How To Modernise Automotive Sales Incentives
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Despite what you might have been told, old school ‘carrot and stick’ incentives with cash as a motivator just don’t work anymore. Nowadays motivation has become more sophisticated. It pays to combine reward with recognition, not just for sales, but also customer service, living brand values, improving business processes or simply for going above and beyond. This SlideShare explores how to modernise your automotive sales incentives
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How To Modernise Automotive Sales Incentives
- 1. HOW TO MODERNISE AUTOMOTIVE SALES INCENTIVES
- 2. SALES INCENTIVES MOVING BEYOND CARROT AND STICK TRADITIONAL INCENTIVES ALONE ARE NO LONGER APPROPRIATE The measurement of success in sales is now multifaceted, reflecting the overall outcome for the customer, not just whether an immediate sale was made or not. Sourcing the right product/service for the customer is essential (moving away from a ‘hard sell’ to a ‘consultative sell’) New generation performance incentives are needed.
- 3. SALES INCENTIVES MOVING BEYOND CARROT AND STICK RE-FOCUS ON RECOGNITION, NOT JUST REWARD Regular recognition of achievements is a more powerful a motivator than cash. Recognition is a key driver of retention. Low value recognition alongside achievable incentives promote engagement. Combine manager and peer recognition.
- 4. SALES INCENTIVES EDUCATION IMPROVE FINANCIAL AND PRODUCT KNOWLEDGE Use online educational modules and quizzes to improve knowledge. Offer incentives for completion of online learning. Engage employees using gamification.
- 5. SALES INCENTIVES CUSTOMER EXPERIENCE LINK RECOGNITION TO CUSTOMER FEEDBACK Ensure customers receive the right advice on finance and insurance options. Move away from a ‘quick sale’ attitude by assigning a reward value to customer feedback. Use recognition linked to values that promote customer experience.
- 6. GO BEYOND SALES BASED REWARDS Ensure full and accurate completion of CRM database. Follow correct procedures for the financial education of customers. Improve call rates and appointment setting. Cross sell complimentary products and services (when appropriate). SALES INCENTIVES LEAD MANAGEMENT
- 7. SALES INCENTIVES LEAGUE TABLES HEALTHY COMPETITION OR UNHEALTHY DISTRACTION? Band performance leagues. Use tactical campaigns to make rewards achievable to all. Offer national and local leagues. Consider ‘most improved’ rewards.
- 8. SALES INCENTIVES LEAGUE TABLES CONSIDER EMPLOYEE PROFILES Front line sales staff, consisting of: • Under-achievers – where a high value year end rewards may seem unobtainable • Middle-tier – who represent the greatest potential return • High flyers – who already give 100% but will require additional stimulus to ensure momentum is maintained throughout the year Dealer principles and managers – provide the reporting they need to drive team performance After sales staff – link customer service and ‘going beyond expectation's measures
- 9. SALES INCENTIVES SEGMENTATION SEGMENT REWARDS Band rewards to make them achievable for all. Inject regular impetus with tactical campaigns. Regularly ‘level the playing field’ – allow those not in top annual league positions to achieve a reward based on performance over a short timeframe. Rewards need to inspire small step changes.
- 10. SALES INCENTIVES SEGMENTATION SEGMENT COMMUNICATIONS Good communications give purpose. Promoting high end rewards to middle and lower tier performers will likely de-motivate. Link communications to values. Be creative with graphics and bring the information to life. Give sales people more reason to visit the incentive portal, over and above checking their league position.
- 11. SALES INCENTIVES MANAGER BUY-IN BUILD STRONG RELATIONSHIPS Equip managers with data in an easy to understand format. Provide visual reports for easy comparison. Offer a range of incentive tools to help managers motivate under-achievers. Try to avoid encouraging pressurised sales tactics – support managers with toolkits and training.
- 12. SALES INCENTIVES TOP TIPS TOP 5 TIPS WHEN REVIEWING YOUR INCENTIVE ACTIVITY Incorporate recognition as well as reward. Involve managers from the start. Link recognition to corporate values. Better educate dealer and manufacturer employees. Reward employees based on more than just a sale. 1 2 3 4 5 2 1
Editor's Notes
- Despite what you might have been told, old school ‘carrot and stick’ incentives with cash as a motivator just don’t work anymore. Nowadays motivation has become more sophisticated. It pays to combine reward with recognition, not just for sales, but also customer service, living brand values, improving business processes or simply for going above and beyond. Measuring sales success has become so much more than simply looking at sales figures achieved. In the age of employee engagement, factors such as customer satisfaction outcomes and compliance with regulatory bodies have become far more high profile. Rewarding sales people for high sales totals alone may even be counter-productive in this new world. If you’re not sure what this means in real terms, in the USA in 2014, the annualized turnover rate in the average car dealership’s sales department was 72 percent, an increase of six percentage points from a year earlier, proving that cash just doesn’t work anymore.
- Tighter rules are having a big impact as financial services companies are reconsidering and renewing their sales incentives schemes in the light of regulations designed to prevent miss-selling. Sales people might now be rewarded for identifying the right product for particular customers. FCA rules have hit the financial sector hardest but any organisation selling finance as part of the product or service sale may be affected. Of course sales people are used to and still expect incentives and rewards but businesses must raise their game well beyond targets and commission payments if they are to hold onto their best people and grow the business. Traditional sales incentives still have a part to play, but should be deployed alongside a new focus on recognising sales employee’s for broader outcomes, which in turn can contribute to achieving a deeper engagement and better long-term outcomes for all.
- The concept of gamification may be fairly familiar to some; the concept uses ‘big data’ to help drive incentive content. Gamification allows you to categorise the audience according to a range of characteristics including performance, profile and participation. This, tied in with your multi tiered approach to recognition will ensure that you employees are always looking to push themselves and achieve bigger and better rewards. Example shown taken from VWCV programme – upon completion of educational quiz users are offered the change to win a prize.
- Aid future marketing efforts by tasking frontline staff with sourcing additional details about customers – identify where there is the opportunity for future sales to other members of the family. Comply with FCA guidelines – document customer education on your CRM system. Example criteria shown from Peugeot ‘The Guild’ programme – refocus this year on lead management as well as closing sales.
- Replace League tables with wider web-based performance league tables. Standard sales league tables are no longer effective in a world where incentives need to be designed to achieve much more than pretty looking reports. The league table is now becoming a hub for performance-related content, driving dynamic, segmented communications, personalised to your individual preferences. Represent sales percentages as steps towards enticing images of a dream reward for each salesperson.
- Focussing entirely on top performers can result in lower performers adopting bad practices in order to reach target. Greater gains are to be had by motivating middle tier employees.
- Comms could encourage readers to check out educational content around products and services.
- Your managers are absolutely instrumental in driving a culture change once you’ve decided on your new programme. Employees need to see that job satisfaction is not directly equated to remuneration levels and that factors such as personal development and career progression through training – as an example- have a bigger role to play than just being a tick in the box. Managers also have a role to play in making your new sales incentives programme meaningful to individual employees, making it easier to motivate reward and recognise more meaningfully. Behaviours which reflect Pink’s Autonomy, Mastery and Purpose should be encouraged. This might include knowledge, credibility, professionalism, consultative selling, collaboration, ownership, lifetime value or after sales service.