If At First You Don’t Succeed.

By Malcolm Fleschner

Failure isn’t easy to face, particularly in the sales field, so when a sales incentive program falls short of expectations, management may be inclined to write off the idea of running reward programs at all. But as Barbara Hendrickson of Michigan-based Design Incentives (www.designincentives.com) says, the reasons why a sales incentive goes south can typically be found somewhere within the design of the program itself.

“It’s true that the first inclination is to assume that incentive programs don’t work,” she observes, “but typically there is a real reason that’s easy to define: A – the contest wasn’t structured properly; B – the goals weren’t reasonable; or C – the rewards weren’t commensurate with the activity required. If a company is willing to perform a post-program analysis, however, we can work with them to pinpoint what happened and structure an effective program for the next time.”

During the past few years, when sales organizations have faced having to do more with less, Hendrickson says that she’s seen one particular incentive program shortcoming crop up more frequently: the “one reward motivates none” solution.

“Companies that are working on a limited budget are tempted to reward the top achiever with a single grand prize,” she says. “This seems reasonable on the surface, but is actually demotivating for the majority of the sales force. If you think about it, in any sales force there is a top achiever who always wins everything – either they have the best territory, their customers have the biggest budget, or they’re just that good. But top achievers are self-motivating and typically aren’t the best targets of an incentive program. They appreciate recognition, certainly, but they are going to perform for their own internal reasons.

“Whatever the reason, as the company is announcing the program, the participants can pretty much predict who’s going to win the one grand prize, and the majority of the audience tunes out.”

Instead, she says, a well-designed reward plan will focus its attention specifically on the program participants who might actually be motivated to change their behavior by having an enticing carrot placed in their path.

“The prime target in an effective incentive program are those middle producers who do what they need to do, meet their goals and take care of their customers,” she says. “They’re the ones who can be motivated to do a little more with the right incentive, and it’s with this audience that you’ll see your incremental sales growth.”