Sales Incentive Problems That Encourage The Wrong Behaviour

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Introduction to Sales Incentive Problems That Encourage The Wrong Behaviour

Sales incentives are supposed to improve performance. But badly designed incentives can do the opposite.

They can encourage discounting, short-term thinking, poor qualification, internal competition and behaviours that make it harder for the wider sales team to succeed.

Many sales incentive problems are not caused by salespeople being difficult or unmotivated. They happen because people naturally respond to what the business measures, rewards and celebrates.

If you reward revenue regardless of margin, do not be surprised when salespeople discount. If you reward new business but ignore retention, people may focus on winning customers rather than winning the right customers. If individual commission matters more than team performance, collaboration can quickly disappear.

The problem is rarely the idea of incentives themselves. The problem is what those incentives unintentionally teach the sales team to prioritise.

For sales leaders, directors and business owners, understanding sales incentive problems means looking beyond the commission percentage. You need to understand how targets, measures and rewards influence the conversations your salespeople have every day.

What Are Sales Incentive Problems?

Sales incentive problems happen when the reward system encourages behaviour that does not fully support the commercial goals of the business.

On paper, an incentive plan might look perfectly sensible. Sell more and earn more. Hit the target and receive a bonus. Win new customers and receive additional commission.

But salespeople respond to the detail.

If the quickest route to target is discounting, some people will discount. If only signed contracts count, salespeople may push opportunities that are not properly qualified. If incentives reward individual results alone, experienced people may become less willing to support colleagues.

That can create a sales culture where hitting the number becomes more important than how the number is achieved, weakening sales team accountability for the behaviours behind the result.

Effective corporate sales training should therefore consider more than sales skills. It should help managers examine whether targets, behaviours, coaching and incentives are all pointing people in the same direction.

Why Sales Incentives Can Change Behaviour So Quickly

People pay attention to what affects their income, recognition and progression.

Highspot also highlights the importance of reinforcing sales learning rather than treating development as a one-off event.

This matters because sales management does not happen only through coaching conversations. The compensation structure communicates expectations too.

A manager might tell the team to focus on value, protect margin and build long-term relationships. But if the incentive scheme rewards volume above everything else, the financial message can be stronger than the verbal one.

This is where sales incentive problems become difficult to spot.

The salesperson may simply be doing what the business has financially encouraged them to do.

Imagine a company repeatedly telling its team to stop discounting. Managers provide value-selling advice and ask salespeople to defend premium pricing. Yet commission is calculated purely on revenue, with no consideration for margin.

When a salesperson is close to target, reducing the price may become the quickest route to commission.

The company has created two instructions:

Protect value.

And get the deal over the line.

If those instructions conflict, the incentive often wins.

Sales Incentive Problems Can Encourage Too Much Discounting

Discounting is one of the clearest examples of an incentive system influencing sales behaviour.

If commission depends mainly on revenue or units sold, a salesperson may see a discount as commercially sensible for them personally.

The customer hesitates. The salesperson reduces the price. The deal closes. The salesperson reaches target.

From their perspective, the strategy worked.

From the company’s perspective, margin has been sacrificed and the buyer may have learned that the original price was negotiable.

Repeated across a sales team, this can become expensive.

Salespeople stop developing the confidence to explain value because discounting becomes the easier route. Sales conversations become centred on price rather than commercial outcomes. And managers then wonder why the sales team is struggling with premium pricing.

This is one reason sales training for teams needs to connect behaviour with the way performance is measured.

You cannot train people to sell on value while rewarding them mainly for getting deals signed at almost any price.

Strong sales enablement means giving people both the capability and the commercial reason to behave in the right way.

Individual Incentives Can Damage Teamwork

Individual commission can motivate people. But it can also create problems when personal success depends entirely on individual results.

Salespeople may become protective of accounts, leads, information and opportunities.

A strong performer may have little financial reason to help a newer colleague, which can reduce sales team productivity when knowledge and expertise stay with individuals. Someone may avoid sharing a useful approach because they see other salespeople as competitors. Internal disagreements can develop over ownership of prospects or territories.

The business then says it wants a collaborative sales culture while financially rewarding individual competition.

This does not mean every company should remove individual incentives. It means leaders need to understand the behaviours those incentives create.

Good sales team training can improve sales communication and consistency, but teamwork is much harder to build if the compensation model constantly pushes people apart.

Managers should ask whether the incentive plan rewards behaviours such as:

• Sharing useful information.
• Supporting colleagues.
• Improving team capability.
• Helping onboard new salespeople.
• Protecting customer relationships.
• Maintaining margin.
• Following the agreed sales process.

If none of these matter financially or culturally, people may naturally concentrate only on the activities that do.

Short-Term Targets Can Create Short-Term Selling

Monthly and quarterly targets are normal in sales. But they can create unintended behaviour when the immediate result becomes more important than the quality of the business being won.

A salesperson who needs one more deal before month-end may start pushing an opportunity that is not ready.

They might offer an unnecessary discount, promise something operations cannot deliver or try to accelerate a decision that genuinely needs more time.

The result may look good on this month’s spreadsheet.

But the consequences can appear later.

The customer may cancel. Delivery teams may inherit unrealistic expectations. The account may become unprofitable. Or the buyer may simply decide that the salesperson is applying too much pressure.

This is another example of sales incentive problems encouraging behaviour that looks successful in one measurement period while damaging performance elsewhere.

Effective B2B sales training should help salespeople understand the difference between progressing a genuine opportunity and forcing movement simply because the reporting period is ending.

The best sales process creates momentum because the buyer has enough clarity to make a decision, not because the salesperson desperately needs another deal before Friday.

Activity Targets Can Encourage Meaningless Activity

Businesses often introduce activity targets because activity is easy to measure.

Number of calls. Number of emails. Number of meetings booked. Number of proposals sent.

These figures can be useful indicators. But they become dangerous when hitting the activity number becomes the objective itself.

Tell a salesperson they must make 50 calls and they can make 50 calls.

That does not mean they will have 50 useful conversations.

Tell them they must send ten proposals and you may receive ten proposals. But some could be sent before the opportunity has been properly qualified.

Sales incentive problems arise when the measurement encourages quantity while the business actually needs quality.

This can make sales conversations too long, reduce qualification standards and create a pipeline full of weak opportunities, leaving leaders with poor sales pipeline visibility.

A salesperson may look extremely busy while still struggling to convert opportunities.

That is why sales process training should focus on what each activity is supposed to achieve.

The question is not simply, “Did you make enough calls?”

A better question is, “Did those conversations move the right opportunities forward?”

Incentives Can Encourage The Wrong Customers

Not every customer is a good customer.

Some opportunities are a poor commercial fit. Others require excessive support, unrealistic pricing or services the business is not well placed to deliver.

But if the salesperson receives commission simply because the contract is signed, qualification can become secondary.

The salesperson wins the deal. Someone else inherits the problem.

Customer service, account management, operations or finance then deals with the consequences.

This is a classic example of sales incentive problems occurring because one department’s success measure does not reflect the overall commercial outcome.

A healthy sales methodology should encourage people to qualify both ways.

Is the company right for the buyer?

And is the buyer right for the company?

This is particularly important in consultative selling, where understanding the customer’s situation should happen before recommending a solution.

Good consultative selling training helps salespeople ask better questions and recognise when an opportunity genuinely fits. But managers must also make sure the incentive system does not punish people for walking away from bad business.

What Sales Leaders Should Measure Instead

There is no single incentive structure that works for every sales organisation.

A short transactional sales cycle needs different measures from a complex B2B environment where several decision-makers may be involved and deals take months to develop.

But sales leaders should look at a broader combination of results and behaviours.

Useful measures might include:

• Revenue achieved.
• Gross margin protected.
• Conversion rate.
• Customer retention.
• Quality of new business.
• Sales cycle progression.
• Forecast accuracy.
• Use of the agreed sales process.
• Customer experience.
• Team contribution.

The right combination depends on your business model.

The important point is that people should not be rewarded for achieving one number in a way that damages three others.

Sales management should also distinguish between lagging and leading indicators.

Revenue is a lagging result. It tells you what has already happened.

Conversation quality, opportunity progression, qualification and value communication are leading indicators. They help explain why results are happening.

This is where sales coaching for teams can make a significant difference. Managers can coach the behaviours behind the numbers rather than only discussing whether the target was hit, which is why effective sales manager coaching matters.

Sales Training Cannot Fix A Broken Incentive System On Its Own

Businesses sometimes invest in training because the sales team is underperforming, inconsistent or discounting too much.

Training can improve capability. It can give people better questions, stronger value conversations and a more repeatable sales process.

But training cannot permanently overcome a reward structure that encourages the opposite behaviour.

If you train salespeople to spend time understanding the customer’s situation but reward them mainly for maximum call volume, there is a conflict.

If you teach value selling but managers celebrate every heavily discounted deal, there is a conflict.

If you want teamwork but commission encourages people to protect information, there is a conflict.

This is why sales incentive problems need to be considered alongside sales leadership, sales coaching, sales culture and capability development.

Good corporate sales training should reinforce the behaviours the organisation genuinely wants to see.

And the incentive structure should do the same.

How To Identify Sales Incentive Problems In Your Business

You do not need to redesign the entire compensation plan before examining whether a problem exists.

Start by looking at repeated behaviours.

Are salespeople discounting too much?

Are weak opportunities being pushed into the pipeline?

Are people reluctant to support each other?

Are deals rushed at month-end?

Are salespeople focusing on easy products while ignoring strategically important ones?

Are customers being handed over with expectations that delivery teams cannot meet?

Then work backwards.

Ask what the salesperson gains from behaving that way.

Sometimes the answer will be poor sales skills. Sometimes it will be weak sales management. But sometimes the behaviour makes complete sense when you look at the incentive scheme.

A useful review should compare four things:

1. What does the business say it wants?
2. What behaviours does the sales process require?
3. What do managers actually measure?
4. What behaviour produces the greatest personal reward?

If those four answers point in different directions, you probably have sales incentive problems.

Fix The Behaviour Before Blaming The Salesperson

When a sales team is missing targets, the easiest conclusion is that people need to work harder.

That is not always the answer.

Sometimes the sales process is unclear. Sometimes managers focus almost entirely on results rather than coaching, while a weak sales conversion rate can be mistaken for a need for more leads. Sometimes sales communication is inconsistent. And sometimes the incentive system is actively encouraging the behaviour the business wants to stop.

Before blaming individuals, examine the environment around them.

If your best salespeople rely heavily on discounts, ask why.

If everyone rushes deals at month-end, ask what drives that behaviour.

If nobody shares knowledge, look at whether collaboration has any value within the performance system.

Sales incentive problems are often symptoms of a wider disconnect between sales strategy and everyday management.

The answer is not to remove accountability. It is to create clearer accountability.

People should understand what good selling looks like, how it is measured and why those behaviours matter commercially.

Frequently Asked Questions About Sales Incentive Problems

What are the most common sales incentive problems?

The most common sales incentive problems include rewarding revenue without considering margin, encouraging short-term deals, prioritising individual results over teamwork and measuring activity rather than quality. These problems can affect sales performance, sales culture and customer experience because salespeople naturally focus on the behaviours most closely connected to their targets and earnings.

Why do sales incentives sometimes encourage discounting?

Salespeople may discount when commission is based mainly on revenue or deals closed. If reducing the price makes it easier to reach target, the incentive can undermine value selling. Sales management should examine margin, pricing behaviour and sales conversations so the reward structure supports profitable growth rather than simply encouraging more signed orders.

Can sales incentives cause a sales team to underperform?

Yes. Poor incentives can distort priorities and encourage activity that looks productive without improving sales effectiveness. A sales team may chase easy deals, neglect profitable opportunities or focus on individual commission instead of teamwork. When a sales team is underperforming, leaders should review capability, management, sales process and incentives rather than blaming motivation alone.

How can sales incentives affect teamwork?

Individual incentives can reduce collaboration when salespeople feel they are competing for leads, accounts or recognition. This can affect sales onboarding, coaching and knowledge sharing. A high-performing sales team needs clear individual accountability, but sales leadership should also make sure the reward structure does not discourage experienced people from supporting colleagues or sharing successful approaches.

Why do salespeople keep discounting even after sales training?

If salespeople keep discounting after value-selling training, look beyond capability. The commission structure, sales management and expectations may still make discounting attractive. Training can improve sales communication and confidence, but behaviour is difficult to change when financial rewards favour quick deals. Sales coaching should reinforce value while incentives support margin protection and better commercial decisions.

Can sales incentive problems affect customer experience?

Yes. Incentives can encourage salespeople to rush decisions, oversell solutions or pursue customers who are not a strong fit. This creates problems after the sale and can damage retention. Good sales strategy should reward sustainable commercial outcomes, not simply signed contracts, so the sales process works for the customer and the wider business.

Should sales incentives reward revenue or profit?

That depends on the business model, but rewarding revenue alone can encourage unnecessary discounting. Many sales leaders need to consider margin, customer quality, retention and strategic priorities alongside revenue. The goal is to create an incentive structure where salespeople can increase their earnings by producing commercially valuable results rather than simply generating the largest possible turnover figure.

How do you know if a sales incentive scheme is working?

Look beyond whether targets are being achieved. Examine margin, conversion rates, customer retention, forecast quality, sales behaviour and teamwork. If results improve while salespeople follow the desired sales process and customers receive a better experience, the scheme is probably helping. If numbers rise while discounting or poor-fit business increases, review the incentives carefully.

Do sales incentives improve sales performance?

They can, but only when the reward supports the right sales behaviour. Incentives are most effective when salespeople understand the commercial priorities and have the skills to achieve them. Sales performance improves more sustainably when sales strategy, sales coaching, targets, capability development and incentives all reinforce the same standards rather than competing with each other.

How can sales leaders stop incentives creating the wrong behaviour?

Start by identifying which behaviours the business genuinely wants and compare them with what the incentive plan rewards. Review margin, qualification, customer retention, teamwork and sales process compliance alongside revenue. Sales leadership should then use coaching and performance management to reinforce the same behaviours, creating consistency between what managers say and what salespeople are paid to achieve.

Can sales training fix sales incentive problems?

Sales training can improve sales skills, communication, qualification and value selling, but it cannot completely fix a compensation structure that rewards conflicting behaviour. If training tells people to protect margin while incentives reward heavily discounted deals, the message is inconsistent. Sustainable sales improvement requires training, coaching, management and incentives to work together rather than independently.

Why is my sales team inconsistent?

Sales team inconsistency can come from unclear expectations, weak sales coaching, different sales approaches or incentives that reward individual shortcuts. A repeatable sales process gives people a common framework, while managers need to coach against observable behaviours. Reviewing incentives is important because inconsistent rewards can reinforce exactly the variation the business is trying to remove.

How do sales incentive problems affect sales culture?

Sales incentive problems can shape sales culture quickly because rewards demonstrate what the organisation genuinely values. If individual revenue dominates everything else, teamwork, customer quality and margin may receive less attention. A strong sales culture combines accountability with collaboration and gives people clear signals about the behaviours expected from a professional, high-performing sales team.

Should salespeople be rewarded for following the sales process?

Following a sales process should not become a box-ticking exercise, but important behaviours can be recognised alongside results. Qualification, value communication, accurate forecasting and opportunity progression all contribute to sales effectiveness. The strongest performance systems measure outcomes while also coaching the behaviours that create those outcomes, helping teams improve consistency without removing individual judgement.

When should a business review its sales incentive scheme?

Review incentives when behaviour and commercial priorities appear disconnected. Warning signs include excessive discounting, weak margins, poor-quality customers, internal competition, rushed month-end deals or a sales team focused on activity rather than outcomes. The scheme should also be reviewed when strategy changes, because yesterday’s incentives may no longer support today’s sales priorities.

We provide corporate sales training for businesses that want clearer, more effective sales conversations. That includes corporate sales workshops, sales coaching, and tailored sales training for teams built around the real conversations your people have every day. We also deliver consultative selling training that helps businesses simplify their message and communicate value with confidence. We support companies across the UK that want stronger sales conversations, better commercial results, and more of the right clients.

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