|
|
|
|
|
Comments or Suggestions?
|
|
|
|
|
|
Share this Article
|
|
By Joel Silver, Founder and GM Business Operations, SalesDriver.com
A problem with sales incentives is that they often induce poor sales practices rather than the intended results. Real success comes only when sales incentives are aligned with the company's business goals. That's the key to building an effective sales incentive program.
Building a sales incentive program can be easy; building one that works is much more challenging. For example, an effective sales incentive program should be linked to key business objectives: strategies, tactics, timelines, etc. Building and running a sales incentive contest in a vacuum (without regard to company goals or input from the sales team) can guarantee the contest's downfall before it gets launched. Timing and synergy within your organization are the keys to the contest's success.
Also, a successful program must be structured in a way that resonates with participants. A sales contest, for example, has to jump off the page at you. It has to be exciting, fun, stimulating and, most of all, motivating. When planning contests, sales managers need to provide:
- Achievable and reasonable contest targets.
- Rules that are easy to follow and understand.
- A theme that, as my good friend Bruce Fuller says, "cranks 'em up".
- Rewards that are viewed as valuable by the salespeople in the contest.
A powerful program also needs momentum. To do all this, the sales manager must communicate the benefits and rewards of the initiative clearly at the outset and continue to pump people up throughout the contest.
In the end, a well-built sales incentive program adds tremendous value to a company. It can improve lagging sales numbers and morale, boost productivity and generally create a more motivated workforce.
To create an effective sales incentive program for your company, use the following the six steps:
Step 1: Reassess current objectives Before launching a sales incentive program, consider your company's business objectives and the current strategies in place to achieve them. Do you have the time, funds and resources to run a successful sales incentive program? Most traditional sales incentive programs are time-consuming and sometimes exhausting if built and run in-house. There are a number of respectable incentive agencies that can manage your contest for a fee. Also, you may wish to investigate new Web-based sales-incentive contest companies.
Online contesting is fast, inexpensive and relatively easy. In the $23 billion incentive market, you can be sure that companies right now are lining up to provide you with the ways and means to develop your sales contest online. Online, you can find information on gift certificates, debit cards and services such as catalog customization, worksheet tracking programs and award auctions. Also, the Internet has spawned a number of other companies interested in helping your e-contest.
For example, traditional brick-and-mortar companies are developing an online presence to assist you with travel and merchandise selection. Further, other companies are forsaking traditional contesting and are forming strategic relationships to deliver 100% online sales contesting from the creation of your contest to the fulfillment of your rewards (online shopping).
Step 2: Test the market. Once you've determined that an incentive program is aligned with your objectives, test the waters. Conduct informal research among those on your team who will be involved in the program to see what motivates them to sell. Money, travel and merchandise are common rewards.
Also consider what kind of contest motivates them:
- A hit-the-target structure rewards salespeople for reaching a set goal monthly, quarterly or annually. Only those who hit the target are rewarded.
- An activity-based program rewards assigned tasks with credits that can be used toward rewards. Activity-based contesting is much more inclusive, but it is incremental; if there are five people in the contest, perhaps only three will have enough reward money to choose a valuable reward.
- The ultra-competitive winner-takes-all format rewards only the highest achiever.
Choose the rewards and the contest structure that resonate best with the program participants and company culture, and which give you the best mileage.
Step 3: Set the targets If selecting the hit-the-target or activity-based programs, set and prioritize goals according to degree of difficulty and level of value to the company. Try to get buy-in from salespeople on the targets. Ask them whether the targets are attainable, whether they make sense and whether the rewards are enough to get your salespeople motivated.
Step 4: Set the rules The previous step leads us naturally into a discussion about rules, which each incentive program must have. Decide when a contest begins and when it ends, who is eligible, the structure of the contest, the targets, the rewards and any other rules that must be obeyed. The key to setting the rules is to share the information with all the participants. E-mail makes this task relatively easy and provides a detailed electronic file and reference point.
Perhaps you have $5,000 to spend on a sales contest. Portions of this amount must be set aside for the development of the contest and contest materials (signs, communiqués, memos, meetings, etc.), staffing, and managing and fulfilling the rewards of the contest (shipping and handling). Once you factor in these hard costs, you can set your targets. For example, with a $5,000 sales contest budget ($2,000 going to hard costs), you can offer first-, second- and third-place rewards of $1,500, $1,000 and $500.
Once targets are set, ensure accurate mechanisms are in place to measure them. Sales managers have to be diligent in this matter. A sure-fire way to derail a contest is the detection of cheating via false reporting.
Step 5: Give the program a theme Creating an appropriate theme for a sales contest can reinforce your organization's culture, create a bond among program participants and generate enthusiasm toward the program. A company that conducts a lot of business on the golf course might select a golfing theme; an automobile dealer may choose a race car theme; and an IT company may decide to choose a sci-fi theme. Incorporate the theme by using appropriate language, colors and imagery in all communication materials.
Step 6: Select rewards This step presents a weighty challenge. What motivates one person may not motivate another. How do you choose the right reward? Let's say you choose a winner-takes-all format. Tom, your top salesperson, enrolls in the contest only to find out that the reward is a new set of MacGregor golf clubs. Tom's wife just bought him a new set of Callaways complete with a swank new Big Bertha driver. Chances are that Tom will not be motivated to win another set of clubs.
Another likely scenario is that you choose gift certificates from a major retailer. Sally, Tim and Sarah win the contest. They are all excited about the gift certificates. Tim, however, hasn't been inside a shopping mall since the early '90s and, truthfully, isn't likely to drive to the nearest mall too soon. What happens to the reward? Check Tim's top drawer three months later, and you will see.
Many companies have found success in providing a rewards program that provides points or "dollars" that can be used to purchase goods from a selection of items in a catalog or though a major online retailer. Other companies offer redeemable coupons.
When your contest finally gets rolling, you'll appreciate the planning you did before the contest, as you concentrate on the surge of sales coming in as a result.
Joel Silver is the founder and General Manager of Business Operations at SalesDriver. SalesDriver is the leading on-line provider of sales force incentive programs. The incentive programs run by SalesDriver use the Internet to maximize flexibility, communication, and ease-of-use, for both management and sales force professionals. SalesDriver was founded in 1999 with the goal of providing sales professionals with an affordable, convenient, and fun alternative to traditional incentive reward programs. The company is headquartered outside of Boston in Maynard, Massachusetts, with its main technology office in Toronto, Ontario, Canada.
Printer-friendly version
|
|
|
|
