The dark side of sales incentives: avoiding unintended consequences

Sales incentives are popular tools used by businesses to motivate and encourage their sales teams. When implemented correctly, sales incentives can be a powerful way to boost productivity and sales revenue. However, when not managed correctly, sales incentives can have unintended consequences that can harm both the business and its sales team. In this article, we will explore the dark side of sales incentives, uncovering the unintended consequences that can occur and discussing strategies for avoiding them.

The Dark Side of Sales Incentives

Sales incentives can produce unintended consequences when they are not carefully designed and implemented. Below are some of the most common unintended consequences of sales incentives.

1. Short-term thinking

Sales incentives can create short-term thinking in sales reps that can lead to risky behavior. For example, a sales rep may be so focused on closing a deal that they neglect to identify the risks associated with the sale. This can lead to problems for both the sales rep and the business.

2. Unethical behavior

Sales incentives can create an environment where unethical behavior is encouraged. For example, a sales rep may lie to a customer to close a sale, or they may cut corners, resulting in a poor-quality product or service.

3. Loss of customer trust

If a customer feels like they are being pressured into making a purchase due to sales incentives, it can erode their trust in the business. A loss of trust can lead to a loss of customers and damage to the brand.

4. Burnout

Sales incentives can lead to burnout for sales reps who are constantly pushing themselves to meet targets. Burnout can lead to high turnover rates, which can be costly for businesses.

Avoiding Unintended Consequences

To avoid the unintended consequences of sales incentives, businesses must be mindful of how they are designing and implementing their sales incentives. Below are some strategies for avoiding the unintended consequences associated with sales incentives.

1. Align incentives with business goals

Before implementing sales incentives, businesses should carefully consider their business goals and align their sales incentives with those goals. This will help ensure that the incentives are encouraging behavior that is beneficial to the business.

2. Monitor sales rep behavior

Businesses should monitor sales rep behavior to ensure that they are not engaging in unethical behavior or taking unnecessary risks. Sales managers should be trained to recognize behavior that is not in line with the business’s values and take action to address it.

3. Communicate the incentive program effectively

Effective communication is essential when implementing a sales incentive program. Sales reps should be informed clearly and regularly about the incentive program, including the goals, rewards, and any rules or requirements. This will help ensure that everyone understands how to participate in the program and what is expected of them.

4. Reward long-term thinking

Sales incentives should be designed to reward long-term thinking rather than short-term gains. This can help sales reps avoid taking unnecessary risks and encourage them to focus on building lasting relationships with customers.

5. Use a balanced approach

The best approach to sales incentives is a balanced one that includes both monetary and non-monetary rewards. Non-monetary rewards can include recognition, opportunities for professional development, and other forms of positive reinforcement.


Q: How can a business measure the success of their sales incentive program?

A: Businesses can measure the success of their sales incentive program by tracking sales revenue, employee engagement, and feedback from customers and sales reps.

Q: Should sales incentives be based on individual or team performance?

A: This depends on the business and its goals. In some cases, individual performance may be a better fit, while in other cases, team performance may be more appropriate.

Q: How often should a business review its sales incentive program?

A: Businesses should review their sales incentive program regularly, at least once a year, to ensure that it is still aligned with their goals and to identify any areas for improvement.

Q: What is the role of sales managers in a sales incentive program?

A: Sales managers play a critical role in a sales incentive program. They are responsible for communicating the program to sales reps, monitoring behavior, and ensuring that the program is aligned with the business’s goals.

Q: Can sales incentives be detrimental to employee motivation?

A: Yes, sales incentives can be detrimental to employee motivation if they are poorly designed or poorly communicated. Businesses must be careful to align their incentives with their goals and communicate the incentive program effectively to avoid unintended consequences.

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