How To Motivate Higher Returns
By Brian Summerfield
Time is an important factor to consider in sales incentive programs. In the course of his research, Gopalakrishna came to appreciate just how important this issue was.
"When you put a contest in place, as you look at people's behavior, you need to look at how they behave before and after the contest," he said. "The sales contest in an insurance setting, which is what I studied, basically involved a bunch of independent agents who were selling life insurance, as well as home and auto insurance. One of the things we learned as we studied this area is you see the sales go up during the time the promotion goes on. After the promo ends, you see a huge dip in sales. All you've really done is a time shift of the sales. You gained in the week the promotion was going on, but then the sales boost was neutralized by the drop after the promotion ended."
Also, the sales agents who had several years of experience were good at making sure that all of their higher sales fell within the contest, whereas the newer salespeople put in a lot of effort that didn't pay off until after the contest was over and they were no longer eligible for awards.
"The winners were all coming from the higher experience bracket. Even though the people with lower experience were generating a lot of sales, they weren't winning a lot of awards," Gopalakrishna said.
Because of these factors, Gopalakrishna recommends that sales incentive contests last approximately twice the length of the sales cycle. This duration gives everyone a chance to build sales while the contest is going on and reap as many rewards as possible, but doesn't drag on so long that the program loses momentum. (Note: In the Glengarry Glen Ross sales contest, the sales professionals were given just one week, which obviously is not a realistic time frame.)