by Leo Jakobson | June 07, 2011
The incentive market is improving, according to Incentive’s annual Sales IQ survey. Compared to last year, we saw more than a 40 percent increase in the number of respondents who said their companies have increased their overall sales incentive budgets—from 29.8 percent in 2010 to 42.7 percent in 2011. Also, more than two-thirds of the respondents said they are spending more per recipient in 2011, compared to fewer than half in 2010. 

The survey was conducted between March 23 and May 23 via e-mail. Exactly 500 readers of Incentive magazine and its e-newsletters responded. 

How well those companies are spending their money was another survey question. We asked the respondents to rate their sales incentive programs, and just over half answered “extremely effective” or “very effective.” Around 40 percent said “somewhat effective,” and seven percent called their sales incentives “not at all effective.” 

A number of reasons were mentioned for the lack of effectiveness, but there were a couple of recurring themes. Lack of funding was cited by many. One respondent commented, “We do not have enough funds to offer a big enough incentive to motivate high-volume salespeople.” Issues with program design also were noted. Another respondent pointed out a “need to correlate incentives to performance more effectively,” while a third person noted, “It can be difficult to purchase incentive rewards that are well liked by everyone equally.”
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