“Never discount the value of the incentive,” says Spencer Toomey, Bulova Corporation’s vice president for special markets. “Salespeople are driven as much by recognition as by the award, and getting that incentive is their acknowledgment. You could spend less on a merchandise incentive and do a better job than someone who spends a lot. It’s the power of symbolism. Give them something to remember. If they’re good salespeople, keep giving them strokes.”

While cash usually comes to mind as the prime motivator, according to industry research more than half of all incentive programs harness the power of merchandise. An Incentive Federation survey found that 51 percent of incentive campaigns use merchandise awards. From apparel, timepieces, electronics and gourmet food to sporting goods, jewelry, leather goods and luggage, tangible awards can inspire salespeople to give it their all. Not only does merchandise have staying power, but the reminder of hard work and a company’s appreciation also fortifies your sales force to reach higher levels.

Know the Audience
If an award fails to match the sales force, the mistake may doom an entire incentive program. Understand the makeup of the audience – your salespeople – and their interests and lifestyles. What’s the age range? Is there a predominant gender? What are their marital and family statuses?

Scott Johnson, president of Premium Incentives Inc., illustrates this point by telling of one bank’s incentive programs for its independent brokers. The mostly male brokers are generally in their late 20s to early 40s, with income levels running into the six figures. For rewards Johnson has picked home electronics, golf equipment, lifestyle-oriented merchandise and other luxury items often unavailable at retail outlets. The well-known brand names have included Callaway, Sony, Tiffany and Waterford, although the bank has bought products at a substantial discount.

“Brand names tell people what you think of them,” Johnson says. “We structure the program not as male but as professional. Everybody’s libido was hit somewhere. You have to have something that everybody wants to reach. Electronics is number one, but you try to give them a choice.”

Choices and possibilities abound. During the year 2000 program, a sweepstakes drawing for such grand prizes as a Rolex and a Panasonic HDTV added further enticement. The ultimate prize? A Harley-Davidson FXSTB Night Train motorcycle. “You have to put sizzle in the package. You have to jazz up the program – add flavor and excitement,” Johnson adds. “How many people would go out and buy a Harley? It costs $20,000 and there’s a six-month waiting list. We wanted to get enthusiasm going.”

Once Johnson recommends the prizes, corporate administrators pare down the list with advice from top sellers. The annual program’s longevity sums it all up. Since the contest’s original launch in 1996, it has run annually, save for one year. Along the way, GreenPoint Credit acquired the initial sponsor, Bank of America. Why does the program return year after year? After a sales increase of 35 percent during its maiden year, the campaign has consistently produced an increase of 25 percent annually, Johnson says. “The program pays for itself.”

But not all companies bet their money on a blend of brand names. If a sales force shares lifestyle interests, the target audience may outdo itself for awards from a single specialty retailer. Take Big Dog Sportswear, a name especially popular with men ages 25 to 50. Big Dog Sportswear provides a good fit for an active, pet-loving group appreciative of fun. Karen Cahill, sales director for Big Dog Sportswear, says her company can best help a sales contest run with the big dogs – and get the most out of Big Dogs awards – when the client brings the retailer in early on. Why? To create a buzz about the program. An incentive client can adopt any of the retailer’s tried-and-true Big Dog themes: “Big Dogs Rise above the Competition,” “Think Pawsitive,” “If You Can’t Run with the Big Dogs, Stay on the Porch,” “Think Big” and “Big Dogs Expect to Win.” Big Dog can combine its themes with a company logo, putting a distinctive stamp on everything from internal materials to the awards themselves.

“You’ve given them crystal and you’ve given flatware. Maybe they can buy a polo shirt cheaper from someone else. But we can give value, quality, a brand name and fun. And they can’t be the Big Dog with anybody else,” Cahill says. “Everybody wants to be the Big Dog. It’s a natural for corporate sales.”

With prices ranging from $2 to $100, the products appeal to a lot of companies. A sales region for AFLAC that used Big Dog Sportswear as a sales reward became known as “The Big Dog Region.” Each quarter, top agents, the top rookie and the top district won Big Dog jackets or other items. Agents entered a drawing that included other Big Dog merchandise. Did the sales staff run with the Big Dogs? The “Big Dog Region” rated number one in Washington State in 1998, exceeding its annual sales quota by 160 percent.

Beyond the Numbers
With the right merchandise choices, some incentive programs do wonders for the sales bottom line – and beyond. What are a few of the other ways a successful contest can return a company’s investment? Incentives can build employee enthusiasm and loyalty. They can foster a spirit of competition and teamwork.

Several times annually, Artistic Impressions Inc., a Chicago-area company that markets prints, lithographs, canvas reproductions and original paintings, rolls out contests to motivate its national force of 2,500-plus sales consultants. With different kinds of incentives, the company has reaped benefits.

Merchandise has outperformed a few other reward options, according to Ken Wittenberg, president of Gardner & Geldmacher, a division of Summit Marketing. “With gift certificates, they’re working toward something intangible. They don’t do well,” he says. Wittenberg’s firm has designed sales incentive contests for Artistic Impressions for more than a decade. Programs built around merchandise give the sales consultants a more tangible goal. “When the flier hits the field, everybody sees what they can earn. There’s a tangible product they can work for,” Wittenberg points out. With well-chosen merchandise as the brass ring, short-term contests, especially, prod people to reach, he says. “Smaller programs with shorter terms kick in quickly and work better.”

In January, Artistic Impressions sponsored a month-long contest called the “Fast Start Award.” “You come out of the holiday season and you kick off a new year. You have people who are sluggish and not in the groove,” Wittenberg explains. The campaign offered a range of brand-name products – timepieces from Bulova, Movado and Howard Miller; electronics from Panasonic and Magnavox; leather goods by Coach and Hartmann; and Waterford crystal. “When you’re setting up the incentive program, it’s important to…come up with a good cross-section of products that meet the overall demand, because a lot of items will be very specific to some segments,” Wittenberg adds.

Any sales consultant hitting an initial sales benchmark received a portfolio with a revolving calculator. The employees who performed better selected rewards from one of the three tiers, depending on their productivity. The levels contained items retailing for up to $100 (first tier), $300 (second tier) and $600 (third tier). “There’s motivation to get to the next level,” Wittenberg says. “You’ll have a certain amount of overachievers all the time. The idea is to give everybody a fair opportunity to win.”

And win they did. More than 500 consultants qualified for awards. That month’s sales exceeded the prior month’s numbers by 35 percent and surpassed the previous January’s sales by 30 percent. “They had a record month,” notes Wittenberg.

But sales numbers don’t tell the whole story. What’s more important than the sales increases and direct return on investment? According to Wittenberg, the contests transform average producers into superachievers. “The contest motivates people to stretch. They don’t become high producers for just one time. The contests drive them to become consistently higher producers.”

There’s other good news. Artistic Impressions has found the contests solidify its sales force. How? By boosting retention and luring many consultants from its predominantly part-time sales force into selling for the company full time.

Get Help
Amid low unemployment and frequent business “rightsizing,” retaining key people is at the top of the agenda in corporate America’s boardrooms. There are fewer people doing more of the work and everyone shoulders heavier burdens. It’s no wonder in-house incentive managers often welcome outside support. In fact, manufacturers and their reps provide not just the goods but the help needed to get the job done.

Mary Anne Fontana, president of MAF Marketing Inc., represents Sony electronics in New Jersey and around New York City. Fontana can guide corporations through the slew of program phases – and around the common pitfalls. She’s seen companies make the usual mistakes: unattainable sales goals, overly long program period, weak promotion and poor recognition of winners. Companies pick awards that don’t measure up to the performance required. Sometimes reward choices reflect executive bias. Not everyone golfs. Some people don’t live in homes with doors big enough for a wide-screen TV.

For sales incentives, brand names are a must-have. There must be trophy value. To stay ahead of the competitive curve and get the most motivation, Fontana says, companies should offer the market’s latest rewards on the cutting edge of technological advancement. Another TV set sometimes won’t inspire like a trendy new electronic toy. Plus, items loaded with features stand a better chance of retaining perceived value. “For a sales incentive to make them go the extra mile, salespeople need something they haven’t won before. Otherwise, the program becomes stale,” Fontana says. “The nice thing about Sony is that there’s something everybody wants. People come to us because electronics is a proven performer, and Sony is the premier brand name.”

A major U.S. food company came to Fontana to use Sony to bring out their salespeople’s best. In the fiercely competitive food industry, sales incentives are a fact of corporate life, Fontana explains. “They have no choice. It’s a self-perpetuating process.” For the food company’s sales force, Fontana provided the client with about 100 glossy folders featuring the multiple-tier Sony Collection. The products range from the first level’s Walkman stereo cassette player to the top level’s Sony 43-inch projection TV. The electronics giant created the nine-tier collection to cater to corporate clients trying to motivate various segments of an audience.

Spread the Motivation
What’s the idea behind the widely used tier approach? The greater the sales performance, the greater the reward. With goals attainable for average producers as well as top achievers, everyone has a shot at the winner’s circle. By contrast, the all-or-nothing method too often awards the perennial heavy-hitters even when everyone else beats their quota by 10 percent. Colgate-Palmolive, manufacturer of various household names among consumer products, teamed up with Lillian Vernon Corp. to run a tiered program. In 1999 a Colgate sales office in the Midwest enlisted the cataloger for an incentive effort called “You Can Make a Difference.” Apparently it did make a difference, and this year Colgate expanded the campaign, offering it to sales offices nationwide.

Depending on their achievements, qualifiers could pick rewards from one of the three tiers. Lifestyle-oriented products popular with Lillian Vernon’s regular catalog shoppers were offered across all three tiers: a lavender-scented candle in a silver-plated holder in the first tier, a cotton throw in the second level, a photo album in the top tier. Retail prices ranged up to the top level’s $50. With the cataloger’s insights, Colgate culled its award choices from Lillian Vernon’s 6,000-item selection. From gardening and household articles to personalized and seasonal items, there is a wide selection and wholesale pricing.

The cataloger’s trademark, in-house personalizing service, is no less appealing to clients and never slows prompt fulfillment. Whether an award is embroidered with a recipient’s initials, a company logo or a program name, the personal dimension goes over big with Colgate and other clients, says Cindy Keegan, Lillian Vernon corporate sales account executive. “It’s what stands our program apart from others. A company isn’t just buying a gift certificate. It’s buying well-chosen merchandise and it’s getting…the initials that over time bring back the memory of what the reward was for,” she says. “We add value by personalizing. We have merchandise ready…for shipment. We have the quantities. We don’t require a company to buy up front, so the company doesn’t need to lay out a lot of money.”

Cement Partnerships
While some contests target a sales force only, a growing number of programs cast a wider net, rewarding salespeople and channel partners together. And some lines of merchandise simplify the job of motivating both a distributor network and a sales organization.

Georgia-Pacific’s building-products distribution division has piggybacked incentives for its sales reps atop customer promotions year after year. At Thanksgiving an annual program tantalizes both clients and salespeople with turkeys and hams. Of the 40 regional districts in the division, more than half opted to participate in the Thanksgiving 1999 effort. Ultimately, Omaha Steaks shipped about 1,140 hams and turkeys – up from 1,007 shipped by a different supplier in 1998.

What helps ensure the success of a merchandise-based incentive for these Georgia-Pacific sales reps and their customers? Crowd-pleasing products with a strong brand name and excellent quality, says Eileen Mittleider, a Georgia-Pacific communications manager. But what can tarnish the whole effort? Poor delivery. “That’s the biggest pitfall I run into and the biggest frustration. Once I place the order, it’s out of my hands,” she says. When another supplier delivered late, Mittleider never went back. But when a glitch arose in the Thanksgiving 1999 program, Omaha Steaks promptly reshipped. The glitch: the shipping company mistakenly delivered an Omaha package to a recipient’s side door, where the cooler sat unnoticed for three days. “When there is a problem, Omaha is so quick to respond that it’s never really a problem. It’s the guarantee that if you’re not satisfied, we’ll replace it. With Omaha, it has been a pleasant experience,” Mittleider says.

Year-round, Mittleider runs incentive programs for all 40 districts in the building-products distribution division of Georgia-Pacific, the nation’s leading manufacturer of building products. Districts opt in, each setting their own goals and other guidelines. Various merchandisers from L.L. Bean to Harry & David have done the job. And Visa Gift Cards went over big as a sales incentive. Mittleider says she likes to keep things fresh. The same award can become a predictable expectation. She tries to add variety and be creative to maintain interest. “We try to do different things because it keeps people excited. If you do the same thing, it gets stale,” she says. But for Thanksgiving 2000 she expects to go with Omaha Steaks again. “People are looking forward to it. They know it’s coming.”

Cindy Mielke, incentive sales manager for Omaha Steaks, says she has encouraged other corporate clients to go the route that Georgia-Pacific takes. Piggybacking a sales force incentive onto a dealer-award program motivates the salespeople with the prospect of a piece of the action. “We see more of that than anything,” she says.

About half of Omaha Steaks’ incentive clients like the flexibility of gift certificates. But other customers tend to offer products up front. When titillating your audience with Omaha eats, here’s something to remember: A 7-pound spiral-cut ham ($56 retail price in the catalog) costs another $10 to ship. Items arrive in dry ice and a cooler – guaranteed to be in frozen, excellent condition.

Delivery is Everything
If the reward doesn’t get there in the right condition, the incentive itself easily can be lost. Delayed delivery or other woes may tarnish even the most sparkling program. But seamless arrival of an award wrapped with class speaks volumes. Take Hammacher-Schlemmer, the cataloger with the tag line “Offering the best, the only and the unexpected.” Occasionally with the help of its retail stores, Hammacher takes pride in its ability to deliver its unusual gifts with distinction. A New York wine distributor tapped Hammacher to reward the distributor’s top salespeople. Hammacher’s Manhattan store deluxe-gift wrapped the merchandise and arranged for courier delivery to the wine distributor’s office. “Our stores are a great asset. That’s a big plus for us. The customer came back because of our flexibility and ability to meet their needs. It was easy for them,” says P. Andrew Hannah, Hammacher’s director of retail and corporate sales. Hammacher also has a store in Chicago.

When selecting rewards, corporate clients can check out the Website, peruse the more than 15 Hammacher Schlemmer catalogs issued annually and opt to offer the entire range of merchandise. While Hammacher may lack the name recognition of other catalog businesses, its quality and eclectic assortment play well among sophisticated sales professionals in many companies large and small, Hannah says. He says Hammacher doesn’t promise quantity. Instead, the watchwords include flexibility and service. For instance, a national food retailer wanted stereo systems gift wrapped and delivered on the same day to scores of recipients scattered across North America. Done, Hannah says. “That plays to our strengths. There’s very little we can’t do. We’re flexible.”

One-size merchandise awards don’t fit all. What motivates one sales force may do little for the next. And money hardly guarantees success. A company can spend even less than it did the year before and yet do a better job. Try enlisting employee advice about proposed goals, rules and awards. Once the program launches, communicate – or risk losing audience interest. As people aim for the big one, distribute short-term awards along the way. The right presentation can tie up an incentive package perfectly.

“Salespeople often are driven by success,” says Bulova’s Toomey. “An incentive reward is a symbol of accomplishment. Maybe it’s not the most expensive thing. But if it’s done right, it’s as good as an Olympic gold medal.”