• Brands try to incentivize their sales force to boost sales. 
• There are multiple aspects of this strategy, plus it can be beneficial in more ways than one. 

If you have a revolutionary product or service, and sales are low, you can boost the sales by using “incentivizing the salesforce” marketing strategy. Businesses must never forget that having a revolutionary product or service with the potential to disrupt the market doesn’t guarantee success. This is where the salesforce comes in, especially if it fails to reach the target audience.  

A salesforce must be motivated and passionate about selling the product or service. This motivation rides upon two significant factors: their salary and incentives. Moreover, incentivizing the salesforce is a core marketing strategy that could motivate the salesforce to achieve specific goals that could benefit the company. 

It’s more about creating a reward system where their efforts are recognized and rewarded, fueling their drive to boost sales performance. Interestingly, “incentivizing the salesforce” is not exactly a marketing strategy. It’s more of a sales strategy using core marketing principles to motivate the sales force. 

How did Xerox boost its sales in the 1960s by “Incentivizing the Salesforce”?

Experts still believe that Xerox’s story of the 1960s is a textbook example of how brands can boost their sales exponentially by “incentivizing the salesforce.” At the time, Xerox had an excellent product, the Xerox 914 Copier, but the sales team struggled to sell them. The traditional commission structure at the time failed to motivate them to push the bulky copier. 

The then Xerox Vice President of Marketing, Joseph Wilson, devised an attractive solution. He spearheaded the radical change in the existing commission structure and created a tiered system based on the salesperson’s performance. It was an evolution of one size fits all to a perfect fit. 

Critical features of Xerox’s Marketing Strategy

Xerox incorporated some critical factors for success; interestingly, other businesses can use these factors. These included Base Salary, Commission Tiers, & Team Incentives. 

All salespeople received a base salary, which ensured their financial well-being and stability. It also helped reduce the pressure they might feel in closing the deal at any cost. Commissions increased significantly when a salesperson exceeded the quota. 

It meant a salesperson could double or even triple their base salary if they performed well. The commission was not only focused on individual salespeople but included teams as well. Whenever a team managed to beat a collective goal, every team member received a bonus. This strategy fueled a sense of teamwork and collaboration and facilitated healthy competition. 

How Incentive Strategy Helped Xerox? 

The result of incorporating the strategy was phenomenal. The motivational boost pushed salespeople beyond just selling the copier; they were selling their path to a much higher income. It also helped indirectly increase their motivation and drive. 

Also, the tiered structure encouraged the salespeople to close the deal and sell more supplies and services along with a copier. As a result, the end customer received more value, and Xerox increased its overall revenue.

When salespeople received higher commissions, it fueled expertise development. To gain higher commissions, salespeople started selling more complex solutions, and to do so, salespeople worked on becoming experts on various Xerox products and their applications. This expertise allowed them to provide better customer service and higher customer satisfaction. 

Besides boosting sales, Xerox also managed to attract and retain top talents. The impeccable combination of a good salary, high potential earnings, and a positive culture of success allowed Xerox to become a desirable employer for salespeople. In a way, they set a trend, a norm followed by nearly every other company nowadays. 

Success Beyond Numbers

Although Xerox achieved financial success from this marketing strategy, the company’s salesforce also earned the title ‘The Great American Sales Machine’. This was a testament to their dedication and expertise. The newly attained title further boosted sales as customers contacted Xerox for their top-notch salespeople.

Xerox’s “incentivizing the salesforce” strategy revolutionized the sales industry forever. They demonstrated that by investing and motivating the salespeople, a company could achieve phenomenal growth. Other companies could take notes and should understand that salesforce is the driving mechanism, and they should be taken good care of.  

Why Should a Business Focus on “Incentivizing the Salesforce” strategy?

The most apparent benefit of incentivizing the salesforce is a boost in sales volume. Also, offering incentives for hitting the target or exceeding the quotas encourages the salesperson to put extra effort into it. Businesses must ensure that the incentives promote specific behaviors beyond just sales figures. 

Adding this extra layer in sales could lead to acquiring new customer segments, upselling to existing customers, and focusing on high-margin products or services. Data suggests that incentives push the salesperson to constantly refine their skills and knowledge, an added benefit for the company. 

The competition inside the sales team pushes each member to learn about the product better, perfect their communication skills, and become effective closers. This, in turn, saves resources which would have been used to upskill the sales staff. Moreover, a well-designed incentive program shows that the company values the salespeople and could be a great motivator for them. 

Different Types of Incentives

Companies could offer various types of incentives for their sales team. The obvious ones can be financial rewards or commissions based on sales volume, which are classic examples. They can also be offered bonuses for exceeding targets, early achievements of goals, and closing specific high-value deals. 

Non-monetary rewards, including trips, prizes, public recognition like SalesPerson of the Month, additional paid time off, or a tour providing the exclusive experience, can be great motivators. These rewards can also be added upon the financial reward; for instance, on achieving a specific target, the salesperson would get a monetary incentive plus a paid trip to a destination. 

Gamification can also be an optional reward system. Upon completion of specific targets, they could be awarded points, leaderboard mentions, etc. They can also be involved in healthy team competition, adding fun to the sales process. For instance, to celebrate a small win, the team could be provided with a dinner party at a nearby restaurant. 

Sales teams can also be offered opportunities for skill-building workshops or certifications. It could portray that the company is serious about its development and is investing in its growth and development. This also creates a sense of belonging, which could be a great motivator.

How to Design an Effective Incentive Program? 

Until now, we’ve cleared the benefits of the “incentivizing the salesforce” strategy and Xerox’s successful case study. If you, too, want to incorporate this strategy into your business, you must have a question on how to design an effective incentive program. Here’s the answer. 

Businesses should ensure that the incentive program aligns with business goals. It should complement and support the overall marketing strategy and sales growth. They should focus on more than just high-volume sales but also customer retention. The strategy should define clear yet achievable goals and be transparent enough to track the strategy’s performance. 

The incentives should be varied, but a mix of various incentives should be designed meticulously to cater to different motivations in the sales team. For instance, some sales team members would be happy with monetary incentives alone; some want non-monetary benefits as well. 

Brands must ensure that the incentive program must be fair and achievable for all salespeople. Only some salespeople can sell 500 products in a week, but they are still selling 250, and they deserve recognition for their efforts. If the company acknowledges and celebrates the achievements of salespersons, it reinforces the program’s positives and could be a great motivation for others. 

Pros & Cons of “Incentivizing the Salesforce” Strategy

Every marketing strategy has its pros and cons, and here are some of this “incentivizing the salesforce” marketing strategy. 

Pros

The most direct benefit is increased sales, as commission motivates salespeople to put that extra effort into closing more deals. If the incentives are designed well, they could go beyond just sales figures. Offering rewards for acquiring new customer segments, upselling existing clients, and focusing on high-margin products could be added benefits of incorporating this strategy. 

A healthy competition for rewards pushes salespeople to constantly refine their product knowledge and skills. They would invest time and effort in learning the product better, perfecting their communication skills and becoming effective closers. This directly leads to a professional and well-rounded sales team. 

Interestingly, a well-designed incentive program showcases that the company values the salesperson and motivates them. This directly leads to higher job satisfaction, reduced turnover, and a positive working environment. It’s a fact that a happy and motivated salesforce leads to better customer satisfaction and service and boosts brand image. 

Also, it’s relatively easy to measure the impact of this strategy through sales figures and performance metrics. Brands can quickly assess and analyze the program and make alterations if they fail to achieve the desired results. 

Cons

Sometimes, incentives lead to short-term focus from the sales team, as they would start prioritizing quick wins to earn rewards. This could lead the team to neglect establishing long-term customer relationships and instead focus on high-volume. An overtly aggressive commission structure could lead to unethical practices like pressuring customers or misrepresenting products to meet the target. 

A well-designed program could create an unhealthy competitive environment within the sales team. It could damage the morale and essence of collaboration. Sometimes, these incentive programs can be expensive; to avoid this hassle, brands should focus on the fact that incentives should not outweigh the product cost. 
After discussing the “incentivizing the salesforce” marketing strategy, Xroxe’s case study, pros and cons and related aspects. You must have a clear understanding of what the strategy is and how to use it in your business. But before implementing, remember that the incentives should be sustainable in the long run, and regularly assess the program’s impact in the market and gain feedback from the sales force. Ultimately, it can unleash the full potential of your sales force.