Sales Contests And Promotional ProductsBy Patrice A. Kelly
Combine the right promotional products with a solid, well thought-out incentive program, and your sales force can soar to new heights. Here's how you can help make it happen ...
It's a fact of business that sales incentive programs are frequently a great way to motivate a sales force. When linked directly to attainable results, a good program can produce steady growth for a company. But in order for a sales contest to be a good motivator, a few key elements are important – good communication, incremental awards and, of course, the participants have to want the prize.
What does this have to do with you? Well, you're a key player in any sales incentive program, because you have knowledge about the effective use of promotional products that can make or break a contest.
Here's some info to share with your sales manager that can make you a hero at the office, courtesy of a half-dozen experienced promotional consultants.
Step By Step
It's easiest to think of successful sales incentive programs in steps. The first step in creating one is understanding as much as possible about your company's operation. This includes the distribution chain, product line and organizational structure – essential in order to identify the objectives for the contest. "The analogy I use is, ‘You have to stop before you go,' " says Midwest counselor Dick Hamilton. "You have to look at each level of distribution and each level of contribution to the marketing and business mix. Bring them together and see if they're going to effectively lay out into a format that's going to accomplish those [sales] objectives."
The second step is to find out what has been done in the past. What was the success level and structure of the program, including the rules and regulations? If the program was moderately to very successful, its basic structure would likely be kept. "Whatever program you put together, it has to be aimed at results, results and more results," says counselor, Brad Milne. "The thing you want to do is improve employee morale and create awareness, excitement and enthusiasm among the participants of any program. But you have to plan, monitor, control and reward everybody that's involved in the contest." He uses the acronym TEAM to help his clients illustrate the concept to employees: Tell them what's expected; Educate them on how to reach their goals; Assist them in achieving goals; Motivate them through communications and rewards.
Next, a budget must be determined. This should be based on what the increase in sales actually means to the company. It's usually a percentage of the overall sales goal for a specific period. "All sales contests are self-liquidating; the increased sales to be derived will more than pay for the incentive program," says counselor Joe Scott. "You should ask [yourself] what portion of the incremental sales dollars you can invest in the program – and be sure you're comfortable with the investment."
Counselor Kayla Tollen recommends considering every aspect of your program when creating a budget: "You want to know everything about the people to be motivated. You want to know how many people there are. You want to know how much to invest per person, or for the total project. And you want to know how the items and information will be distributed. That has to be included in the budget. If you're going to do, say, 500 mugs and mail them in individual mail wraps, there goes your budget."
What & How
Once the budget is determined, the next step is to define the type of program you want to use – a motivational marketing program or a recognition program. For example, if your company has an existing sales compensation program, how much is the bonus? This helps to differentiate the sales contest from the compensation program. "You create a sales contest to make certain that everyone who works gets compensated and those that do extra work get rewarded," says Milne. "This way, you grow your company by making employees your partners in achieving incremental sales. This is a good idea for growth or recovery strategies."
There are a variety of ways to structure a sales incentive contest. For example, points toward a trip can be split, with a portion of the point value assigned to the biggest-selling items in the company's product mix, while greater point value can be placed on increasing sales of the slower-moving products. A system based on both dollars and units can make the point structure more equitable, allowing everyone a fair chance to win.
"Once you have structure," says Milne, "you set parameters. Revenue is the most important part of the contest. If you include sales volume and determine which products to key in on, you'll increase the bottom line and make more money. Profitability is key in these contests." He also advises tying in a qualifier specifying that it's only product sold and shipped by a certain date at full price (or on a company -sanctioned premium or discount) that counts toward contest points.
Next, the interval between contacts has to be determined with either a four- , six- 12-, or whatever-part program. Consistent reinforcement is an essential ingredient in the success of any sales incentive program. "We recommend that clients take 20% to 25% of their budget and spend it on internal promotion," says counselor Doug Bruce. "We've found the number one reason that incentive programs fail is companies don't properly promote them. Most of these promotions are of long-term duration. What happens is they come out in December and say, ‘We're going to have a sales contest next year.' They just give people a piece of paper [outlining the rules] and after the meeting, the paper goes in the trash. Six months later, no one even remembers there's a contest going on."
"I'd rather see a company do periodic, less expensive imprinted items than do only one item and leave it at that, depending on the timeframe," says Tollen, adding "the longer the time frame, the more you have to remind them of the contest."
After choosing a suitable interval for reinforcement, you need to tackle the details – select a theme for the contest, have a logo designed, determine the rules and regulations, create a progress chart that illustrates the rules, target goals and develop prize levels. The theme and logo should carry throughout the entire campaign, including the letterhead and progress chart.
After determining a theme – something your counselor can help work out – it's time to select the products that will best motivate the target group. Do some homework. Formulate a questionnaire to help determine what the participants find most appealing. In most situations, it's often wise to avoid cash – it can get confused with regular compensation, and there's nothing left to show after it has been awarded. What you're looking for are tangible reminders of performance and achievement.
Depending on the demographics of the participants, the incremental prize merchandise can be mixed male- and female-related products and/or unisex items. Prizes can also be related to what participants like to do together, such as bowling or skiing. Counselor Steven Jernberg advises, "Try to make the prize fit the goal. Otherwise, it won't work. A consistent mistake made by many companies is not supporting the program. Realize that if you don't do it right the first time, it's going to be very difficult to do it in the future, because you'll lose a lot of respect."
The Truth About Travel
Many larger corporations offer travel awards as an incentive component. While travel is certainly a prime motivator for some people, it can be made even more effective by using merchandise in a supporting role. Smaller gifts can be used as reminders throughout the contest. Once the goal is reached, the grand prize trip (which can be a group excursion or several individual trips) can be supplemented by an equally nice gift commemorating or relating to the trip.
For example, one Philadelphia firm's program was built around a world travel theme. Different offices earned points toward the ultimate prize, with the points plotted on a map of the world. A certain number of points got salespeople from Philadelphia to London, London to Moscow, Moscow to Japan and Japan back to Philadelphia. At the outset, participants received a logoed passport case. At the end of the first interval, they were given a travel alarm. The third gift was an imprinted travel kit. At the end of the contest, winners received a full set of leather luggage with the company's logo hot-stamped on the side.
Just remember that travel is but one type of motivator. Another prize might be a high-end leather dress coat, perhaps for a contest with a "Dressed to Kill" theme. "You have to set the prize pretty high. Make it desirable and make it functional," says Jernberg, "If it's not something people can benefit from or utilize, they're not going to be interested. After awhile, money only goes so far. But if you can find a good value in the prizes, you'll really incentivize someone."
Another highly successful program, called "Diamonds in the Rough," was designed for a firm that had done a number of previous incentives. A specific "carat weight" was assigned to the sales goals at each level, beginning with .5 carats. The program encouraged salespeople to compete with their past performance via quarterly, annual and semi-annual goals. Participants were able to select gold and platinum settings for diamond earrings, rings, pendants and other jewelry. Cost-effectiveness was maintained because the stones and settings were purchased at wholesale prices. Winners were also given Gemological Institute of America (GIA) certification of their stones. The program had huge potential for longevity, as participants could get matching pieces in subsequent years.
Whether you opt for merchandise, travel, or – ideally – some combination of the two, all awards should be tied into the program as part of the theme. Take a theme like "sand and sun," for instance. Using these simple words, you can create an "announcement kit" consisting of a folder bearing the logo and containing the rules, an individual scorecard and a pair of real sunglasses. Such continuity helps reinforce the message and generate excitement – and the more often you communicate the better.
The next communication might include a logoed plastic bucket and shovel imprinted with, "Keep digging!" If the participants are going through a difficult period, send them a sweatband with a line like "We can't say its no sweat, but we can help keep you focused," incorporating the theme and logo.
Scott observes, "Generally speaking, salespeople who make their quota make it because they just do – [they] have all their lives. To get them to do more, you have to identify items they'd really like. It's very easy to go to a catalog and pick some stuff out, but for most sales forces it's nothing new. It really has to be something special, and the kinds of things needed to motivate people aren't [always] found in those catalogs. Sometimes you need luxury items that these people may not buy for themselves but would accept as recognition or reward."
There can be different levels of prizes each month as well. Each item should be subtly imprinted or embroidered with the logo and/or theme, perhaps with a color-on-color imprint for an ultra-classy look. At the six-month point, if everyone's on target, a sales meeting could be held in a restaurant or hotel instead of the corporate conference room – with the appropriate promotional products, of course.
"That kind of thing gets the attention of your participants," says Milne. "They start tracking and getting involved, soon they're competing with one another. And once you get the competition going and get a prize going out each month, people will find any excuse to show it off. And that's what you want. You want them to wear or display it in an area of prominence. You develop a contest in the first place to recognize people for doing what you asked them to. When they go beyond that, you reward them. Then all of a sudden they become a stakeholder in the company, instead of just collecting a paycheck."
Asked if there's one component of structuring a sales contest that's the most important, Milne opts for setting reachable goals. "The best piece of advice I can give is to make sure the targets you set are achievable," he says. "Anything other than that, and you're destined to fail. It creates a program that's demotivational, and you might actually achieve negative sales."
And that's certainly not a goal you want to achieve.
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