Salespeople chase dollars all day. So when sales leaders sit down and brainstorm incentives, it’s no surprise that cash immediately springs to mind. Cash rewards are easy, straightforward, and as the cliché goes, money talks.

But is its language senseless babble? According to Ken Thoreson, president of Acumen Management Group and author of the book SLAMMED! For The First Time Sales Manager, cash incentives can lack meaning. Sales incentives are intended to convey a sense of pride, but that self-satisfaction doesn’t come through when a cash prize goes into a gas tank.

For this reason, Thoreson advocates incorporating non-monetary incentives into sales contests. In this Q&A, he talks about the most impactful non-cash prizes, advises sales leaders on matching up the reward to the situation, and reveals his rules of a successful sales contest.

Why isn't money necessarily the best incentive for sales teams?

In studies, total compensation does not usually rank in the top three slots as to what top performing salespeople desire -- the leading factors are around confidence in the company/management, culture, and work environment. However, total compensation is a significant factor in recruiting and retaining sales teams.

When it comes to sales games or contests, monetary incentives are not the best options in my opinion. What is important is value and meaning. In building incentive programs or contests, you need to make non-monetary rewards meaningful. The reason cash is not the best incentive is it could be spent without inciting a feeling of satisfaction -- paying bills or buying groceries, for instance. Non-monetary incentives should be chosen so that the salesperson is reminded of their success and achievement on a personal level, among their peers, and even with their customers.

This ego boost is the ultimate objective. As a sales leader, you should strive to build a team that wants to perform at high levels and has the confidence to make it happen.

What are some non-monetary sales incentives that drive performance?

In 16 years of consulting and prior years leading sales organizations, I have seen a wide variety of ideas. One organization was driving sales using a monthly leasing program. To keep everyone’s attention we developed a Corvette theme, sending out sunglasses, Corvette materials and even a few jackets. The kicker was that for every $25K of leased business, the salesperson’s name was “thrown in a hat.” At the national sales conference, two names were drawn, and those two salespeople drove away with red corvettes. That contest is still talked about to this day.

Other non-monetary incentives I have seen work were special clubs where a Rolex watch was given to the sales manager that achieved a certain level of performance, weekend hotel or dinner packages, clothing gift certificates, PC tablets, items to improve their professionalism, and days off. I used to live in Minnesota and we had one parking spot in an underground heated garage. Each month, it went to the top performing salesperson -- a big incentive during the winter!

What is the most effective non-monetary incentive in your opinion?

It really depends on what the objectives of the company are. However, I am convinced that the yearly sales trip where all qualifying reps, team members, and their spouses spend time together at a resort or on a cruise is the best. It builds comradery, pushes people to “make the club,” and provides the ego bump. I have seen this work in both direct and indirect sales organizations, and the cost of the trip is paid for by incentive sales above the normal targets.

Many organizations think this kind of incentive is too costly, but they either don’t understand how it pays for itself or have never experienced the impact. In fact, for individuals or indirect sales organizations, if they hit an even higher pre-set sales target, they can extend their stay a few extra days.

Another objection is grumbling from non-salespeople about their inability to attend “the trip.” I recommend solving that issue by having the sales team vote on a non-sales MVP each month. That individual might receive a gift, but in addition, their name also gets thrown in the trip hat. At the end of the year, one MVP’s name is drawn from the hat to attend the sales trip.

Any oddball sales incentives you've heard of that seem to work?

I have seen the “balloon/dart” incentive work. Starting with some short-term contest -- i.e. the number of contacts made during 2 hours of a blitz event -- winners are handed a dart that they throw at wall of balloons, each with a prize inside. Depending what they hit (if anything), they win whatever is in the balloon.

What have been the least successful sales incentives for driving performance in your experience?

When past contests pitted salespeople against each other, the team tends to look upon a new contest as another tool to manipulate them. Contests are also unsuccessful when programs are not promoted or sold to the sales teams effectively, or the rules change without warning.

Incentives that are easily purchased are deemed less important. Gas certificates, American Express gift cards, and cell phone payments are all nice and useful, but they don’t build pride or amplify the culture of high performance.

How should sales leaders match up the incentive to the situation? Are there some sales incentives that are appropriate in some cases but not others?

Absolutely. In my book Creating High Performance Sales Compensation Plans, I identify a plethora of rights and wrongs. For example, I don’t incent certain sales activities or pipeline value goals because those are management issues.

Again, it goes back to the strategic objectives of the organization. For instance, in some situations, we created a quarterly team contest where if the team hits a certain sales number, a bonus was shared among each member (distributed based upon individual contribution). But while this works in some situations, it may not in another, such as when different teams sell different products or services, or are located in disparate divisions of the organization. Also, if a company is on a fast growth track in a flourishing market, it might not be a good idea.

What are your rules for a successful sales incentive contest?

There are six main things to remember:

  1. It must be fair to all salespeople, from the 10-year veteran to the first year rookie.
  2. The rules must be written out and completely understood by all.
  3. It should use a fun and appropriate theme.
  4. All results must be reported on time.
  5. All prizes must be rewarded on a timely manner and they must be valuable and meaningful.
  6. The contest at a minimum must run at least the length of a typical sales cycle.
  7. Never end the contest the last day of the period/month/quarter. This eliminates last minute problems that might pop up due to vacations, illness, etc. And it makes the life of the sales manager easier as all the orders are in and processed on time!

I would like to hear from readers as to what kinds of sales incentives work and what kinds don’t, and the reasons why. If everyone contributes, we can build a treasure trove of ideas we all can share in and increase the success rates of our teams.

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Originally published Aug 25, 2014 6:00:00 AM, updated November 18 2017


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