Challenges of designing sales incentive programmes for the motor retail industry
Designing sales incentive programmes for the motor retail industry – whether for your own sales force or a channel partner – presents several unique challenges due to the complexity and variability of the market. It’s a task requiring specialised skills and expertise in incentive and technology design that few businesses have in-house for either the development or ongoing management thereof.
In fact, in a 2022 survey by Channel Marketer Report and Demand Gen Report, fewer than 20% of business-to-business (B2B) executives said their channel partner programmes were “very effective”; while another research survey by Forrester done in 2020, covering 10 000 business leaders, showed that 58% of the incentive programmes had failed miserably – only 5% achieved set objectives, while the remaining 37% could only achieve the objectives partly.
In South Africa, the motor industry alone spends over R250 million annually on dealer sales incentives, while the broader sales incentive sector exceeds R2 billion across various B2B industries. Globally, the sales incentive industry is valued at an astounding $90 billion.
Given the Forrester research stats, it’s clear that almost 60% of the investment into sales incentive programmes is lost – ultimately not moving the needle on sales performance, losing revenue, not to mention racking up huge opportunity costs.
One of the industries that relies heavily on sales incentives to motivate and reward sales forces is the motor retail industry – but the industry dynamics present significant challenges in the design, implementation and ongoing management of such custom programmes.
Here’s why:
Technology integration
Integrating a sales incentive programme with existing sales, customer relationship management and enterprise resource planning systems can be complex and time-consuming. Rapidly evolving technology and incentive design trends often see bespoke programmes becoming obsolete long before achieving a return on the cost of the custom development.
User adoption
Getting sales teams to adopt and consistently use a new tech-driven incentive programme can be difficult, requiring training, intuitive user interfaces and ongoing support and communication to ensure high adoption rates. Reward and gamification elements must be thoughtfully designed to sustain long-term interest and engagement across a very diverse demographic and generational mix of salespeople.
Convenience and accessibility
A sales incentive mobile app is a non-negotiable in the motor retail industry where sales forces are typically a much younger generation of digital nomads, highly familiar with mobile technology and using mobile apps for various tasks including work-related activities. They expect intuitive, user-friendly mobile experiences for their work-related apps, too.
Customisation and flexibility
Different sales teams, individuals, dealership sizes and motor manufacturer brands will have varying needs and preferences. Developing a sales incentive programme that is customisable and flexible enough to cater to a diversity of requirements and metrics, while maintaining consistency and transparency, can be hugely challenging.
Real-time tracking and reporting
Implementing real-time tracking of sales activities, sprint campaigns and performance can be technically challenging. Ensuring the accuracy and reliability of this data is crucial for maintaining trust in the programme. Sales teams need real-time notifications about their performance, new incentives or changes in sales targets, ensuring they are always informed and motivated.
Behavioural insights
Leveraging data analytics to gain insights into sales behaviour and adjusting the incentive programme accordingly requires advanced analytics capabilities and a deep understanding of what drives sales performance to make data-driven decisions to enhance sales incentive strategies.
Cost and return on investment
Developing and maintaining a custom programme comes with hefty investment costs, both in financial and human resources, and the ongoing costs of maintenance, communication and support.
High-ticket items
Motor vehicles are high-ticket value items with marked variability on models and pricing. Incentives need to be designed to cater for the entry level vehicle sale right through to the luxury, top-end vehicle, with sales incentives that are substantial enough to be motivating, but also sustainable and justifiable for the dealership.
Market fluctuations and economic cycles
The automotive market is highly sensitive to economic conditions. Incentive programmes must be adaptable to economic downturns and booms, and even seasonal sales patterns that impact the effectiveness of certain sales incentives at different times.
Product complexity and diversity
The motor retail industry offers a broad range of vehicles, from budget cars to luxury models to trucks and commercial vehicles, each requiring different sales strategies and incentives. Incentive programmes must account for these differences, ensuring fairness and motivation across all product lines.
High competition
The motor retail industry is highly competitive, with numerous brands and dealerships vying for market share. This requires innovative and attractive incentive programmes to stand out.
Brand loyalty vs volume
Incentives must balance between building long-term brand loyalty and achieving short-term sales targets. While incentives can boost sales, they must be designed to ensure they do not erode profit margins excessively.
Sales staff motivation
Incentive programmes must be perceived as fair and achievable by sales staff to effectively motivate them. Good incentive programmes can help retain top talent, but poorly designed ones can lead to dissatisfaction, low morale and high staff turnover.
Performance tracking
Clear metrics and regular analysis are essential. Programmes need to be flexible enough to be adjusted based on performance data and market changes and be updated and deployed in real time.
It was solving these challenges and complexities for vehicle manufacturers that spurred the development of performXP, a mobile app-first designed by the Achievement Awards Group to transform dealer sales incentives and B2B loyalty programmes.
The result is a fully customisable, scalable and mobile solution that delivers significant advantages including:
Cost savings
Developing custom programmes requires specialised skills, extensive testing and ongoing maintenance. By opting for the performXP solution, the development costs are already amortised by the developer, and any required customisation costs significantly less, with support, updates and maintenance built in. As a home-grown solution, it’s also free from the impact of fluctuating exchange rates, with local development and support.
Rapid deployment
White-label capability is ready to use with extensive customisation options, allowing for quicker implementation. Since the core functionality is already built and tested, the solution can be deployed reliably and timeously across the dealership and franchise network.
Scalability and flexibility
A fully scalable solution, ready for deployment, that grows with the business needs. PerformXP can be customised to a significant extent to fit branding and functional requirements. Small to medium size businesses can ‘self-manage’ their incentive programmes, while larger corporations can use performXP as part of a comprehensive end-to-end dealer/distributor incentive solution.
Real-time data
Access to comprehensive, real-time data at individual, dealer, or branch level with personalised sales information and dealer dashboards. Actionable data insights increase engagement, inform strategic decisions and influence sales behaviour.
Rewarding and driving sales performance
Provides real-time visibility of sales performance, allowing for the management and monitoring of sales activities, performance tracking and data insights. Real-time leaderboards foster competitive camaraderie and motivation with gamification elements such as ‘spin-and-win’ competitions, points, performance-tiering and leaderboards. Salespeople can access their performance information any time and redeem rewards instantly with a huge range of options, backed by mobile-first design.
Expertise and support
Developed and managed by experts in their field who bring experience and specialised knowledge to the table – not only in terms of technology but from a sales incentive design perspective that connects your organisation’s goals to your incentive programme tactics. Integrated in-app participant support is linked to a contact centre for more complex queries.
Compliance and security
Built-in compliance and security features reduce the risk of regulatory issues or data breaches.
Designing, implementing, communicating, managing, measuring and refining an incentive programme hinges on an ocean of depth, strategy and technology that sits behind all the behavioural science that underpins any successful incentive programme.
performXP brings a transparent, customisable and highly scalable approach to channel-partner sales incentives that addresses the unique challenges of the motor industry, while overcoming the challenges associated with legacy systems, disparate data sources and in-house solutions.
Jean Claude Latter
Channel & Workforce Solutions Director
Gordon Wilson
Business Development Director
