Captive Sales Force

Sales Contests

&

Sales Recognition

Presentation

Great Ideas Come From Great Clients

Captive Sales Force Objectives

New AccountsQuota AttainmentSales ClubsProduct LaunchTrainingSteps to the SaleRecognition

Monthly Rewards for Quota and Annual Trip Club Rewards

100% ClubTrip Promotion

•Best Buy, buy.com•Travel, Hotel, Air•Entertainment•Events•For Men and Woman

Demo Website:  https://taz.valuesme.comUsername:   salesdemoPassword:    demo

Points Reward Program

New Account Recognition

New Account Recognition

Sales and Service/Support

Quarterly Sales Quota

Stretch Goal Incentive

Variable Ratio Reward Cards

There are 20 rub off spaces on the front of each card. Beneath 5 of the spaces is the word “WIN”. Participants rub off any 5 spaces. The number of WINs uncovered (and your budget) determines the award!

Variable Ratio Reward Cards You want to motivate Sales Reps to Open New Accounts & Sell More of Your Product. Your incentive budget is $25 per New Account & $25 per “X” cases sold. An example of the Variable Ratio Reward Card that could be earned is:

WINs Uncovered Points ($)Value

0 2,000 10 1 3,000 15 2 4,000 20 3 10,000 50 4 100,000 500 5 Cruise 3,000

(or 600,000 points!)Your fixed cost is $24.96 each, which is the average awards value of the card. VR Cards are invoiced as they are issued @ a fixed cost to you.Note: We recommend Sales Managers receive VR Cards based on their salespeople’s performance

Variable Ratio Reward Cards

The primary motivational power of VR Cards

Jackpots on Every Card! (VR Cards are not seeded; each card has the opportunity for the grand prize award)

Every Card is a Winner! (No losers)

BINGO Sales Contest

BINGOBRING IN NEW GROWTH

OPPORTUNITIES HOW YOU PLAY

For Every $200 of Katun Equipment Sold fills a Square

One Row win 100 points Two Rows win 200 points Three Rows win 300 points Four Rows win 400 points All Rows win 600 points $ Sold based on Katun price

to Dealer

A B C D E

1 .

2

3

4

5

Tic Tac $ Sales Contest

HOW YOU PLAY

Sell XXX Graco Equipment to a Customer and fill a Square

Three Squares in a row win 100 points

Six Squares win 300 points All Nine Squares win 600

points $ Sold based on Graco

price to Dealer Select Prizes with the

Points Won

Model Model Model

Model Model Model

Model Model Model

Plateau Sales or Purchase Contest

Win More with Graco

Sell a Lot and Win a Lot Plateau Structure $ Sold based on Graco

price to Dealer Select Prizes with the

Points Won Payout 2% of sales

Graco $ Sold

Points/Gift

$500 $100

$750 $150

$1000 $200

$1250 $250

$1500 $300

$1750 $350

$2,000 $400

$3,000 $600

$4,000 $800

$5,000 $1,000

Promotion is Less Risky thanDiscounts, Rebates or Free Goods

If Your Present Gross Margin Is:

5% 10% 15% 20% 25% 30% 40%

Cut Price

You Need an Increase in Unit Sales Of …

1% 25.0% 11.1% 7.1% 5.3% 4.2% 3.4% 2.6%

5% 100.0% 50.0% 33.3% 25.0% 20.0% 14.3%

10% 200.0% 100.0% 66.7% 50.0% 33.3%

15% 300.0% 150.0% 100.0% 60.0%

20% 316.7% 172.7% 90.5%

Promotion versus Discounts or Rebates or Free Goods

Discounts and promotional allowances used repeatedly become ‘part of the price’, and appeal is lost. Hence, why many automobile companies have gone to a everyday price versus discounts or rebates

A true incentive provides not only an inducement, but adds excitement, interest, drama and a sense of urgency.

Discounts often mean ‘giving away’ the product and ‘doing this a new way’ each time develops into a vicious cycle.

Discounts simply cannot generate the appeal and motivation as can merchandise or travel awards.

A dealer or distributor accustomed to buying on the basis of discounts is vulnerable to your competitors’ inducements.

Discounts are often passed on to the end-user at a lower retail price. Discounts can be easily matched by competitors Non-cash incentives represent minimal investment because the program

funding is accrued basically from increased sales or purchases.

If cash/rebates/free goods/discounts are such a great motivators, why aren’t they selling more or buying more?

Why Incentives Work

Incentive programs can increase performance by up to 44 percent in teams and 25 percent in individuals, according to “Incentive, Motivation, & Workplace Performance,” a study by the International Society of Performance Improvement.

Fewer than one in four American workers is working at full potential; half of all workers do no more than directly asked; and 75 percent of employees say they could be more effective in their jobs, according to research by the Public Agenda Forum.

70 percent of unhappy customers abandon vendors because of poor service, according to the Forum Corp.

A 5 percent increase in customer retention can increase lifetime profits from a customer by 75 percent, according to The Loyalty Effect (Harvard Business School Press), by Frederick Reichheld.

Some 65 percent of executives believe that incentive programs using travel and merchandise are more memorable than those using cash; 60 percent of executives believe that sources of merchandise and travel are more helpful in creating an incentive program than are sources of cash, and 57 percent of executives believe that bonus payments are often regarded by employees as something they are due, according to the most recent “Survey of Motivation and Incentive Applications” by the Incentive Federation.

Incentive Strategy

Performance with Incentive (Move the Bar)

Incentive Strategy

The Target Audience for Incentives should be the Mid-Range Performers.

This is the biggest audience and can have the most impact on overall objectives

Usually a company has:• 5-7% Top Performers• 80-90% Mid-Range Performers• 5-7% Poor Performers (short-term)• Performance will increase at most levels• Variable to market conditions (5-30%+)

Sales Contest Length

Based on Sales CycleThen double Promotion PeriodFlex Period Promotions: Allows

Channel Partners to run the promotion to meet their schedule

Budget Rules of Thumb

Sales: 1-2% if product margins less than 30% and 2-3% if product margins greater than 30%

Incremental Sales 4-7% if product margins less than 30% and 7-10% if product margins greater than 30%

Trial Offers can range from 5% to 20% of Sales

Tracking Sales/Purchases

o Sales Data Track Sales by Distributor Sometimes get sales by DSR

o Claim Prize Claim Form and Attached Invoice/PO Claim Form and then we verify by

Distributor Sales Data Send in UPC’s Payout when Distributor Pays Bills

Sales Training Tools

Virtual Role Play: Allen InteractionsProduct Quizzes with rewards for

passingProduct Sample Kit/DisplayBrand Awareness Advertising:

Counter Mats, Mouse Pads, Wall or Desk Calendars, Mugs, Pens, Caps, Shirts

Prizes

Award Points are redeemed for the top-quality, name-brand items featured in the Awards Selection.

.

Prizes

Amazon over 6 million to select from, web based, self admin

Hand Pick Prizes/PremiumsIndividual Vacation: HMI Miles, HMI Vacation

Packages Catalogs: Hinda, PFI, Quality and Certif-A-Gift,

Top BrandsRKM Game CardsSCA On line GamePro Licensed MerchandiseGift Cards

.

Merchandise vs. Cash

Cash satisfies basic needs which does not motivate behavior. Cash is the currency of compensation and pricing. Use cash and it

becomes part of an individual’s compensation package or a customer’s pricing program. Invariably, if you offer a cash incentive to any audience, internal or external, it becomes a benchmark against which future compensation and pricing issues get measured, leading to a condition known as “program addiction.” Because cash quickly gets mingled with other compensation or expenses (in the case of customer cash expenses)

Major Oil Company Study Summary Non-cash outperformed cash by 46% Non-cash: 37% increase in product mix ROI

Cash: -20% Every $1 invested = an $0.80 return

Non-cash: +31% Every $1 invested = a $1.31 return

Mazda Motor of America

Budget $75 per vehicle

IncentiveCash vs.

AwardperQ’s

StrategyEmphasize Value

Goal: Stimulate B-Series Sales

Situation:

• 90% of Mazda Dealers carry at least one other brand of vehicle

• After introducing many state of the art vehicles, light truck sales suffered

Test:

• Two randomly-selected test groups

• Randomly assigned cash/non-cash rewards

Mazda B-Series Truck Example

2.13

15.65

0

2

4

6

8

10

12

14

16

Cash Districts AwardperQs

% Over Objective

Mazda B-Series Test Results

Number of Districts Compared to Objective

1610

1

1

1521

0

5

10

15

20

25

30

35

Cash AwardperQs

Over Objective

Even with Objective

Under Objective

Thank You