Top 8 Reasons Why Sales Incentives are Important

5 min read

Several companies have adopted “Sales Incentives” programs. It is crucial to choose the right kind of sales incentive plan to motivate your sales team to increase the sales of your products and services. The advantages of sales incentive programs are many and this article highlights the importance of sales incentives for any organization.

If your company deals in sales, then you know having a highly motivated sales team is the want of every company. Hence, it is significant that they are taken care of.

Sales Incentive Compensation is the way to go. Incentive Programs reward employees for reaching work goals, doing exceptionally well, achieving milestones, or simply doing a good job. Incentives are a great way to show employees that you value their input, simultaneously increasing the overall performance of the company. Whether they are cash-based or non-cash based (trips, prizes, points, trophies, or other awards), sales incentives play a large role.

Now, all of this comes down to the most common question: Do sales incentives work? Do they provide enough ROI for them to be worth an organization’s time, effort, and resources?

So here are the top eight reasons why sales incentives are important:

1. Motivation and Employee Engagement

Quality performance starts with the motivation to do it. Likewise, the most prominent benefit of a sales incentive program is motivation. If your sales reps seem unmotivated, incentives act as a perfect way to motivate them and jump-start your sales. Sales incentives have also proven to boost employee engagement. According to a study by Incentive Research Foundation, it is found that incentive programs can boost performance by up to 44% if built correctly.

2. Creates Loyalty

Here is a simple but powerful fact. Employees who feel appreciated and are satisfied, tend to be more loyal towards the company. As employees work harder to generate more sales, providing them with the right kind of incentive program creates a sense of loyalty and also helps with retention. This loyalty is beneficial to not only your company but also to your customers as they can enjoy better customer service and long-term business relationships with your sales reps.

3. Triggers Positive Response

Salesperson’s success is determined by 80% attitude and 20% aptitude. Nothing will motivate your employees more than feeling that you appreciate and acknowledge excellence by rewarding them. Sometimes a reward can be in the form of public recognition, a voucher, gift card, a dine-in, or even a simple trophy. Knowing they have a reward/ incentive for their work ignites areas of the brain making them work more efficiently and effectively. These rewards result in getting a cut above response from the reps.

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4. Creates a Hiring Edge

The best salespeople often have their pick of companies to choose from. In such cases, a sales representative is going to look for a company that has an attractive sales incentive program rather than a company that only pays a commission. If you are offering the best sales incentives you are more likely to entice and retain higher quality sales reps. This creates a hiring edge over other organizations.

5. Reduced Turnover

The prime reason for employee attrition is because they feel under-compensated and unappreciated in their respective positions. However, having an exceptional incentive program is an excellent way to reduce employee turnover. It is a way of showing them that you appreciate their contribution to the growth of the company. Thus, sales incentives are a major reason why your sales reps will stay with you for years.

6. Promotes Healthy Competition

A high proportion of salespeople have a competitive fire. Competition is what drives them to make sales. And let’s face it: Competition is what makes one strive to be better. With incentive programs, employees have something to compete for. As a result, healthy competition fosters hard work and helps stress more productive work from your sales reps.

7. Drives Collaboration

Sales incentives not only encourage friendly competition but also drive collaboration. To emphasize the importance of teamwork in your organization, you can set a team goal with significant large rewards and incentives for reaching the goal. Due to this everyone is encouraged to work together, which creates an in-team collaboration that many organizations desire. It also leads to a friendly and healthy organizational culture.

8. Increased Target Achievement

Goal setting and targeting objectives help with the overall focus and purpose of any organization. Incentive programs are a great way to reach these goals and company objectives. Employers can set realistic goals/sales quotas using incentive programs and reward employees when they have attained them. This is a great way to boost productivity and achieve the target.


As you can see, there are numerous benefits associated with a sales incentive program. It can be of huge importance not only to the sales team but to the company as well. From motivating your sales reps and increased loyalty to reduced employee attrition and teamwork, incentives provide many more benefits all around.

Do you have a sales incentive program for your reps? Reach out to us at and we can help you design the right kind of sales incentive plan customized to your business requirements, desires, and limitations.


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