09.30.2008 — Putting together the right mix of compensation, performance incentives and sales quotas to motivate your salesforce is challenging -- but very doable if you keep a few key points in mind.

The bigger you get, the more you are going to rely on the technical knowledge, interpersonal skills and powers of persuasion these people combine to rake in the revenue that's the lifeblood of your business.

Here are three ways to motivate your salesforce to get it done.

Incentivize Your Salesforce Beyond Money

Sales performance incentive programs that resonate with this group need to address elements other than monetary compensation.

"Money is key, but there is a point at which it no longer functions as an incentive," says Howard Stevens, CEO and chairman of Dayton, Ohio-based HR Chally Group, a talent management, leadership development, and sales improvement consultant.

Once a salesperson reaches an income level that supports the lifestyle he or she desires, interest shifts from making more money "to attaining freedom and flexibility, with the ability to control their own lives and their own schedules while maintaining that lifestyle," explains Stevens.

Beyond dollars and freedom, "there has to be a recognition program," according to Stephan Schiffman, head of DEI Sales Training Systems, a New York City-based sales training company.

This can include everything from membership in a "President's Club" to special awards or gifts for performance, he notes, adding that in a sales market "oversaturated with people," sales staff often gets to feeling "they are on the bottom of the pyramid, and recognition is one way to provide them with more incentive."

Develop a Sales Compensation Plan

Putting together a sales compensation and incentive program isn't an easy undertaking, but it's one an organization needs to accomplish.

"A strong sales compensation plan and reasonable quotas are critical to the success of any company," says W. Leigh Culpepper, president and CEO of Alpharetta, Ga.-based Culpepper and Associates Inc., a provider of survey-based benchmarking data for compensation and employee benefit programs.

"A good sales incentive plan can help attract and retain good sales reps," according to Culpepper, and when properly administered, "should motivate reps to perform their duties efficiently and industriously."

Whether you create the program yourself or use a consultant, it pays to keep a few key points in mind, says Timothy Sullivan, director of product development at Sales Performance International, a sales training and performance improvement firm in Charlotte, N.C.

Most notably: "Keep the plan simple," says Sullivan. "I saw one plan that had 12 different metrics on which to base incentive pay, which led one member of the sales team to tell me that they have no idea what they get paid for."

Set Quotas that Line Up with Corporate Goals

Make sure your incentive program lines up with corporate goals as well, he notes.

A program that rewards salespeople for high-margin (high-profit) sales "is going to drive behavior that may conflict with other important goals, such as generating total revenue or growing the customer base."

Paying out monetary rewards promptly is also important. "The closer in time you reward a behavior, the more likely that behavior is going to be repeated," says Sullivan.

"One tech-business organization we are working with now literally pays sales incentive bonuses on a monthly basis so that the salespeople know exactly what it is they are being rewarded for."

When to Schedule a Sales Plan Rollout

Make sure everybody knows the rules at the beginning of the game, which usually means putting out your plan at the beginning of the year.

"We worked with one software company that didn't put out its compensation plan until the fourth quarter," Sullivan reports.

"In the meantime, the salespeople didn't know how they were going to be paid and turnover went through the roof."

Smart organizations, he says, "have their awards dinner for salespeople the first week of January and bring out their compensation plan for the year at the same meeting. By the second week, everybody is ready to roll."

Martin Sinderman is an Atlanta-based freelance writer.