The Whys and Hows of Sales Contests

If you haven't already done so, it's time to create a sales contest for your sales staff. The novelty of the new 2006 compensation plan has worn off and your sales representatives are in the "grind" of the year. They need a contest to remind them of their larger goals and keep them motivated. I will address, one by one, the questions my clients typically ask me about the creation and administration of sales contests.

Why do I have to create contests throughout the year?

Before a single dollar of business is closed, sales representatives must deal with tough gatekeepers, disinterested prospects, difficult objections, cancelled meetings, influencers who claim they are decision makers, presentations that go awry, and stalled decisions. Salespeople need their spirits bolstered all during the year to help them deal with these situations, and contests are a motivational and inexpensive way to do just that. Salespeople are also competitive by nature, and by constantly challenging them you will keep their competitive drive alive.

Does a contest always have to reward sales revenue?

Absolutely not. Many, many steps precede a closed sale and they are all critically important. Sales representatives have to research accounts, make prospecting calls, go on appointments, and give presentations. Sponsor a contest that involves successfully completing a certain number of these pre-sale activities during a specified period of time. For example, if the average sales representative makes 4 presentations a month, offer an incentive if they schedule and complete a fifth in a single month or 14 in a calendar quarter.

Why should I have sales contests in my company when my superstar always wins?

Sales contests are not compensation plans and, therefore, can be tailored to the individual. If your superstar typically schedules 10 meetings a month with potential new clients and your other sales representatives schedule only 5, create an incentive around each one of them beating their personal average. The sales representative who goes on 5 meetings a month should be given a goal of 6 and your superstar’s goal should be set at 11 or 12.

Should the reward for winning a contest be additional cash?

No, for two reasons. First, very few people have the self-discipline to hold the cash aside and spend it on something for themselves. Secondly, cash typically gets spent on the everyday mundane things such as the dry cleaning or allowance for the kids. It is better to give out gift certificates to favorite restaurants, movie theaters, or book stores. When they redeem their gift certificates, it reminds them of their accomplishments and makes them feel appreciated by their employer.

Should I hand out the rewards at a staff meeting or in person?

Wait and see. Depending on the contest rules, everyone may not earn their reward at the same pace or even in the same month. It could be more motivating to hand them out individually. Regardless, make it a special event. Present it to them in a fancy box or envelope, include a thank you note, shake their hand, and thank them for their efforts.

Yes, it is extra work to create and administer periodic sales contests. There are payoffs though. If a salesperson typically goes on 4 appointments a month and the contest motivates them to speak to enough people to schedule a fifth, they now see that they are capable of achieving this number on a regular basis. Twelve more meetings a year will result in more presentations which will result in more sales. Discuss this with them. Run the numbers and look at the extra revenue potential. This will result in a more highly compensated sales representative – and they are always more motivated.