The proof that “best companies” use non-cash sales incentives

BIC non cash sales incentiveNew research has shown the benefits of a non-cash sales incentive for “best in class “companies.

The February 2013 Aberdeen Research Brief, Non-Cash Incentives: Best Practices to Optimize Sales Effectiveness, which was distributed by the Incentive Research Foundation (IRF) studied how Best-In-Class (BIC) organisations have gone beyond financial motivation and cash rewards. They now prefer to use non-cash rewards in their sales incentive programmes, as an important element in their approach to sales performance management.

By studying this research other companies can learn from the practices implemented and benefit from them without needing to learn from expensive mistakes.


Vital component

BIC organisations are those businesses that are in the top 20% of businesses for a specific industry, and the study found that in comparison to industry average companies or ‘laggard firms’ BIC organisations had:

  • Sales incentivesHigher customer retention rates
  • Higher year-on-year increases in the number of sales staff achieving their targets and quotas
  • Larger increases in deal size and contract value
  • Higher customer renewal rates

BIC organisations are more likely to use non-cash rewards to incentivise and motivate their sales teams. In fact, 55% of respondents to the Aberdeen Research Brief said that non-cash incentives and rewards are a “vital component” of their motivation strategy for managing sales performance.


Internal recognition is a crucial non-cash motivator in BIC companies

The research showed that the majority of the BIC companies use internal recognition programmes to motivate and incentivise their sales staff.

57% of respondents to the study said that “internal recognition for positive performance” is a crucial non-financial motivator. Those organisations which had implemented a formal internal sales recognition programme reported a higher team quota achievement by 14.8%.

The study also identified that compared to other companies BIC companies were:

  • 11% more likely to give verbal praise to their employees
  • 90% more likely to give public recognition to their employees
  • 94% more likely to have a peer-to-peer recognition programme to reward progress towards targets and goals
  • 60% more likely to offer peer-to-peer recognition as a year-end sales incentive
  • 26% more likely to list teamwork as an extremely significant part of the sales approach

Kuljit Kaur, Head of Business Development here at p&mm, concurs with this research,

“Businesses with formal employee recognition programmes make employees feel valued and appreciated. However, there is a difference between the type of recognition managers believe employees want to receive and the type of recognition employees want. And whilst a decent bonus will always be highly coveted, employees report that they would much prefer an in-person thank-you or having a job well done reported to senior management.”


Should you outsource your sales incentive?

The study also examined the crucial option of whether companies should choose to outsource the management of their incentive and reward programmes to a specialist motivation agencies or implement their incentive and reward programmes on their own.

It discovered that there is a wide range of benefits for those businesses that outsourced their incentive programme management.

Compared to businesses that didn’t outsource their incentive and reward programmes to a specialist agency, businesses that outsourced had:

  • Larger lead conversion rates (30.4% vs. 23.9%)
  • Shorter typical sales cycles (4.2 months vs. 5.3 months).

Kuljit Kaur agrees,

“Businesses that outsource their incentive schemes benefit from the expertise that specialist agencies can bring to the table.

“Whilst they can help companies implement these schemes more efficiently, it’s not just about the administration. They can help businesses tie in the sales incentive to business and sales team targets which can mean better sales and marketing collaboration and stronger business results.”


Sales incentives




John Sylvester

John is responsible for the motivation division of p&mm ltd and a Director on the board of the IPM. Specialising in developing, implementing and directing many large scale staff motivation, recognition and employee communications programmes.

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