Feature Article - July/August 2012

Ready, Steady, Go!

Boosting Sales Performance

By Rick Dandes

During these challenging post-recessionary times, many organizations have turned to using sales incentive contests, not only as a tool for generating additional revenues, but also as a way to boost company morale and reward all sales personnel as certain sales goals are achieved.

But sales contests can also have unintended—and sometimes negative—consequences if they are poorly defined or structured, according to incentive program design experts. One of the early keys to successfully administering these types of programs is to first understand the difference between incentives and recognition.

Incentive programs are contests usually limited to a specific group or unit within a company—most often held in sales departments, explained Derek Irvine, vice president of Client Strategy and Consulting, Globoforce, based in Southborough, Mass. In these contests, individual employees or teams are vying against one another to "win" a prize.

By contrast, Irvine said, recognition programs are ongoing efforts designed to motivate the vast majority of employees by encouraging them to do their jobs in a way that is directly tied to a company's long-term goals and core values.

"From a structural point-of-view, I think the smartest thing to do when designing a sales contest is to start with the end in mind," suggested Mike Ryan, senior vice president, marketing and strategy, Madison Performance Group, headquartered in New York City.

Companies going into the contest design process should have a pretty good feel for what true incremental revenue is and should devise their program to reward against those numbers. Certainly, Ryan added, "you don't want to pay for what you are already getting or what your company is already forecasting."

But in addition to a metric-driven payout—a rule structure for hitting certain revenue goals—you also want to leave room for rewarding behaviors.

Ryan thinks it is critically important to recognize and reward for specific outcomes. "Tough economic times compel people to take shortcuts. So try giving the manager the opportunity to reward and guide sales people toward certain behaviors that help to refocus the team on what works: for example, setting incremental goals that lead up to success. You are not only focusing people on the outcomes, but also focusing them on the best methods and approaches to building customer value, and that often leads to sales." Such programs will also inevitably help to protect the company's brand among prospects.

Why not ask the participants to set their own personal "stretch" goals, asked Ira Ozer, president, Motivation Partners, based in Chappaqua, N.Y. By taking this approach, he said, they are committing to the program, not just reaching for goals assigned based on individual quota or generic objectives for everyone.