Incentive Marketplace Research Study: Sales, Employee and Channel Partner Incentive Programs

In a previous post, we discussed the Incentive Marketplace Research Study, finding that the estimated non-cash incentive, rewards & recognition program expenditure in the U.S. is $175 billion. The study also found that 84% of companies with $1 million+ in revenue, and 92% of companies with $5 million+ in revenue have at least one non-cash incentive program. “Incentive” means different things to different industries. In this context, an incentive program is structured intentionally to motivate, recognize and reward extra effort and achievement. In this post, we’ll explore non-cash Sales Incentives, Employee Incentives and Channel Incentives.

Why not cash? Cash rewards are easily confused with compensation, and in many cases, is awarded exactly like compensation. Tangible rewards and experiences provide lasting memories of the accomplishment. Although participants may say they want cash when asked, studies show that people perform at higher levels for non-cash rewards.

Sales Incentives

The total expenditure in the U.S. on sales incentive programs in 2022 was over $52 billion. Over 55% of companies with at least $1 million in sales and 65% of companies with at least $5 million in sales have at least one non-cash incentive program.

Sales Incentive programs are one of the easiest to measure. Once you know the sales figures from a similar previous period, you can compare with the period where an incentive is offered. Experience shows that the most effective sales incentive programs are those that compare each salesperson’s or team’s performance against their own previous performance. When salespeople are pitted against each other or when everything isn’t equal (such as accounts, territories, etc.), these programs can actually be demotivating. An experienced Incentive Professional can help you to structure effective programs that will increase sales.

Employee Incentives

The total expenditure in the U.S. on employee incentives in 2022 was over $40 billion. The research study finds that 70% of companies with $1 million in sales and 83% of companies with less than a million in sales have a non-cash incentive program for employees.

Employee Programs can be a little more complex to measure, so it’s critical to enlist the help of an Incentive Professional. An employee incentive program can improve areas like cycle time, customer satisfaction and engagement scores, customer service response time, safety and wellness initiatives, and more.

Channel/Distributor Incentives

The total expenditure in the U.S. on channel or distributor program incentives in 2022 topped $24 billion. Of companies with $1 million+ in sales, 48% have a non-cash incentive program; 57% of companies with under $1 million in sales offer channel partners and distributors non-cash incentives.

Similar to sales incentives, channel or distributor incentives can also be simple to measure. Whether your goal is to increase overall sales, product mix, seasonal sales or gross margins, an experienced Incentive Professional can help you structure an effective channel/distributor partner incentive program that will achieve the desired results.

When designing any incentive, reward or recognition program, there are proven steps to follow. A firm that specializes in thee types of programs can guide you through the process to make sure program rules are fair, that participant goals are achievable and aligned with company goals, that the rewards are meaningful to your audience and that you’re measuring the right elements to calculate your return on investment.

To get started structuring your effective sales, employee or channel/distributor incentive programs, contact us today!

Brian Galonek

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