Do Sales Contests Help Or Hurt Performance?
By Dr. Gary S. Goodman
Jill was buzzing about, scrambling really, trying to hatch another daily sales contest.
"We're going to make three teams," she said, exuberantly. "And the winners will get to spin the wheel."
The wheel had spokes, just like on the TV show, "Wheel of Fortune."
Landing at a given spot would bring a prize, such as a gift certificate to a fast food outlet. Or, you could simply walk away with an extra casual-dress day, depending on your luck.
Contests aim at boosting performance, goading sellers to perform. But do they work?
It depends. Every competition that is put forth by management presumes that sellers are not otherwise running at full speed. Contests imply that some are in the wrong gear, cruising, or worse, they are off the racetrack altogether.
But what if team members are doing their best, going at full bore, and there is no extra fuel in the tank, no fumes left to turbocharge?
Will an extra incentive matter?
Not really. Indeed, it could breed resentment, which will then have the opposite of the intended effect. Sellers could get so turned off that they wallow in despair, thinking that prizes and recognition are out of their reach.
Once, I was given a prize for making the most dials of the phone during a given shift. When it was announced, I couldn't help laughing out loud.
Not only was I unaware there was such a prize, but it seemed like a cruel consolation, in light of the fact that I logged one of my worst days ever as a salesperson.
If I could have made half the dials and reached twice as many sales, I would have been much more satisfied than I was, receiving an "effort" award.
Here are five elements of successful contests:
1. The prize must sizzle. Fast food is more like a punishment than a reward. It is far better to tape cash to the wheel. A corporate client of mine always featured a faraway, tropical vacation-for-one, as its incentive. Why? Because the perennial winner had an awful marriage, and this was a chance to flee, at least once per year.
2. If the same person wins time and again, this demotivates everyone else, and they stop trying. Offer multiple awards.
3. Level the playing field. If the quality of your leads is known in advance, distribute them evenly to the crew. Stop favoring the top performers with the best leads.
4. Don't run too many contests. Sellers will become immune to them. Worse, when you fail to offer one, it will seem you have wrongly withheld a taken-for-granted reward.
5. Observe the faces of your sellers as you announce a contest. Are they bright and expectant, or is there a vacant, "Here we go, again" glaze? If they are indifferent, why bother?
In a very real sense, sales contests are redundant. Pay-for-performance, in one form or another, is nearly universal in sales jobs that already offer commissions or bonuses. Thus, contests gild the lily, providing "motivation" to those that are already being motivated.
That's like running high octane fuel in an engine that is already calibrated for regular gas. In a word, it's a waste.
But, contests will persist, if only because they motivate sales managers, by giving them something to do!
Dr. Gary S. Goodman is a top speaker, sales, service, and negotiation consultant, TV and radio commentator and the best-selling author of more than 12 books, including REACH OUT & SELL SOMEONE and YOU CAN SELL ANYTHING BY TELEPHONE! Gary conducts seminars and speaks at convention programs around the world.
His audio programs with Nightingale-Conant include: "Crystal Clear Communication: How to Explain Anything Clearly in Speech & Writing;" and "The Law of Large Numbers: How To Make Success Inevitable." He can be contacted about keynote speeches, seminars and consulting at gary@customersatisfaction.com.
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Good article. The prize must be meaningful too. Competitive people like to compete and they play to win. It's why you keep score in sports. That doesn't mean these competitive top performers need to overwhelm or demotivate others thoudh. Most people like to be praised or recognized for doing a great job. All an individual can do is their best whatever that may be. Thiink about this one. A top performer or performers sees a mediocre performer receive a company award for performance. What does that make the top performer(s) think? Communism elevated the group instead of the individual and eventually fell. There's the old saying there is no I in team but there is in win. Teams are made up of I's. Everybody on a team is different. No two people are exactly alike. Each brings different qualities to the team. A strong team needs strong I's.