How to Create a Sales Incentive Program?

08 November 2023

How to Create a Sales Incentive Program?

A sales incentive program is an effective strategy to motivate your sales team and boost your company's performance. It can help you achieve your sales targets, improve team morale, and foster a competitive yet collaborative environment. But how do you create a sales incentive program that is both effective and fair? This guide will walk you through the process.

Understanding Sales Incentive Programs

A sales incentive program is a structured plan designed to motivate salespeople to achieve specific sales objectives. It can take various forms, including cash rewards, bonuses, trips, or merchandise. The goal is to incentivize salespeople to exceed their sales targets and contribute to the company's growth.

However, creating a successful sales incentive program is not as simple as offering rewards. It requires careful planning, clear communication, and regular monitoring and adjustments. Let's delve into the steps involved in creating a sales incentive program.

Steps to Create a Sales Incentive Program

1. Set Clear Objectives

The first step in creating a sales incentive program is to define clear objectives. What do you want to achieve with this program? Are you looking to increase overall sales, sell a specific product, or expand into a new market? Having clear objectives will guide the design of your program and help you measure its success.

Remember, your objectives should be SMART - Specific, Measurable, Achievable, Relevant, and Time-bound. This ensures that your goals are clear and achievable, providing a clear direction for your sales team.

2. Understand Your Sales Team

Understanding your sales team is crucial in designing an effective incentive program. What motivates your team? What are their preferences and needs? Conduct surveys or have one-on-one conversations to gather this information. This will help you tailor your program to your team's needs, increasing its effectiveness.

Moreover, understanding your team's performance levels and capabilities can help you set realistic and fair targets. This ensures that your program is achievable and fair, preventing frustration and demotivation among your team.

3. Design Your Incentive Structure

Once you have clear objectives and understand your team, you can design your incentive structure. This involves deciding on the type of rewards, the criteria for earning them, and the payout schedule.

There are various types of rewards you can offer, including cash bonuses, trips, merchandise, or recognition. Choose rewards that are appealing to your team and align with your budget. Also, consider offering tiered rewards to motivate all members of your team, not just the top performers.

The criteria for earning rewards should be clear and directly linked to your objectives. For example, if your objective is to increase overall sales, you might reward salespeople based on the number of sales they make. If your objective is to sell a specific product, you might reward salespeople based on the number of that product they sell.

The payout schedule is also important. Frequent payouts can provide immediate motivation, while less frequent payouts can encourage long-term performance. Consider your team's preferences and your company's cash flow when deciding on the payout schedule.

4. Communicate Your Program

Once your program is designed, communicate it clearly to your team. Explain the objectives, the rewards, the criteria for earning them, and the payout schedule. Make sure your team understands how the program works and how they can benefit from it.

Communication should be ongoing. Regularly update your team on their progress and the program's success. This keeps your team engaged and motivated.

5. Monitor and Adjust Your Program

Finally, monitor your program regularly to ensure it's working as intended. Are your objectives being met? Is your team motivated? Are there any issues or concerns? Regular monitoring allows you to spot any problems early and make necessary adjustments.

Remember, your sales incentive program should be flexible. Be ready to make changes as needed to keep your program effective and fair. This might involve adjusting the rewards, the criteria, or the payout schedule.


Creating a sales incentive program is a strategic process that requires careful planning, understanding of your team, and regular monitoring and adjustments. However, when done right, it can significantly boost your sales performance and team morale. Follow these steps to create a sales incentive program that motivates your team and drives your company's growth.

About the author
Arnaud Belinga
Arnaud Belinga
Arnaud Belinga is the Co-Founder & CEO at Breakcold. He talks about Sales CRM use, marketing & sales. He loves Surfing 🏄‍♂️ & Skateboarding 🛹️.
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