Not all sales contests are created equal. Sales managers, senior executives, and marketing directors interviewed by SDM agreed that long-term and short-term contests that support each other are absolutely necessary for a successful incentivizing strategy, just as a combination of prizes and recognition are necessary.
In a recent sales contest, Doyle Security Systems Inc. offered an Ipod Touch® to all sales staff with a minimum of 10 residential or five commercial sales of a specific product â€” Total Connect by Honeywell â€” over a three month period. “This contest was created to help build momentum around a new product launch,” says Todd Julien, sales director at Doyle Security Systems. “Three out of 12 qualified for the prize and all contestants sold at least one.”
According to Mary Lynn Moriarity, vice president of marketing at Guardian Protection Services, with any sales contest, it is imperative that the targets and criteria of the contest align with the strategy of the business as a whole and the function of each of its parts. At Guardian Protection Services, contests are held on a monthly and yearly basis and all of them are tailored to each division and its business strategy, Moriarity says. “If the goal is to increase average selling price, we’ll make that the criteria.”
Guardian has a variety of contests based on an electronically tabulated points system where self-generated sales, average selling price, certain types of products and more earn points. There are different levels of recognition with different ranges and requirements. Every division in every branch awards a sales rep of the month. The Pinnacle club award is given to the best qualifying performer on a regional level and announced in the company newsletter. Reps must complete a minimum number of sales to qualify and if nobody qualifies in a certain region, the award is not given out that month. Finally, the salesperson of the year for each division of business is recognized at the national level.
Sonitrol’s franchise businesses conduct short-term contests similarly, establishing and altering sales contests to guide sales in a certain direction. Bill McNabney, manager of national sales contests for the independent Sonitrol network, explains that at the national level, Sonitrol runs quarterly contests with varying criteria â€” which could include new sales, total sales value, or particular products, depending on what it chooses to emphasize.
At ASG Security, recurring monthly revenue (RMR) has been as an area of interest for the past seven years. The company runs an ongoing “RMR Challenge,” in which the more an individual performs over his or her monthly quota, the more points he or she earns. Sales reps earn a pre-established number of points for selling 100 percent, 150 percent and 200 percent of their quotas, in addition to incrementally increasing point multipliers. Points are awarded quarterly and can be redeemed through a third-party online catalog for merchandise, travel and entertainment.
Terry Aronson, residential sales manager at Ackerman Security, describes a sales contest philosophy very much focused on individual motivation and personal competition. Ackerman’s short-term sales contests award prizes such as gift certificates for dinners, and tickets to sports events complemented by a cash bonus on a “beat your best” basis. This motivational strategy assures employees that only they can take themselves out of the game and keeps them working to surpass their own benchmarks.
Most recently, Ackerman held a contest focused on self-generated lead sales. The contest increased the average number of self-generated sales from 10 to 22 in a month. Out of 50 sales reps, 15 went over the 10-sale average and won a $200 gift card to a popular restaurant group and an additional dollar fee per qualifying sale.
Short-term contests are an effective way to keep sales reps consistently productive, especially those working on commission only, says Bob Ryan, senior vice president of sales and marketing at ASG Security. “They have to get excited every day when they come to the office.” That everyday commitment is supported by long-term contests, Ryan adds, which breed loyalty and keep reps focused on a larger goal. “You have to have a blend of short-term and long-term incentives and rewards. We have set up ongoing programs so reps have a reason to perform today with an eye to perform well all year.”
Interestingly, while short-term and long-term contests work, mid-length contests are not as effective. McNabney explains that some contests came up short on results because they went on too long without reaching the scale of an annual contest. For example, McNabney observes that in a six-month competition with a limited number of possible winners and where the stakes were not as high as with an annual contest, many people felt they did not have a chance to win and gave up. With a monthly contest, hopes of winning are constantly renewed and more chances are given.
On the long-term sales contest category resides the ubiquitous annual vacation prize. Many companies offer their top performers all-inclusive trips to exotic leisure vacation spots as well as to national conventions.
Doyle Security, a member of Security Network America (SNA) runs and sets up its own criteria for an annual contest to attend an SNA-sponsored trip. For 2010, Doyle has been focusing on RMR achievements. In order to qualify for the trip, sales reps must achieve 100 percent of their installation sales quota and 125 percent of their RMR quota. All qualifying reps earn the trip and Julien says the company hopes everyone will qualify. In addition to driving sales, the trip “is also a great opportunity to spend time with peers from other companies and share best practices for sales,” he says. This year, the trip will be to Cancún, Mexico. Past trips have included the Dominican Republic and Aruba.
At Ackerman Security, the annual trip is to the Honeywell convention. This year, 10 out of 50 reps are making the trip, Aronson says. He also points out the importance of maintaining excitement over the year and how the simple act of mailing progress reports to employees’ homes can help keep them on track by keeping their spouses â€” who may get excited about the trip as well â€” in the loop. It makes a difference when the spouse or family unit knows about the stakes and can provide some additional support and motivation. Aronson describes that many of Ackerman’s employees wind up working nights and weekends and it helps to have a home environment that supports that extra push.
A large part of the success of sales contests depends on sales managers, Moriarity and McNabney agree. Progress reports are useful for promoting the contests, providing encouragement at the local level, and as motivational tools for managers, who are also responsible for maintaining excitement over a contest and keeping it at the forefront of everyone’s minds and determining which contests generate the most excitement. “We survey managers and ask for their feedback,” Moriarity says. “They talk to the sales reps every day and can tell us whether people are excited about a particular contest. But also, they can tell us where there are opportunities. For example, a few managers called our attention to outstanding sales performance by newer sales reps in various branches. This signaled an opportunity for us to create a Rookie of the Year award, an idea which was well-received by both the sales force and local management.”
The President’s Cup, an annual competition held by ASG, awards an all-inclusive vacation for the top five performers in each sales channel (including residential, small business, commercial, and transfer) and its top managers. This year, winners and their guests will go to Cabo San Lucas, Mexico. Criteria is customized by channel and well-documented, a step Ryan marks as crucial in establishing a selection system that is respected. “You have to make sure when you do this that everybody believes it’s fair,” Ryan says. “If you’ve got 15 offices, quotas have to be uniform.”
Ryan adds that this sort of long-term contest is valuable for ASG because it forces sales reps to push themselves all year long. “By the end of the year, they might have bagged enough commissions to keep it easy,” Ryan says. “November and December are generally pretty lean times, but here it’s go time.” Because the contest runs from January to December, those last few months get very competitive, even among the top performers who fight for the No. 1 spot in their channel and the extra day on the trip that goes along with that spot. “In each category, the top 10 is over 200 percent over their quota. Each one is doing the work of 2 people. And the numbers get better every year,” Ryan says.
Sonitrol offers three categories of awards annually with the intent to include as many people as possible because, as Aronson believes, “leaders of the pack tend to stay there all the time.” Sonitrol’s first award category, the Warrior award, rewards individual top performers based on total contract value of sales, including all products. The top 15 receive a trip to Sonitrol’s national convention and the top five receive a lavish ring. The No. 1 performer wins the sales warrior belt, which they must present to the next year’s winner should they fail to retain their title.
The second category is the Tribe award, which considers total sales out of a particular franchise. Companies are rated and the top 10 are recognized at the national convention. The winner receives the Sonitrol Cup, a 4-foot cup with the winning franchises’ names engraved on it. Again, the cup must be surrendered every year to the new winner.
Finally, McNabney comments that in order to incentivize every last sales rep, especially the younger generation, the Brave award is given to the 10 top performers in lead-generated sales. The winners are recognized at the convention and also receive a cup.
At Guardian, a large part of the focus is in rewarding winners with appreciation and acknowledgment, in addition to prizes such as Super Bowl-style rings, watches, plaques and medallions. Several awards are devoted to long-term career milestones, such as the 500 Club and Millennium awards, which recognize 500- and 1,000-sale achievement levels.
“A lot of people think that money is only motivator and that’s not necessarily true,” McNabney says. “Non-financial awards can mean a lot more.” People want recognition and feeling accomplished and appreciated, he believes.
Selecting significant prizes to go along with recognition then, becomes a pivotal aspect of any sales contest. Prizes must be chosen that appeal to a diverse sales staff.
Aronson shares that one contest did not take off because it lacked a broad enough appeal. “It was introduced incorrectly. We didn’t research the team well enough in advance to determine what they would feel was something working towards. It wasn’t exciting enough and it fell flat at introduction.”
One point everyone agrees on is the importance of promotion and how its absence can render a sales contest ineffective. Julien tells of a sales contest created in response to a competitor who was targeting Doyle and deliberately pursuing its customers. In response, Doyle held a contest targeting the competitor, which was not very successful. The reason, Julien explains, was lack of internal marketing. The contest was not promoted enough and failed to get sales reps to go after these specific customers.
A well-conceived marketing strategy is essential because not every salesperson is created equal, Ryan says. “The way you internally market is different across different channels. Someone who is cold calling and door knocking has to be managed and incentivized differently than someone with a larger salary and who is cultivating long-term accounts.”