President’s Club Programs: The Who, What, When & Why

Compensation packages can vary widely and sales professionals can typically negotiate on base pay, bonus structures and extra benefits to make a job even more lucrative. According to a recent survey, one type of additional compensation offered to 50% of Treeline, Inc.’s clients is a President’s Club or similar incentive program for top achievers.  If you don’t have one, your business needs to implement a Winner’s Circle, Top Earner Club, President’s Club or Achiever’s Club sales incentive program to continue to incentivize and motivate your employees. 

The Carrot: Why Businesses Need a President’s Club

High-performing sales professionals look at more than just base salary and total compensation when considering a potential job offer. In addition to standard benefits, companies that sweeten the deal with the opportunity to be rewarded with an all-expenses paid trip with the President’s Club can be a deciding factor. While these trips can be pricey, and especially so for smaller companies, they provide businesses with strong Returns on Investments (ROI) by increasing employee motivation to the highest levels to not just reach this elite club once, but to also remain there, year after year. Your hardest-working sales professionals fight to hit challenging sales goals every year and many times will continue to hit the mark to be a repeat winner. With a relatively small investment in a reward trip, businesses can use this enticing opportunity in the recruiting process to capture the attention of the top earners who will bring new energy to the sales team.

Choosing the Right Type of President’s Club for Your Business

A President’s Club should only reward between 5-20% of your employees to encourage healthy competition that will drive sale cycle completion. When incentive programs become unattainable or have an elite-only status, they can have the adverse effect and become demotivating for team members.  Picking the best structure for your business can ensure a strong ROI from employee motivation and greater employee retention. Whether you are looking at beginning a top earner’s club, tweaking one you already have or bringing a club trip back, picking the right one for your sales team and company goals is critical.

1. Fixed Sales Target Model This type of President’s Club rewards all sales members equally who hit a predetermined sales goal for the competition period which could be a quota percentage, a minimum sales goal, or both. According to Treeline’s recent survey, about 40% of our clients use this model.

• • Who Should Use It: Businesses that want to motivate a larger group toward hitting a goal can develop a fixed target model.
  • Potential Concerns: Some top earners may sandbag their sales once they hit their goal, making it challenging to evaluate potential quotas and goals for upcoming years. And, if a larger group than anticipated hit the mark, a bigger trip payout will be required but companies will likely experience a greater ROI with stronger sales and increased enthusiasm from the President’s Club trip.

2. Highest Percentage Over Quota Model This model offers a reward when a salesperson exceeds their quota, and the reward designation is offered at a percentage over that quota. If the President’s Circle is established at 115% of the sales quota, a salesperson would earn the trip at 116% along with someone who hit 150% of their quota. This model is also represented by about 40% of Treeline’s clients, according to our most recent survey.

• • Who Should Use It: Companies who are adding new sales professionals regularly can benefit from this model since the payout is achievable for every sales quota, no matter how small relative to the rest of the sales team.
  • Potential Concerns: Top goal-hitters could be less motivated to surpass quotas past this threshold.

3. Fixed Percentage Model This incentive model rewards a set percentage of the team, regardless of whether quotas or goals are hit. For example, the 10% Club would only recognize the top 10% goal- or quota-hitters on the sales team.

• • Who Should Use It: Companies with large sales teams are the best fit for a fixed percentage model because costs for incentive trips can be easily managed with a set number of winner slots awarded each cycle.
  • Potential Concerns: Smaller companies may find that only awarding a small handful of award trips is not motivating for the sales team, pushing the incentive into an elite club instead of a potential reach for growing sales professionals.

4. Quota Met Model This incentive model rewards sales team members who meet or exceed their quota, regardless of the quota size compared to the rest of the company.

• • Who Should Use It: Companies with smaller sales teams with less complex metrics typically use this incentive model. Treeline’s recent survey about President’s Club Rewards defined a “smaller sales team” as those between 10-50 sales members.
  • Potential Concerns: For smaller companies, expensive reward trips can be a challenge to fund every year if quotas are not carefully evaluated every year.

Other Incentive Options

In addition to President’s Club trips, high sales team performance is also encouraged by other incentive programs. Commission accelerators that kick in after hitting 100% quota increase employee motivation and ensure you do not have employees “sandbagging” deals as they are incentivized to close as much as possible once they hit their kickers.  Other incentivizing alternatives to consider in addition to or in place of an all-inclusive trip are Winners Club Dinners, variable levels of Sales Prizes or Year-end Bonus Pools for top earners.

The Bottom Line: Your Company Should Reward with a President’s Club

In 2023, we will continue to see these types of trips happening as a well deserved reward for those who were top sales producers in 2022, even if companies may be tightening the belt in other areas. It is likely that in 2024, however, we will see fewer incentive trips offered or trips that are pared down with fewer extras (like plus-ones) included in the trip. Ultimately, companies may need to find a way to reduce the total cost of their Sales Incentive programs but to keep them going so that top performers are always celebrated.