Sales Contest

Sales Contests

• Sales contests are short-term incentive programs implemented to motivate salespersons to achieve specific goals or activities

• There are several purposes for holding sales contests:– To make people feel like winners

– To give recognition for good performance

– To set performance standards

– To provide a context for performance improvement and training

– To develop team spirit

– To boost morale

– To make sales jobs more interesting and fun

Objectives of the Sales contest

A contest should have only one, two, or at most three objectives. Following are some objectives that sales contests might have:

• To obtain new customers • To secure larger orders per sales call • To overcome seasonal sales slumps • To get higher rates • To sell a higher percentage of retail, direct, or agency

business • To sell special inventory or packages • To increase the use and quality of sales presentations • To secure a higher percentage of renewals • To improve customer satisfaction (as determined by

before-and-after surveys)

Cont..

• For sales contests to be successful:– Objectives must be specific and clearly

defined– Contest theme must be exciting and clearly

communicated– Each salespersons must believe they can win– Awards must be attractive to participants– Contest must be promoted and managed

properly

Types of Rewards

• Sales contests can offer many types of reward in the form of:– Cash, prizes, or travel– Perceived value very important as it must be of

sufficient value to motivate additional effort

• Promotion of contest important– Launched as a special event with handouts– Large scorecards to communicate progress– Newsletter articles or interim prizes can keep

motivation up

Sales Contests:Recommended Guidelines

1. Minimize potential motivation and morale problems by allowing multiple winners. Salespeople should compete against individual goals and be declared winners if those goals are met.

2. Recognize that contests will concentrate efforts in specific areas, often at the temporary neglect of other areas. Plan accordingly.

Sales Contests:Recommended Guidelines

3. Consider the positive effects of including nonselling personnel in sales contests.

4. Use variety as a basic element of sales contests. Vary timing, duration, themes, and rewards.

5. Ensure that sales contest objectives are clear, realistically attainable, and quantifiable to allow performance assessment.

Case Study : Inside Sales – TeleSpectrum•

TeleSpectrum is an outsource call center with offices all over the country. The Center Manager, was interviewed for this case study. The incentive program he discussed was called “Balloons.”

• He was faced with the challenge to raise his Telesales Reps (TSRs) close ratio (gross sales divided by total calls).

• Knowing that the close ratio is meaningless to a TSR, he had to translate the number into a specific number of gross sales. It is important to speak in terms that are understandable to the TSRs.

• In a call center environment, there is almost always some sort of sales contest being run. Because of this, He was able to create and roll out contests quickly.

• He states that it is important to keep them creative. Otherwise the concept gets stale to TSRs, and you lose the effect of an incentive program.

• The contest was announced in a memo to all reps, and handed to them by their supervisors the day before the contest began.

• Each time a sale was made, the TSR would walk to his/her supervisor’s desk, log thesale, and pick up a balloon. At the end of the day, the TSR with the most balloons won a gift certificate to the local mall.

• This worked out well, as the contest was very visual –this is an important component in a call center environment.

• As per the Manager the prize didn’t matter. It was the competition of the contest, and the recognition that got the TSRs “pumped”. The number of balloons that piled up at each TSRs desk created spirited competitiveness. It was embarrassing to have few or no balloons. It made the reps work harder to beat their neighbor.

• The atmosphere it created was lively, and fun. There were balloons all over the place.• He also stated that in this environment, number of sales, call quality scores, and attendance are

the objectives most frequently used for incentive programs.

Example : Field Sales – Sprint• The objective for this contest was to boost activity in the typically slower summer

months.• The contest took one day to put together• The prize included a weekend getaway to a resort for the entire sales team, if

the team goal was met• The contest was announced in a monthly sales meeting. Ongoing

communication was provided by email and voice mail, as well as in staff meetings.

• A white “leader” board strategically placed in the front of the office was used to track results. Results were tracked and updated on a weekly basis.

• The rankings were public, so competition was implied. This worked in that nobody wanted to be on the bottom, and responsible for the not winning the prize for the whole team. As a residual effect, team members actively helped the struggling reps, so that all could attend.

• Given the prize, both the contest, and the prize itself doubled as a team-building event.

• Manager stated that the biggest mistakes he has seen in sales contests include: poor communication, timely communication, and running concurrent contests which takes the steam out of both of them.

• He also stated that peer recognition is the most motivating factor. The prize takes a back seat. Also, keeping contests simple is best.

Useful info…How Many Prizes? • How many prizes are given in a sales contest is an important

consideration.• In general, it is best to make it possible for everyone to win

something. • Avoid destructive competition. Have several big winners (first,

second, and third place), but also have a little something for everyone.

Contest Frequency. • Do not use sales contests regularly, (see the rewards not as extras

but as a normal part of their compensation package)• Competition generated from a hyped contest can cause morale

problems (especially among those who do not the top prize)• Spread out contests to avoid too frequent post-contest lulls. Two

sales contests a year is a reasonable frequency.

Cont..Contest Duration. • The duration of a contest should be no shorter than four weeks and

no longer than thirteen weeks. • Six weeks is a good duration for a sales contest—long enough to

effect behavior and billing and short enough so that the salespeople don't get bored with it.

Promote Contests. • Promote contests well to keep the enthusiasm level high.• Promote them at all levels of the organization, not just in the sales

department in order to get everyone in the company involved and supporting the salespeople (even include vital support people in prizes).

• Promote the progress of contests on a weekly basis. • Weekly bulletins are a vital element of contests in order to give

feedback and to create both awareness and excitement.

Sales Contest Concerns

• A number of concerns have been raised about sales contests– When not properly designed contests take a lot of

managerial time to administer– Improper contests can actually de-motivate– Do sales contests generate additional sales?– Should sales force be paid twice for doing job?– If contests are for short-term, then why have a “never-

ending” sales contest?– How might a sales contest motivate sales personnel

to greater efforts?– Does a sales contest take into consideration the

needs of the buyer?