Industry Insights

6 Strategies for Using Incentives to Boost SaaS Sales Performance

By Kam Rawal / December 4, 2018

Most people aren’t natural-born salespeople. And even if you had an entire staff of sales savants, it’s still one of the hardest jobs out there. The process of selling has always been and always will be difficult, to say the least. And it’s no easier for SaaS customer sales and support reps who are pitching your software and services to business customers.

That’s why you need to give a significant amount of thought and planning to your compensation plan. People will not perform at their best if there’s no reward for them to do so. Yes, some will be self-motivated to be the top performers in your organization, but you can’t rely on that for sustained revenue and success.

Instead, you need incentives and rewards that reinforce the behaviors and sales efforts you want to see in your team. The right program helps you drive sales while reducing employee burnout and turnover.

Here are six strategies for creating incentive programs that drive the metrics you need to achieve for SaaS success.

1. Bundle harder-to-sell, add-on, or new solutions with core products

Most salespeople will naturally focus on services they are most familiar with, as well as ones that can generate the highest commissions and greatest quota relief. To overcome this when introducing a new product or service, consider bundling the product with other core products and services. For the customer, you create a turnkey solution with the bundle and you make it easier for the salesperson to sell. You then incent the salesperson with commissions that favor sales of the bundle over individual line items.

Incent salespeople with commissions that favor sales of bundles over individual line items.

2. Solve the shared-sales problem

Many companies don’t commit the time and effort needed to recognize and compensate employees for sales that they influence but someone else actually closes. But you should recognize this accordingly because the situation happens increasingly often in today’s nonlinear customer journeys. A customer may chat with an agent online and gather information only to call on a different day and place an order. Who gets the compensation for this sale? Shouldn’t both employees be rewarded?

With the right tools and reporting you can track cross-channel and multi-touch customer interactions to give compensation credit to the appropriate agents. Doing so will help you drive the right behaviors across all your channels and show your employees that you recognize and appreciate their efforts.

3. Use a separate incentive tier for trials

Everyone in your company should be focused on customer success, which means not just selling your software and then moving on to the next customer, but helping each customer get onboarded and use the software successfully. To reinforce this from the sales perspective, introduce two tiers of incentives. The lower tier can be for free trials and higher tiers for customers that convert to recurring subscriptions.

Everyone in your company should focus on customer onboarding and helping them use software successfully.

4. Keep the plan simple and well-documented

Nothing can make a compensation plan fail faster than complexity. If it requires too much effort to use and understand, your employees will revert to whatever is easiest for them to sell or ignore the plan altogether. If your team is constantly fiddling with spreadsheets to make sense of your plan and track their compensation, then it’s a sure sign that you’ve made it too complex to work effectively.

The best compensation plans are simple to understand and are written in a clear, concise manner. And, unfortunately, this needs to be said, the best companies (high performance, low attrition) pay the correct amount of compensation, and they pay it on time.

5. Complement your compensation plans with SPIFs

While not specific to SaaS sales, special promotion incentive funds (SPIFs) can inject some excitement into your sales team. You can also use SPIFs to gain momentum with new products or bundles. For instance, every time an employee makes a sale of the new offering, that employee’s name goes in a bowl and at the end of the month, the winner is picked at random. Maybe you give away a voucher for a flight or tickets to a popular event. The point is to choose a reward that your team will want to win and build excitement around it.

While not specific to SaaS, SPIFs can inject some excitement into your sales team.

6. Employ gates and accelerators strategically

While incentives reward positive sales behaviors, you shouldn’t ignore the rest of the expectations for the job. Gates and accelerators let you reinforce the behaviors that influence customer satisfaction. Did an employee hit it out of the park on both sales and quality? An accelerator rewards your team members who are performing well above expectations. On the other hand, gates make sure that there’s no reward for hitting sales goals unless key metrics are also achieved, such as first-call resolution, attendance, CSAT, and others.

Putting it all together

When your organization’s compensation plan is defined and executed well, it incents your employees to repeat behaviors that support your objectives—for both sales and customer experience—in ways that are meaningful and rewarding to your employees. It’s well worth the time and effort you spend to design it well.

To learn more about building teams, processes, and strategies for successful, sustainable customers, I encourage you to download AppDirect's eBook: The 12 Building Blocks of Cloud Commerce Go-to-Market Success.

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Kam Rawal is the Vice President of Channel Enablement at AppDirect.

This post was originally published on LinkedIn. Click here to read it.