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Incentive for Sales Teams Why money isn’t necessarily the best By Ken Thoreson In studies, total compensation does not usually rank in the top three slots as to what top performing salespeople desire -- the leading factors are around confidence in the company/management, culture, and work environment. However, total compensation is a significant factor in recruiting and retaining sales teams. When it comes to sales games or contests, monetary incentives are not the best options in my opinion. What is important is value and meaning. In building incentive programs or contests, you need to make non-monetary rewards meaningful. The reason cash is not the best incentive as it could be spent without inciting a feeling of satisfaction -- paying bills or buying groceries, for instance. Non-monetary incentives should be chosen so that the salesperson is reminded of their success and achievement on a personal level, among their peers, and even with their customers. This ego boost is the ultimate objective. As a sales leader, you should strive to build a team that wants to perform at high levels and has the confidence to make it happen. What are some non-monetary incentives that drive performance? In my 16 years of consulting and prior years leading sales organizations, I have seen a wide variety of ideas. One organization was driving sales using a monthly leasing program. To keep everyone’s attention we developed a Corvette theme, sending out sunglasses, Corvette materials and even a few jackets. The kicker was that for every $25K of leased business, the salesperson’s name was ‘thrown in a hat’. At the national sales conference, two names were drawn, and those two salespeople drove away with red corvettes. That contest is still talked about to this day. Other non-monetary incentives I have seen work were special clubs where a Rolex watch was given to the sales manager who achieved a certain level of performance, weekend hotel or dinner packages, clothing gift certificates, PC tablets, items to improve their professionalism and days off. I used to live in Minnesota and we had one parking spot in an underground heated garage. Each month, it went to the top performing salesperson -- a big incentive during the winter! What is the most effective non-monetary incentive in your opinion? It really depends on what the objectives of the company are. However, I am convinced that the yearly sales trip where all qualifying representatives, team members, and their spouses spend time together at a resort or on a cruise is the best. It builds comradery, pushes people to “make the club”, and provides the ego bump. I have seen this work in both direct and indirect sales organizations, and the cost of the trip is paid for by incentive sales above the normal targets. In my experience, many organizations think this kind of incentive is too costly, but they either don’t understand how it pays for itself or have never experienced the impact. In fact, for individuals or indirect sales organizations, if they hit an even higher pre-set sales target, they can extend their stay a few extra days. Another objection is grumbling from non-salespeople about their inability to attend ‘the trip’. I recommend solving that issue by having the sales team vote on a non-sales MVP each month. That individual might receive a gift, but in addition, their name also gets thrown in the trip hat as well. At the end of the year, one MVP’s name is drawn from the hat to attend the sales trip. Any oddball incentives you’ve heard of that seems to work? I have seen the ‘balloon/dart’ incentive work. Starting with some short-term contest -- i.e. the number of contacts made during 2 hours of a blitz event -- winners are handed a dart that they throw a wall of balloons, each with a prize inside. Depending what they hit (if any), they win whatever is in the balloon. How should sales leaders match up the incentive to the situation? Are there some incentives that are appropriate in some cases but not others? Absolutely. In my book “Creating High Performance Sales Compensation Plans,” I identify a plethora of rights and wrongs. For example, I don’t incent certain sales activities or pipeline value goals because those are management issues. Again, it goes back to the strategic objectives of the organization. For instance, in some situations, we have created a quarterly team contest where if the team hits a certain sales number, a bonus was shared among each member (distributed based upon individual contribution). But while this works in some situations, it may not in another, such as when different teams sell different products or services, or are located in disparate divisions of the organization. Also, if a company is on a fast growth track in a flourishing market, it might not be a good idea. What are your rules for a successful sales incentive contest? There are six main things to remember: 1. It must be fair to all salespeople, from the 10-year veteran to the first year rookie. 2. The rules must be written out and completely understood by all. 3. It should use a fun and appropriate theme. 4. All results must be reported on time. 5. All prizes must be rewarded on a timely manner, and they must be valuable and meaningful. 6. The contest at a minimum must run at least the length of a typical sales cycle. 7. Never end the contest the last day of the period/month/quarter, this eliminates last minute problems that might pop up due to vacations, illness, etc… And it makes the life of the sales manager easier as all the orders are in and processed on time! I would like to hear from readers as to what kinds of incentives work and what kinds don’t, and the reasons why. If everyone contributes, we can build a treasure trove of ideas we all can share and increase the success rates of our teams. What have been the most/least successful incentives for driving performance in your experience? The least successful incentives I have seen are when past programs were not promoted or sold to the sales teams effectively, ‘the rules changed’ or past contests pitted salespeople against each other-the result the team looked upon the contest as ‘another tool’ to manipulate them. Specifically incentives related to easily spendable items are deemed less important, while gas certificates, AMEX cards, cell phone payments are all nice and useful, they don’t achieve the effect of building pride, increasing the culture of high performance and adding that extra sale to achieve success. SSE Ken Thoreson, Acumen Management Group, Ltd. President, is a sales leadership professional who operationalizes sales management systems and processes to pull sales results out of the doldrums into the fresh zone of predictable revenue. As a sales management thought leader, Ken is recognized as an expert in sales execution, channel management, revenue generation, sales analysis, compensation, forecasting, recruitment, and training within the sales function. Over the past 14 years, his consulting, advisory, and platform services have illuminated, motivated, and rejuvenated the sales efforts for companies throughout North America from emerging, transitional to highgrowth. Visit www.AcumenManagement.com Blog www.YourSalesManagementGuru.com 22 Submit your Articles sales and service excellence essentials presented by HR.com | 10.2014


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