Do Sales Contests Work?

By: Dan Kennedy on: March 23rd, 2010 9 Comments

In your my last post we began our discussion on sales and the management of sales people. I pointed out that in managing sales people you’ll actually be dealing with three distinctly different situations.

The first was the poor performers and all the problems that they bring to an organization. But now I would like to shift our attention to the group that is mostly ignored by management which are the high performers.

If you’re looking for a prompt increase in sales a good way to get it is to divert some attention from the mediocre group to the high performance group. It’s much easier to coach a successful person to even better performance than to get a mediocre performer to begin succeeding.

The bottom line is that the only real motivation is self-motivation. You cannot take control of someone else’s thinking. Motivate them and keep them motivated purely through your external influence. The motivation that helps the sales professional achieve peak performance comes mostly from within.

As a manager or a business owner, you should concentrate on providing an environment and an opportunity where a person can develop that self-motivation and a set of good business tools for the motivated performers use.

Accountability is also important. You need to obtain detailed, frequent reporting from your sales people that you can analyze to identify strengths and weaknesses in their performance, prospects or types of prospects being neglected, customer service problems and other situations that you can take action to prevent or correct.

Management’s toughest and most important job is the collection of accurate information about what’s actually going on out there on the sales battlefield. Some sales managers like to use special contests and incentive programs to motivate and reward their sales people.

I think the overall results of such programs are disappointing management more often than not and I believe I’ve identified one common error in structuring these programs. Many contests and incentives base the winning on end results, sales volume, number of accounts, etc. However, for a contest to serve multiple purposes, to motivate, to teach, to affect behavioral changes in the sales people it should focus more on the activities that produce desirable results than on the results themselves.

For example, contest points might better be based on the number of complete presentations made to qualified prospects than on the number of new accounts put on the books.

Do you know what one of the best things management can do to increase the performance for most sales people? I’ll be covering that in my next blog post in just a couple of days.

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    9 Responses

    1. Charles Ra says:

      providing an environment and an opportunity where a person can develop that self-motivation and a set of good business tools for the motivated performers use.
      Accountability is also important.
      collection of accurate information
      this are solid ideas and hard to implement.
      learning relentlessly Dan. thank you

    2. Rob Anspach says:

      One of my clients did a sales contest every month whereby the winner gets a 3-4 day vacation at some lame resort-and the second place winner gets $500 in cash. Since all the names and current figures are posted – towards the end of the month the person in the lead stops selling so he can come in second and get the cash. Even the third place prize of $250 was more coveted than the first place prize ( the trip). After 6 months none of the sales team even cared about the contest.

    3. Charles Ra says:

      After 6 months none of the sales team even cared about the contest.
      Rob, the owner must be changing contest prices here.

      question, are you encouraging with your comments? or dis-encouraging?

    4. Rob Anspach says:

      The point was… And I apologize if I wasn’t clear… Make your sales contests clear and your rewards (or awards) beneficial. It doesn’t make sense to have the first place winner get a trip if they have to spend money on the trip or if the cash offered to the second place has more value to the winner then a non cash prize like the trip.

      If the incentives were all cash the sales team would still be motivated to sell.
      Find a common motivating factor and you can get anyone to sell!

    5. Charles Ra says:

      you got it Rob,
      thanks for the clarification.

    6. Len Foster says:

      Great post Dan! In my experience to not all people are motivated by the same rewards some are cash people some would be more happy with a weekend at a spa. The trick is devising a competition where everyone is motivated to participate.

    7. In my career as a consultant to hundreds of business owners, it’s sad how many sales managers don’t grasp this basic concept: Work with your TOP performers to make them better, and stop wasting your time with the POOR performers.

      Simple and powerful concept — but sadly ignored all-too-often…

    8. Even better for sales contest (or any other) prizes: Offer the winner(s) their CHOICE of prize, such as “A Weekend-For-Two” at Lame Lakes Resort, or $1000 Cash.”

    9. The best sales prizes are luxury items that a person would not want to spend cash on- but would love to do…

      like “VIP tickets” or “first class seats” or “five star accommodations…”

      Cash as a prize has positives and negatives… but Steve is absolutely right… give a choice whenever you can.make the choice “yes or yes.”

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