by George Kriza | January 29, 2018
Listening to many in the incentive industry, they would have you believe that the key drivers in sales behavior are badgification and tangible rewards. While there may be some truth to the value of badges and trophy-value awards, there are far more potent considerations.

A recent Freakonomics episode titled "How to Launch a Behavior Change Revolution" offered some insight into principles of behavior change. The first principle is that there are two types of forces that affect motivation: Restraining Forces (those that prevent you from achieving your goals) and Driving Forces (those that push you to achieve your goals).

These principles are critical to executing successful sales incentives. In almost all cases, incentive programs are designed to utilize Driving Forces. But, according to Princeton psychology professor Daniel Kahneman, "Diminishing the restraining forces is a completely different kind of activity, because instead of asking, 'How can I get him or her to do it?' It starts with a question of, 'Why isn't she doing it already?' Very different question. 'Why not?' Then you go one by one systematically, and you ask, 'What can I do to make it easier for that person to move?'"
Kahneman is right. Why aren't salespeople selling your product line already, or doing so in meaningful volume?

He says further: "It turns out that the way to make things easier is almost always by controlling the individual's environment, broadly speaking. By just making it easier. Is there an incentive that works against it? Let's change the incentives. If there is social pressure? If there is somebody who is against it, I want to influence B. But there is A in the background, and it's actually A who is a restraining force on B. Let's work on A, not on B. I have never heard a psychological idea that impressed me quite as much as this one, perhaps because I was at an impressionable age."
It's beyond the scope of this commentary to go into all the external negative incentives that could be in play, including possible product shortages and product reliability. But it's right for all of us to consider them. In our world of sales incentives, I see two formidable barriers to program success that are very much within our control, and we should work hard to eliminate them. 

First: Have we created rule structures that are needlessly complex and full of hoops to jump through? After two or more hoops, the salesperson is highly likely to switch to a program with less friction. 

Second: Another piece of obvious friction we can remove is lack of product knowledge and positioning. It is very easy to comprehend that salespeople sell what they know, what they are excited about, and what they see as a great value proposition. Have we taken the time to give them a baseline of information on product positioning, benefits, and features? If not, we should definitely include this in our incentive strategy. You may not have thought about it this way, but instead of charging for training, you might pay salespeople to learn your products.

Put yourself in the salesperson's place. Removing obstacles from the sales incentive process will only benefit and motivate the salespeople. Drive out as many as you can. 

Another interesting point to consider and an additional barrier to success involves over promising. Of course there is the concern of "over-promising and under-delivering." But there is something else to consider: inertia. People don't like to change what they do, or the way they do it. In the world of incentives, competitive products have their own merits, product life cycles come into play, and loyalty to a given brand may also be a factor. 

The question then becomes: how can I change the inertia? And how, if at all, does that relate to overpromising? Consider the impact of an initial program announcement. First impressions are key and launching a new program needs some real sizzle to get some attention in the first place. So, due consideration to your marketing communications strategy remains very important. Social media seems to have supplanted traditional Marcom to a large degree, so have a clear and aggressive strategy to leverage it. 

For SPIFF [sales performance incentive funding] programs, offering salespeople significantly more, proportionately, at the front end of a program will create initial excitement and drive participation. For example, offering a 50-percent-higher SPIFF in the beginning will get needed attention. Also, providing a SPIFF for everything may not be necessary. Deploying meaningful SPIFFs on variable products keeps their attention, and rewards them for that effort.

Let's also consider "time to payment" or "time to receive rewards" as part of this equation. Compared to the impact of a point program to a cash program, there is a dramatic difference in the impact on a person's psyche. A point program is, under most circumstances, a long-term proposition. Accruing enough points to receive a meaningful award can take months, if not an entire year. A cash payment made via a reloadable prepaid card, on the other hand, can be processed in a few days to a week. So, if you want salespeople to change their patterns quickly and meaningfully, make the payouts quick, easy, and exciting. 

In summary, if you're running a sales incentive program make sure your considering the following critical factors that may determine your incentive program's success or failure. The latter shouldn't be an option:

1: Don't put your toe in the water, jump in.
2: Give them a clear reason to learn and sell your products.
3: Don't offer salespeople crumbs, take them to the $100 table.

George Kriza is president of MTC Performance. He has over 30 years experience in the personal computer and consumer electronics industries. Since founding MTC Performance, he has focused on web-based technologies designed to break new ground in facilitating the success of incentive programs. His technology, sales and marketing expertise, combined with keen analytical skills, have enabled him to provide direction to many other corporations looking for a faster track along their marketing curve. Sony, Apple Computer, ITT Corporation, Panasonic, Creative Labs and Proxima are just a few of the companies that have utilized George's experience.