Sales Incentive Program Return on Investment

Aberdeen Group surveyed almost three hundred companies late last year to find out what impact a sales incentive program could have. The results of their survey have just been released and the findings are quite clear: sales incentive programs have a high return on investment. Aberdeen Group defines Best In Class Companies as the top 20% of organizations, all of which had a sales incentive program in place.

Best In Class organizations have the following in common:

• 83% of Best In Class companies' sales reps achieved annual quota in the last year compared with 51% of Industry Average firms and 22% of laggard companies.
• Best In Class companies had 23.1% average year over year growth in corporate revenue versus 7.2% for Industry Average firms and a decline of 5.9% for Laggards.
• Best In Class companies had 9.7% average year over year improvement in average deal size, compared with 1.9% for Industry Average companies and a .4% decline for Laggards.

Companies offering non-cash incentives have better results:

• Best in Class companies are more than twice as likely as all other firms to provide non cash incentives (21% of Best in Class vs 10% of other companies use R&R programs)
• Organizations that provide non cash reward/recognition had an average year over year annual corporate revenue increase of 9.6% versus 3% for all others.
• Organizations that provide non cash reward/recognition had a 2.1% year over year increase in revenue per sales FTE versus a 0.7% decrease for all others.
• Organizations that provide non cash reward/recognition had a 1.6% year over year increase in team attainment of quota versus a decrease of 2.2% for all others.
• Adopters of non-cash rewards/recognition also had 34% shorter sales rep time-to-productivity and 10% shorter sales rep time-to-hire.

Non-cash incentives were integral in achieving some of the results according to the survey. I have been seeing more case studies and research that confirms non-cash incentives such as merchandise and travel options have a greater impact than cash programs. If you haven’t read Fast Company’s article on Wooga, a German social gaming organization, this is a prime example of having non-cash incentives and perks elements come together to benefit the business. Incentive Magazine also has a great spot this month onThe Continuing Case for Non-Cash Rewards that highlights how sales incentive programs delivery a higher return on investment when the rewards offered are merchandise and travel based.

All of the recent news about sales incentive program return on investment may inspire you to get started on a reward program for your company. If so, be sure to check out our free incentive program set up checklist in our resource center.