Top 8 Reasons Why Sales Incentives are Important

Sales representatives are the heartbeats of a business. They bring in the cash that keeps everything running. If your company deals in sales, then you know having a highly motivated sales team is the want of every company. Hence, it is significant that they are taken care of.

Sales Incentive Compensation is the way to go. Sales Incentive Schemes reward employees for reaching work goals, doing exceptionally well, achieving milestones, or simply doing a good job. Sales Incentives are a great way to show employees that you value their input, simultaneously increasing the overall performance of the company. Whether they are cash-based or non-cash based (trips, prizes, points, trophies, or other awards), Sales Incentive Schemes play a large role.

Now, all of this comes down to the most common question: Do sales incentives work? Do they provide enough ROI for them to be worth an organization's time, effort, and resources?

So here are the top eight reasons why Sales Incentive Schemes are important:

1. Motivation and Employee Engagement

Quality performance starts with the motivation to do it. Likewise, the most prominent benefit of Sales Incentive Schemes is motivation. If your sales reps seem unmotivated, sales incentives act as a perfect way to motivate them and jump-start your sales. Sales Incentive Schemes have also proven to boost employee engagement. According to a study by the Incentive Research Foundation, it is found that incentive programs can boost performance by up to 44% if built correctly. The firm benefits from improved production, and employees are happy when they are rewarded for going above and beyond their regular job duties.

2. Creates Loyalty

Here is a simple but powerful fact. When employees feel underpaid or mistreated, they frequently seek new work possibilities. Employees who feel appreciated and are satisfied, tend to be more loyal towards the company. As employees work harder to generate more sales, providing them with the right kind of Sales Incentive Schemes creates a sense of loyalty and also helps with retention. Sales Incentive schemes are a method to recognise top performers and show them how much you value their efforts to the company. This loyalty is beneficial to not only your company but also to your customers as they can enjoy better customer service and long-term business relationships with your sales reps.

3. Triggers Positive Response

Salesperson's success is determined by 80% attitude and 20% aptitude. Nothing will motivate your employees more than feeling that you appreciate and acknowledge excellence by rewarding them. Sometimes a reward can be in the form of public recognition, a voucher, gift card, a dine-in, or even a simple trophy. Knowing they have a reward/ incentive for their work ignites areas of the brain making them work more efficiently and effectively. These rewards result in getting a cut above response from the reps.

4. Creates a Hiring Edge

The best salespeople often have their pick of companies to choose from. In such cases, a sales representative is going to look for a company that has attractive Sales Incentive Schemes rather than a company that only pays a commission. If you are offering the best sales incentives you are more likely to entice and retain higher quality sales reps. This creates a hiring edge over other organizations.

5. Reduced Turnover

Offering sales incentives can help us minimize employee turnover since people are more likely to leave a job when they understand these sales incentives aren't included in the package. The prime reason for employee attrition, therefore, is that they feel under-compensated and unappreciated in their respective positions. However, having exceptional Sales Incentive Schemes is an excellent way to reduce employee turnover. It is a way of showing them that you appreciate their contribution to the growth of the company. Thus, Sales Incentive Schemes are a major reason why your sales reps will stay with you for years.

6. Promotes Healthy Competition

A high proportion of salespeople have a competitive fire. Competition is what drives them to make sales. And let's face it: Competition is what makes one strive to be better. This might be done by showing them where they stand in relation to a goal or how they compare to their peers. With Sales Incentive Schemes, employees have something to compete for. As a result, healthy competition fosters hard work and helps stress more productive work from your sales reps.

7. Drives Collaboration

Sales incentive Schemes not only encourage friendly competition but also drive collaboration. To emphasize the importance of teamwork in your organization, you can set a team goal with significant large rewards and sales incentives for reaching the goal. Due to this everyone is encouraged to work together, which creates an in-team collaboration that many organizations desire. It also leads to a friendly and healthy organizational culture. It can also boost productivity by improving regular work ties across departments and coworkers.

8. Increased Target Achievement

Goal setting and targeting objectives help with the overall focus and purpose of any organization. Increasing revenue is one of practically any company's major objectives. Sales Incentive Schemes are a great way to reach these goals and company objectives. When we provide a wide range of sales incentives to our employees, they are more likely to become motivated and achieve their objectives. It's no secret that happy employees are productive employees, and our sales results will reflect this. Employers can set realistic goals/ sales quotas using Sales Incentive Schemes and reward employees when they have attained them. This is a great way to boost productivity and achieve the target.


As you can see, there are numerous benefits associated with Sales Incentive Schemes. They can be of huge importance not only to the sales team but to the company as well. From motivating your sales reps and increased loyalty to reduced employee attrition and teamwork, sales incentives provide many more benefits all around. Make sure you're providing reasonable sales incentives without giving away too much of your money. It may be difficult to strike this exact mix, but with the correct Sales Incentive Schemes, you'll have a motivated, satisfied, and productive workforce.

Do you have a sales incentive program for your reps? Reach out to us at and we can help you design the right kind of sales incentive plan customized to your business requirements, desires, and limitations.

About Author

Sumeet Shah

Chief Growth Officer @Incentivate, has over 15 years of experience in management consulting, product engineering, and analytics, working with clients across multiple countries, functions, and domains.