In a recent LinkedIn article, Richard Rosenblatt, CEO of Demand Media, shared the sixth rule of motivation from his series of articles focusing on what he calls the 10 Rules I’ve Learned and Live By to Motivate People and Organizations.

To describe the importance of personalizing the rewards and incentives offered to sales performers, Rosenblatt told a story about how he rewarded two new top performers who’d exceeded their Demand Media sales goals. Instead of simply adding a commission to their paychecks, which is what they were expecting based on experience with previous employers, Rosenblatt wanted to do something different. So he thought about some of the many conversations he’d had with them, and remembered hearing that they both love high fashion but rarely had time to shop for themselves. He then took rewarding to the next level:

“I found a personal shopper at a Beverly Hills department store and gave them the option of spending all the dollars on clothes. We brought in champagne and appetizers, and made a full day of the experience. (Yes, I spent the whole day with them.) I have never seen more excited or thankful team members, and they still talk about how special it was and something they will always cherish to this day. This experience not only motivated them, but it has become a part of our culture and something I often hear referenced in water cooler conversations. …”

“So, if you want to reward someone in a non-impactful way, write a check. If you want to make them feel uniquely valued and eager to do it all over again…reward them with something that speaks to their interest or passion.” (Source: LinkedIn)

Rosenblatt’s story is a shining example of how valuable of a highly personalized and well delivered SPIFF (Sales Performance Incentive Fund) can be to an organization’s culture. That’s the power of strategic incentive structures and techniques. According to a late 2011 study conducted by the Aberdeen Group, best-in-class companies are 45% more likely to leverage special incentives, such as SPIFFs, to drive improved sales rep behavior and business results. While personalized approaches, such as personal shoppers, may take more time to organize and act upon, the benefits to both company morale and the bottom line can be great.

But with the promise of greatness come some challenges. To avoid difficulty when trying to effectively motivate performers and keep them aligned with sales goals, keep these two best practices in mind:

1. Set Expectation and Frequency

Are you creating a reward or an incentive? A reward recognizes outstanding behavior; an incentive drives behavior. Do you want your team to chase the prize, or would you prefer to hand over a reward to top performers at the end of a defined period? And what will the defined period be? Quarterly? Annually? Your answers must be clearly communicated to your team.

2. Keep Your Best Reps Around

Xactly research shows that turnover rates for top reps are the highest on the first and last months of a fiscal year. Incentivize during those those months to make your rainmakers feel valued.

While every rep appreciates a cash reward, offering something that’s personalized instead will show them they’re much more than just a means to the company’s bottom line.

When you’re ready to increase sales performance and drive more strategic behaviors, tell us what you need at @XactlyCorp.