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Sales Incentives vs. Sales Compensation

What's the difference, anyway?

Your sales team deserves rewards for excellent performance. There are plenty of ways to reward them - award them a percentage of each sale they close...or reward them for hitting smaller sales metrics along the way.


What's the difference between sales incentives and sales compensation? 


According to The Free Dictionary, sales incentives are “remuneration (rewards) offered to a salesperson for exceeding some predetermined sales goal”. These rewards may be tangible, intangible, experience, monetary or non-monetary rewards.


Sales commission, however, is defined by the Business Dictionary as “the amount of money that an individual receives based on the level of sales he or she has obtained. The sales person is provided a certain amount of money in addition to his/her standard salary based on the amount of sales obtained.”


The majority of workers in the sales industry expect commission. What they aren't expecting is to be consistently motivated along the way, encouraged to collaborate with fellow sales teams, and to easily see how their contributions impact the company as a whole. 


The dilemma for all sales team supervisors - Do you reward progress? Or only outcomes?




3 Reasons to Ditch your Compensation-Only Plan and Integrate a Sales Incentive Program:


1. Compensation doesn’t equal commitment. Commission-based pay is not a unique concept, that doesn't set your company apart from any other sales job out there. But when your sales team has exciting incentives to look forward to by meeting sales goals and continuing to grow with your company, employees are more likely to stay committed to your organization and push to reach those goals.


2. Sales incentives create a culture of improvement. When your sales force is constantly working towards new goals, they're also steadily improving their skills. With each goal met, your team's strategies will get stronger. Celebrating wins will help your sales team notice that their efforts are recognized - building a great working environment with a positive culture. Think outside the box for ways to help your sales team get ahead while setting yourself apart as a great place to work and grow.


3. Commission caters to the individual, not the company as a whole. When you pay extra commission based on individual sales goals, each employee is only concerned with earning their own commission. Your sales team should be working together to accomplish goals as a team. The first step is to create company and team goals. Then your sales team can work toward those end goals together. Finally, your bottom line will be positively impacted when the company continues to grow - together.


How Sales-Driven Companies Motivate & Reward:



Motivate and Reward



Incentive Programs





The important take away here is that there is a big difference between incentives and compensation. The good news is – they can work really well together! One is not necessarily better than the other, but together your company will be taking motivation to the next level



CTA Incentive Program