Incentives shape behaviour
People respond to incentives. If you reward volume, you get volume (sometimes at the expense of quality). If you reward margin, you get higher value deals. Understanding this cause and effect relationship is essential for designing programs that drive the right outcomes.
Types of incentive programs
Commission accelerators
Increase the commission rate after an agent hits a certain threshold. This motivates agents to push beyond baseline performance. For example, 15% on the first $10,000 in sales, 20% above $10,000.
SPIFFs (Special Performance Incentives for Fast Sales)
Short term bonuses for specific behaviours. "Close 3 deals this week and earn an extra $500." SPIFFs are effective for launching new products, clearing inventory, or driving urgency during slow periods.
Keep SPIFFs time limited (one to four weeks) to maintain urgency.
Quarterly bonuses
Reward sustained performance with a quarterly bonus. "$2,000 bonus for agents who exceed $50,000 in quarterly sales." This encourages consistency rather than feast and famine selling.
Contests
Short term competitions between agents. "Top seller this month wins $1,000." Contests create excitement but should be used sparingly. If contests run continuously, they lose their motivational impact.
Customer quality bonuses
Reward agents whose customers have high retention rates or satisfaction scores. This counterbalances the natural incentive to prioritise volume over quality.
Design principles
Simplicity. If agents cannot calculate their incentive in their head, it is too complicated.
Attainability. At least 40% of agents should be able to hit the baseline incentive target. If only your top performer qualifies, the incentive demotivates everyone else.
Timeliness. Pay incentives quickly. A bonus paid three months after it was earned has a fraction of the motivational impact of one paid the following week.
Transparency. Every agent should be able to see their progress toward incentive targets at any time. Zepys dashboards make this automatic.
Common mistakes
Too many programs at once. Agents get confused when there are five simultaneous incentives. Run one to two programs at a time.
Rewarding the wrong behaviour. If you incentivise only closed deals, agents may discount heavily to close faster. Balance revenue incentives with quality metrics.
Changing programs mid cycle. Never change the rules after agents have started working toward a target. This destroys trust instantly.
The bottom line
Well designed incentive programs amplify the behaviours that drive business growth. Keep them simple, attainable, timely, and transparent. And always consider whether the incentive drives the right behaviour, not just the most activity.