In the retail industry, employee motivation is crucial. And, let’s face it, money talks, but in an ever-competitive industry, monetary incentives must be used and managed properly.
Globally, retailers are facing roadblocks: the rise of online competition, increasing cost of living, pricing pressures, slim operating margins, and the need for omnichannel strategies, implying a single customer view through which retailers can customize the shopping experience.
In today’s digital world, consumers no longer require the assistance of retail employees in the traditional sense. Customers now have access to all of the information they require about a product or service before ever entering a store. Consumers can search, compare, and read reviews for whatever product they’re looking for with only a few swipes and clicks, allowing them to become self-sufficient buyers.
Retail sales incentive schemes are a great way for retailers to show concrete gratitude to their most precious assets—their employees.
Developing A Retail Sales Incentive Schemes
So, how can retail managers keep their employees motivated while confronting difficulties head-on? Many retailers choose to adopt retail sales incentive schemes as a means to reward employees’ efforts.
Special Performance Incentive Funds (SPIFs) are an excellent way to motivate your sales team to achieve better levels of performance, particularly during slower times of the year. The key is understanding how to properly use SPIFs to motivate sales representatives and determining which sales incentive schemes to use to encourage specific sales behaviors.
SPIFs can be used to achieve any specific goal, no matter how big or small it is. A SPIF is an excellent approach to motivate sales representatives to boost productivity and push for increased performance.
Transform the Organizational Culture
When customers shun retail staff, store managers must not just stop worrying about training and development; instead, they must work even harder to get to the hoop. This entails equipping their employees with the abilities they’ll need to enhance and complement the in-person experience. While salespeople no longer need to be product specialists per se, they can nevertheless improve the customer journey during this crucial last stop.
Managers can use this information to re-energize employees, demonstrating that they still have a lot to give and laying the groundwork for an incentive scheme that addresses each of the newly highlighted activities and objectives.
Define Incentive Criteria by Role
It’s only now, after you’ve changed the culture of your company. That you can start thinking about developing an incentive scheme (sales performance management planning). However, before diving in, companies must first identify the criteria that pertain to each role’s. Area of responsibility—or what compensation experts refer to as “line of sight.”
Since salespeople do not establish markups or discounts, it would be illogical to attach a salesperson’s incentive compensation to gross margin. A store representative or associate’s incentive must not be based on net profit in a centrally controlled. Multi-store scenario since they can control several of the elements that generate that amount, such as store costs and overhead.
However, connecting retail employee behavior with the customer’s perspective makes sense. Customer experience is divided into three categories: effectiveness, ease, and emotion. With salespeople needing to be able to connect with customers on a personal level to be successful.
As a result, it is more than just selling and reaching targets; it is also developing a trusted relationship, which enhances the likelihood of repeat purchases. This is an area where proper incentivization must be used to positively reinforce retail employees.
Tailor Plans to the Organization’s Situation and Circumstances
Following that, incentive schemes must be adjusted to the specific needs of each organization. Some retailers, for example, pay their salespeople an hourly fee plus commission. Others only pay on an hourly basis.
Retailers, on the other hand, may decide to keep current commission schemes as BOPIS, or “buy online pick up in-store,” (50 percent of consumers expect to be able to buy online and pick up their goods in the store) increases in popularity.
One thing is certain: when it comes to establishing incentive compensation systems, flexibility is essential.
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Solidify the Incentive Calculation Framework and Process
When it comes to being able to respond and adapt quickly. Retailers must think about how they calculate their incentives – sales performance management planning.
Do they use Excel to administer the plans, or do they use an Incentive Compensation Management (ICM). Tool to automate sales compensation management and compute and report payments?
With the industry’s growing challenges, such as labor management, hiring demands. And demand volatility, more retailers are investing in Incentive Compensation Management (ICM). Or Sales Performance Management (SPM) platforms to offer rigorous planning to meet ever-changing business requirements. Effectively allowing them to track store and employee performance across the organization. And also calculate and administer incentive compensation payments.
Did you have to make any changes to your plans? By providing robust plan modeling tools to swiftly analyze alternative scenarios before finalizing for deployment to employees, a flexible ICM platform enables retailers to successfully manage their plans throughout the year with minimal disruption.
Promote Incentives on an Ongoing Basis
Finally, employee incentives should be offered on a regular basis, especially in retail, and must adapt to the new profile of your salespeople and buyers, particularly millennials, to be effective.
The entire sales force is transforming. Sales leaders must recognize and embrace that the way new talent learns, engages, and executes their roles is and will continue to be very different from previous generations.
Since most employees in the retail industry are paid on an hourly basis rather than a salary, frequency is crucial. In addition to their usual sales incentives schemes, retailers may choose to schedule unique SPIFs throughout the year to stimulate interest. They can be designed for individual winners, store against store(s), a team against team, or managers versus managers.
Quota challenges for individuals, departments, or the entire shop can be just as productive and entertaining, and they can be altered on the fly, in real-time, with the proper solution—something you can’t accomplish with several spreadsheets. Contests can last for a long period, depending on seasonality or customer preferences, and diversity is key.