Do you ever run sales contests to reward and motivate your sales team?
The standard contest runs something like this. They work and they don’t work, at least the way most organizations run them.
- Management will choose a contest period, usually a month, a week or a weekend.
- Management will set targets based on the objectives of the organization.
- Management will choose the rewards.
- Management will post sales results where all the sales staff can see them.
- Management will run contest when sales are weakening.
- Management is promoting ‘healthy competition’ within the sales team.
Let’s examine these elements and the possible consequences of them, shall we? Remember, it’s not about whether these elements are right or wrong but rather whether they work or they don’t work to get you and your organization paid in the long run and contribute to operating a sales floor at mastery.
Management will choose a contest period.
When the date and the duration of the contest is announced in advance, there may actually be a drop in business prior to the contest starting as some salespeople actively hold back sales in hopes of having that business qualify for the contest. Therefore, it would be beneficial to hold off on the announcement until the last minute if you run traditional contests. This is not possible, of course, if the contest is tied to an advertised sales event.
The end of the contest will also almost always guarantee a drop in sales as well, often to a level that is below average production because salespeople have been aggressive in beating the bushes to bring in that extra business.
Management will set targets based on the objectives of the organization.
I do not see any problems here unless salespeople are encouraged to push particular products or services without regard to the prospect’s needs and objectives. The customers come first. When the customers’ need are met, the organization’s need to get paid will certainly be met by happy, loyal and referring customers.
Management will choose the rewards.
Merchandize prizes and experiences, (dinners, trips, etc.) prizes do work with many but can actually de-motivate some people who do not want or need the prize. Cash works for others.
Management will post sales results where all the sales staff can see them.
This may be convenient for management perhaps and may be considered a motivator by many managers, but it is potential poison on the sales floor. For everyone who is in any position except first place in the contest, this can have the same psychological effect as management criticizing a salesperson in front of another employee.
Management will run contests when sales are weakening.
This happens seasonally in many businesses. Since management often puts on contests in response to seasonal downturns, many salespeople will withhold business in anticipation, much like when a contest is announce with too much lead time.
Management is promoting ‘healthy competition’ within the sales team. Every sales team has its range of performers. As a result, the outcome of many contests is known before it even begins. I have witnessed an actual fist fight take place on a sales floor based on contest competition. I have also seen salespeople actively work to sabotage another salesperson’s business during contests. Somehow this does not seem healthy to me.