How To Motivate Higher Returns
By Brian Summerfield
In the past, the premise of sales competitions was simple: Top performers in contests will collect the best rewards. (Again, the Glengarry Glen Ross example applies here.) However, there are inherent flaws in such a simple model. For one thing, as Davis pointed out, salespeople sometimes owe their successes—and failures—to circumstances beyond their control.
"We had a guy working for us, and customers couldn't stand him, but they liked the product and the company. So, this guy kept getting awards every year. I later met some of these [clients] in a different career, and they said, 'I can't believe the company still lets this guy work for them. He's the worst salesman.' But just according to the number of sales, he was highly successful."
Additionally, this kind of program does not motivate, and often discourages, other team members who might otherwise step up their performances, Ryan said.
"Smart companies recognize that if they individualize goals, they can move people up the performance ladder," he explained. "At the branch level, you may find that you have high performers who—if they were to penetrate just one key account—could make all the difference for that branch. Or perhaps you have a few middle performers who need to develop a marketing plan to get into a particular account that's been in the stranglehold of your competition. Or you may have some lower performers who need to get up to speed on the tools and techniques they need to be successful.
"Given the fact that how you drive performance is often an individual thing, some organizations are allocating funding that way. What a lot of progressive companies are doing is allocating the funding down to the local level, that of the sales managers. They may have a small portion of those funds to actually utilize with their salespeople on a one-on-one basis. They might be able to give particular salespeople in their branch or location specific goals that can help them. There are some really sophisticated organizations that have the ability to really segment their sales populations well. They can determine, based upon their sales reporting process, where individuals might need to close gaps. They can target those individuals using direct marketing techniques, where the program is administered through the Web, and you might have a different goal than me, even though we're side by side in the same office. It's a much more effective way to drive performance across the enterprise."