Feature Article - September/October 2013

Beyond the Contest

Sea Changes in Sales Incentives

By Brian Summerfield

Major new trends in sales incentives programs over the past few years can be broken down into two categories: those that sprang from changes to sales priorities and processes, and those that resulted from external factors such as technology. Within each of those very broad groups are developments—alignment, talent management, social media and mobile, to name a few—that are forcing sales managers, directors and executives to get more creative and innovative with their rewards programs.

Don't misunderstand: The traditional sales contest is alive and well. There will always be a place for it because of how most salespeople are motivated, said Mike Ryan, senior vice president of Madison Performance Group in New York City. "Salespeople by their nature are very competitive," Ryan said. "They even expect companies to put motivational things in front of them."

"It depends on the audience, type of contest and payout," added Ira Ozer, president of Engagement Partners in Chappaqua, N.Y. "For example, sales contests for internal employees are still as effective as always, especially if the award is meaningful, the value is worth the effort, and there is a competitive structure so that salespeople want to win to be perceived as the best."

But sales incentives programs aren't standing still. They are going beyond the traditional contest in order to meet the needs of enterprises and adjust to changing attitudes and demographics of sales teams and consumers. "Innovation in the sales process will escalate and evolve as the traditional sales models that many companies use become less effective," Ozer said. "For example, creating personal relationships with clients and prospects will always be important as long as we are selling to humans, but with the advent of more powerful search engines, account research tools and social media systems, we will use more inbound and outbound campaigns, referral marketing and other new methods of selling to leverage our time and make more effective connections than methods used in the past."

Here's an overview of the dynamics that are driving change in incentives and rewards programs today, and what the future holds for this space.