Downsize Your Corporate Incentives

When it comes to diamond rings, ice cream scoops and TV screens, bigger is always better, right? But what about with sales incentive programs? According to Joel Silver, the founder of SalesDriver (www.salesdriver.com), a leading online provider of sales force incentive programs, today’s corporate incentive programs are getting bigger than ever, reflecting the greater business trend toward consolidation and centralization. But Silver argues that this trend, rather than improving matters by offering more expensive rewards and taking administrative responsibilities away from district managers, is in fact diminishing programs’ motivational impact. Here’s why.

1. Avoid the more competitive, less competition trap.
Competition is a critical element of any sales incentive contest. Yet when an individual rep goes from competing against 15 fellow salespeople to competing against the company’s entire 2,000-strong sales force, prospects of winning drop considerably. Competition works best when competitors share a social environment and can push one another to achieve.

2. Reconcile apples and oranges.
Different sales divisions strive for different goals. One may focus on bringing in new business while another concentrates on driving more sales from existing clients. So that everyone competes on a neutral playing field, companies frequently water down the tracking variable to the lowest common denominator, which fails to accurately reflect participants’ efforts. Salespeople perform best in sales contests when they have very specific targets to shoot for, and when those targets are related directly to what the company wants them to achieve.

3. Don’t give them a complex.
As a program grows, so does the complexity associated with the rules and rules structure. Companies wind up producing War and Peace-size contest brochures just to explain it all. Salespeople take one look and say: No thanks. They might wind up winning something, but not because they knew what to shoot for.

4. Relieve administration frustration.
Large programs require more work to update results – a task no one enjoys. As a result, the numbers typically are only updated quarterly. To be motivational, however, a contest must have regularly updated results that participants can check to monitor their progress and stretch their performance. Updating results quarterly offers the motivational equivalent of running no incentive at all.

5. Remember that less is more.
Gargantuan, impressive rewards that only a precious few can possibly win only motivate a select number of salespeople. When you offer smaller rewards people feel they have a genuine chance of winning. It may seem counter-intuitive, but smaller rewards actually do a better job of motivating a larger portion of your sales team.