The need to underplay the role of incentives has been high on many agendas since the financial crash.

However, the automotive industry has emerged relatively unscathed - until now that is.

An impending FCA probe into the use of incentives to encourage sales will soon bring well used tactics under the spotlight.

With 30% staff turnover rates and continued pressure on employees to sell upgrades, finance options and accessories; it can be difficult for dealers and manufacturers to strike a balance between rewarding performance and ensuring a positive customer experience.

But the fact is that rewarding good performance in sales staff, dealer managers and after-sales teams has been around since the days Maslow created his well-known ‘hierarchy of needs’ and will continue to drive individuals to reach stretching targets.

In the last few years however, incentive schemes have evolved beyond the traditional ‘carrot and stick’ approach. Well-managed programmes have seen a shift of focus from high end rewards to more regular, lower value recognition of achievement. They now utilise far more sophisticated techniques to make improvements in customer service, brand experience, loyalty (both employee and customer) and education.

Where to start?

Manufacturers and dealers should amalgamate their incentive activity with an ongoing programme of recognition in order to create one integrated portal offering both high end enticing rewards and regular ‘lower level’ recognition of day-to-day achievements.

This portal should encourage employees to identify and praise behaviours that reflect company values, reinforce those values and subtly inspire repetition of similar actions.

By empowering colleagues to recognise one another through a formalised online portal, paper based presentation, app or using social media you can link values to recognition criteria.

This is an ideal way to showcase desired behaviours in order to instil values in everyday life.

You can also expand upon this idea by incorporating customer feedback into recognition and showcase best practice between departments.

Improve knowledge

Creating long-term customer relationships requires a deeper knowledge base, one that can be developed using your sales incentive platform by incorporating e-learning.

Present your staff with opportunities for training to improve their sales techniques and product knowledge with incentives offered for course completion.

Drive uptake

In order to effectively motivate staff, incentives need to be better targeted to the individual.

Personalisation of the rewards on offer and communications received will not only be a more effective motivator, it will also help to reduce mis-selling, as under-performing employees will not feel they need to manipulate the system in order to achieve targets they feel are beyond their reach.

Here are three areas to review if you want to make dramatic improvements:

The rewards on offer need to be seen as achievable by all.

There is no point teasing a lower-middle tier salesperson with a glamorous end of year travel reward if the targets set are seen as unachievable by that individual.

Instead set smaller, incremental targets for them to strive toward. Greater gains are to be had from your mid-table staff than consistent high performers who are already highly engaged and likely to already be very self-motivated.

A modern performance improvement system can address high flyers by adding extra features and upgrades to rewards for stellar performances.

Different incentives may engage and motivate different groups of staff.

Forecourt staff may be incentivised with prestige experiences, whereas admin or after-sales staff might prefer gift cards. Be sure to survey your audience before making assumptions about their reward preferences.

League tables should become a hub of performance related content, driving dynamic, segmented communications which are personalised for individuals.

This will encourage healthy competition amongst smaller groups of individuals who are performing at a similar level, rather than pitting a new employee against a star salesman who consistently smashes his target.

Use gamification techniques to engage staff in the information being presented.

Adding interactivity will dramatically improve both the volume of visits to key communications but also ensure that the information being presented is better absorbed.

The right sales incentives will not only improve bottom line sales, but will also have a positive impact on customer satisfaction and loyalty through better engaged and educated employees offering the right product.

You should of course set targets that will stretch your employee, but it is equally important to provide a purpose beyond hitting sales target.

Top tips

• Replace standard league tables with wider web-based performance hubs.
• Add fresh content regularly and include smaller tactical incentives throughout the year. Don’t rely on a grand end-of-year gesture alone.
• Include a good mix of individual and team targets with communications banded appropriately.
• Equip your managers with enough information to act accordingly. Don’t limit this to sales figures alone, include courses undertaken, recognition received from colleagues and interactivity levels with communication materials sent.
• Analyse and compare data from incentive programmes from previous years.

The measurement of success in sales is now multifaceted, reflecting the overall outcome for the customer and their lifetime value as a loyal brand advocate, not just the initial sale.

A new generation performance incentive scheme is a vital tool to drive a sophisticated, granular and ethical sales programme.

Author: John Sylvester is director at P&MM Motivation, an award winning performance improvement company specialising in reward and recognition within the automotive industry. Follow Sylvester on Twitter @johnsylvester