What is the difference between a sales bonus and a sales incentives program?

i don't know

Sales Bonus is reward employees differently based on their performance.

Sales Incentive is based on individual’s performance against the targets set.

I agree with Mr. Jetley and Mr. Mayaleh.

There are many companies that do not distinguish between these two programs (Unfortunately). However, there are many differences.

A bonus is a reward that is given at the end of the selling period (year) usually defined as a factor of the monthly/ annual salary depending on the total performance of the employee. For Sales people, not only the sales results form an evaluation point, but also other performance indicators such as teamwork, flexibility, overtime, behavior at the office, ....

An incentive is a reward that is paid based on a clear structure that depends on the achievements of clear goals. In Sales, it is the achievement of the sales target. It is usually paid on monthly or quarterly base. How much is it? That can either a pre-defined amount whenever the employee achieves the target or a pre-defined structure that depends on the percentage of achieved results with reference to the target. For example, if you reach110% of the target, you get110% of the incentive.

Incentive : Short term programs (Daily/Weekly/Monthly basis)

Bonus : Time bounded programs (Quarter/Half or Yearly basis)

Sales Bonus Plans

 A bonus plan for sales representatives is only one component of an overall compensation plan. Bonuses normally are paid to salespeople who meet established quotas, generate new business and retain current customers. Many variables come into play for businesses when developing sales bonus plans, including territory size and potential, current economic conditions, the size of the company, types of products or services being sold, and the types of behavior that the company wants to reward.

Sales Incentive Program

Sales incentive plans strengthen your company -- as long as they are properly designed and executed. The key is to make your incentive plan fit your overall business strategy. Pick incentives within your budget. Confirm that your staff understands the guidelines. Communicating a clear vision, following through on your commitments and honestly assessing the results will help ensure your incentive plan’s success.

Strategy

Sixty-four percent of977 companies surveyed in August2009 revised their sales compensation plan that year, and62 percent changed their plans for2010, according to WorldatWork, an international human resources association. The top reason for the change in2009 – cited by74 percent of companies – was to align sales incentive pay and business strategy. Eighty-four percent revised their2010 plans for the same reason. In some cases, the revisions were intended to increase a new product. In others, they were intended to increase sales of an existing product. As a business owner or manager, you should determine what best fits your business strategy. For example, maybe you are searching for new customers. Or maybe you are trying to sell more to existing customers. Your incentive plan’s goals should mirror your company’s goals.

Budget

Don’t sacrifice your profit margins by paying excessive bonuses or doling out lavish awards that you cannot afford. For example, you might need to determine whether an all-inclusive trip for two is worth the resulting sales. You might also need to determine whether you are pinching your bottom line by encouraging staff to discount products and services for the sake of winning sales prizes. Determine how much you can pay in rewards, then pick the appropriate reward.

Measurement

Even the best salespeople cannot control the economy, clients’ budgets or other external factors that affect a customer's willingness to spend. Encourage activities that lead to results. If you want new customers, track sales calls with prospects. Proposals made to existing customers might be appropriate if your goal is to strengthen relationships. Clarify your expectations and focus your staff on related actions to achieve your goals.

Evaluation

Assess your plan’s effectiveness by recording and analyzing sales booked and profits generated. Examine the activities that created the results. If all of your sales reps increased their appointments by20 percent, then perhaps that becomes the base for your next incentive plan. In the WorldatWork survey, almost80 percent of respondents changed their sales compensation plans every two years or less. Review your incentive plan regularly, along with your company’s goals, to ensure consistent and desired results.

Commission/incentives

By definition, commission is a percentage of a sale that is measured in either units or dollars of revenue. In other words, for every $1 the sales person delivers in revenue, they earn X%. This model is often deployed for sales hunters (100% new logo acquisitions), contract sales reps and broker models. Payouts are typically distributed monthly. The right time to deploy a commission-based sales compensation model would be when:

• A company is in high growth mode
• The company goal is heavily revenue-driven
• There are no assigned territories
• The sales cycle is short
• No base salary is paid (or it is very low)
• setting clear quotas is not possible

Bonus

A bonus is an incentive that is paid when an individual meets performance criteria against a specific goal. In this case, someone achieves a revenue milestone of $10,000 and is paid $1000 as a result. Examples of roles where bonuses are paid might be Account Managers, Portfolio-base sales roles and Key Account roles. Situations when you would deploy a bonus-based sales compensation model would be:

• A company with moderate or slow growth
• Sales’ focus is based on more than net new revenue, like preserving an existing revenue base
• Other Management by Objective (MBO) goals exist (gross margin, customer satisfaction, customer churn)
• Territories exist, but are unbalanced in terms of potential
• The sales person’s influence in the sale is not directly tied to closing it
• There are multiple people on the “selling team” who contribute to the end result

Even though commissions and bonuses are very different, they are not mutually exclusive. There are situations where applying both to your sales compensation model makes sense. For example, a company that has reps managing a base of legacy revenue while selling new products and services to new markets might deploy a bonus for the legacy revenue and commissions or SPIFs on revenue in the new markets. One thing is for sure: If you are out of alignment with your incentive models,you ill not meet your goals.

Agreed with expert answers.

Bonus is  calculated on yearly compensation basis 

Incentives are calculated by the occasion of each performance achievement

Strongly agree with Mr. Santosh Kumar Jangid Santosh

additionally i can say that

SALES BONUS : On achieving sales units

SALES INCENTIVES: On exceeding sales units.