Spiffs, Contests, Internal Incentives, Vol 1

Spiffs, contests and internal incentives can be very helpful, slightly helpful or a waste of time and money. What motivates one may not motivate another. It seems logical that the goal should be to motivate everyone if possible, or as many as possible. But, motivate them to what? Generally, the motivation is aimed at some kind of behavioral change, even if temporary to achieve a specific objective. Cash spiffs, contests and internal incentives can be great tools to help achieve a behavioral change. For volume one, I will focus on contests.

Contests can be fun and rewarding and they can also be demotivating. I have seen both through countless contests over the years. How the contest is structured will determine much of the outcome. Here's an example: Salesman of the month is a common monthly contest in a dealership. There is one winner and is generally the person who sells the most units. Wonderful. We are motivating one person pretty much, perhaps a couple. For the rest of the staff, this contest has almost no value. So, I might ask, "What is the purpose of this contest?" or "What would you like to achieve with this incentive?" A contest that only motivates one or a very few people seems ineffective. If the goal is to encourage mid number sellers to move their thinking upward, it might have some effect, but unless they can see themselves getting to the higher level, it will prove to be the opposite of the desired and be a demotivator. For the lower end of the number of sales spectrum, it is a worthless contest that has zero meaning. There's a better way.

A better way might be to try to motivate everyone every month to win. If you have a salesman of the month, that would mean only one can win. Why not have a sales person of the month for anyone who qualifies for an objective? Why couldn't all of the staff win it? If you think that the top person will be demotivated, that would be wrong. Everyone should be equally motivated because everyone has an equal chance to win. Why? Because you would make a separate objective that is within reach but just beyond each person's own comfort zone based on your own sales statistics. Now, you have a contest that everyone can win if they want to. The only fair and effective opponent is yourself. Having low and mid guys competing with top gals is ineffective. Increasing your entire sales staff 5-10% is a huge success compared with moving the top guy 25%.

Here's two approaches to a familiar theme: You might have a contest over a period of time to achieve a certain overall objective of the store or department. Maybe you want to move some specific units or generate a certain level of gross or just move a certain number of units. Approach one is you find out (and always be on the lookout) what you think motivates each individual on the staff. Some people respond really well to recognition; others respond to trips; to others it is money, and others it is things. It could be anything. I used to respond to trips. I won a lot of trips. Find out what fires up each person and tie a prize like that to a specific objective to them. You might tie that to an overall objective.

The second approach would be to reward specific behaviors instead of a prize at the end. So, for example, you want sales and that requires prospecting, talking to prospects, demonstrating product, giving presentations, writing up offers or proposals, and other things. Reward those behaviors individually. You know that generally so many demonstrations will yield so many write-up, will yield so many sales, so reward the demonstrations and then reward the write-ups. You can keep a count score toward a certain objective or you can pay out a small amount per item, but the whole idea is to get them doing what you know works to create the results meeting or exceeding the objective you have.

Another idea is to make it all a group contest so that if the objective is attained, everyone wins regardless of their contribution to the whole. When I was a young sales manager, I suggested a contest and the dealer thought it was a great idea, so he set the objective of a number of sales for the month and if we hit it, he would take the entire sales staff and their spouses to The Tonga Room and Hurricane Bar at the famed Fairmont Hotel in San Francisco about 50 miles away. The objective was stiff, but I did my best to get everyone excited about winning it. We won it and the dealer came through. He rented a bus, had cocktails on the way down, had an awesome time at the Tonga Room with dancing. The atmosphere was spectacular. This was the mid-1970s. I've forgotten many contests with money, but I remember every trip I've been on. That trip was over 30 years ago and I still remember how much fun it was. The trip was fun, hitting the objective as a fresh, young sales manager was fun. How the dealer put it together and the quality of how he did it was fun. It was a group effort and a group reward.

Contests can be very effective. They deserve a good deal of thought about the objective, how it will be achieved, who it motivates, how it will be dealt with if won and more. They can also be very memorable and a lot of fun. I wish this for all of your contests!

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