to expand on existing cash-based compensation.
Enhancing digital cash incentives
So how can sales managers optimize sales incentives programs and drive higher performance? Digital incentives programs offer a range of useful options. For starters, organizations can issue incentives on physical or virtual prepaid cards, which reps can add to mobile wallets and spend pretty much anywhere — similar to a credit card.
Just as credit cards offer rewards for certain kinds of purchases, prepaid incentive cards offer value-added options that ensure reps’ earnings go further when they spend at certain kinds of establishments, like gas stations. Note that cash-back rebates were the most popular reward for credit card-holders, far surpassing merchandise, travel, experiences, and gift cards. The same applies to rewarding your sales team. Instead of enhancing reps’ earnings with non-cash options like gifts or trips, companies can instead increase the value of every dollar earned.
Finally, digital payments offer insight into users’ buying behavior, which can help companies refine their incentives models. For instance, data generated by reps’ spending may reveal that certain kinds of purchases are particularly popular, suggesting opportunities to implement rewards in those categories.
These extras — and the across-the-board convenience of digital payments — come at less than the cost of other payment methods, like bank transfers. In other words, organizations and sales reps receive more, for less. What could be better news, when overhauling your incentive program to achieve a higher return on investment?
Learn more about building an incentive program that improves your sales team’s performance and delivers higher ROI. Learn more about our Sales Incentives Solutions.