Corporations today are all about encouraging best practices adoption, whether from part-time clerks toiling in the shipping department or frontline sales reps dealing with customers every day. Corporate executives figure that as long as employees are going to be engaging in practices anyway, why not shoot for the best, right?
The problem, says Joe Lethert, CEO of Performark, a Minneapolis-based incentive solutions provider, is that while many organizations promote the idea of best practices, too few think through how to motivate employees to genuinely adopt new behaviors in their day-to-day efforts. In sales, Lethert says, this problem typically manifests itself in misdirected rewards programs.
“The key is to recognize that you can’t manage results – you can only manage the behaviors that lead up to them,” he explains. “Yet many reward programs focus on results, which in a protracted, complex sale might be a long way out. So salespeople often lose sight of the reward at the end of the rainbow. That’s why it’s wise to keep the tasks leading up to the finish line constantly in front of them.”
Of course sales organizations first need to determine just what their best practices are. Thankfully this task does not require the investigative skills of Sherlock Holmes. Lethert says that when working with client organizations, he always conducts interviews with the top salespeople and their managers. Then, based on these discussions, he develops a step-by-step template for successful selling. From these steps, he says, he creates an activities-based program with corresponding rewards.
“Take the example of a manufacturer selling copiers to dealers and or distributors,” he says. “Once you know what the top people do, you can take that sales process and divide it into six parts, for example: 1 – target the right market; 2 – target the right accounts within that market; 3 – get an appointment with a decision maker; 4 – make a demonstration to the person who can sign a purchase order; 5 – follow up; 6 – make a sale. The idea in an activity-based program is to reward the first five steps with a relatively small prize – say $10 in points – and then give a big payoff when the sale is made.
“Having traced the key steps leading up to the sale, from the lead to the conclusion, one thing that really stands out is the tremendous drop in close rates when people leave out a step. Yet a lot of salespeople honestly believe that skipping steps will get them to the sale faster, though that’s not the way it works. They need to learn that closing is something you earn, not something you do.”
Lethert says Performark also recommends getting top reps involved as mentors to coach their lower-performing colleagues on the sales staff. Programs even can include a small override as incentive for the mentors, he says. “The better their students perform, the more incentive is applied to the mentors’ noncash program,” he says.
Lethert adds that sales organizations also should pay close attention to the way they budget for best practices-related sales incentives. The cost of such programs should depend essentially on just how much behavior change you’re asking for from program participants.
“For budgeting you need to look at the average earnings of the people you’re trying to influence and the amount of time you have to get the job done. The key factor, however, is the difficulty of the task,” he explains. “Some things are really easy and don’t take a lot of effort – say you want sales reps to ask a question at the end of every call they make. Other things are more difficult – say you ask reps who have always taken a product selling approach to move to a system selling approach. The latter is a major change, he notes. You need to allow for substantial up-front costs to get the kind of behavior change needed to do business completely differently. If you don’t put enough money into it, you won’t make it happen.”