Recently we posed the question “Do sales incentives really work?” and if they could improve performance and change behaviours. This put me in mind of a sales programme FMI has been running for the UK arm of a global agricultural machinery company and how the mechanic for this incentive has evolved and adapted to meet these challenges and other business objectives.
Our client first approached FMI to look at how we could improve their existing sales incentive. One of the key issues was that the salesperson’s focus was on the sale and not the sales process. Therefore, whilst the incentive was driving acquisition sales the incomplete sales process meant the client was without key CRM and sales tracking data to enable follow ups and future sales opportunities.
How did we overcome an underperforming sales incentive?
We worked with the client and their sales channel to look at an incentive mechanic and a workable process to encourage the correct execution of the sales process. In a classic carrot and stick method, a salesperson would receive only a proportion of the available reward for a sale but the full value for having completed the sales process correctly.
Within three months of implementation we successfully managed to change behaviours and “over 90%” of acquisition sales had been completed with the correct sales process.
Fast forward to 2024 and the introduction of new 2024 licence plates from 2023. An age-old problem throughout the industry is customers want this year’s plate and not last year’s. The customer perception is they want the brand new ’24 machine and not the year old ’23 one. The reality is that both machines are brand new. Historically, this has meant heavily discounting the previous year’s plated machines to shift stock ahead of the new plates, reducing margins considerably.
This year we did things differently. We incentivised the salesperson.
The results of a successful sales incentive
By rewarding sales of ’23 plated stock and not ’24 plated machines, we dramatically improved performance and saw 84% of stock sold during the first two months of new plates.
With happy sales people, satisfied customers and a much improved bottom line, we can safely say that sales incentives can and do really work when the client and the agency work together and understand the objective.
