Mar 01, 2016
Written by: Tim Houlihan
(View Author Bio)
Learn how to effciently and effectively run incentive programs at a local level.
Designing an incentive contest can be easy – almost anyone can do it. Set
some goals, offer some awards, then sit back and watch everyone work like
crazy to achieve their objectives. Right? Wrong.
Contest origination at the local level should always include a review/approval step in the process. Contest designs overflow with good intentions but without a consistent means of checks and balances, a manager could establish unrealistic goals or design a contest that is not in alignment with the expectations of business leaders.
Another potential issue could be the payout to effort ratio. This refers to the relationship between the amount of effort the rep must expend for the payout amount they might receive. All too often, this ratio is out of balance and usually requires effort that exceeds the perceived value of the reward. Providing sales leadership with the ability to review (and ultimately approve or deny) a contest before it is announced allows local mistakes to be avoided. Good governance can also expedite the time from design to implementation, mitigate ill-conceived incentives and ensure nobody is asking for forgiveness.
What does transparency have to do with local incentives? Plenty. Transparency impacts all stakeholders within a local contest. Salespeople feed clarity around the contest expectations, required outcomes of performance and their current progress towards achieving those objectives.
Managers need visibility into team members’ individual and collective performance. Sales management needs line-of-sight to both contest design and results to ensure every contest is aligned with organizational objectives. And most importantly, a contest creator needs the ability to foster transparency to ensure everyone is aligned with all of the contest parameters.
Nobody likes surprises at the conclusion of a contest. Reps don’t like getting caught off guard with “I didn’t know I qualified for a reward” and managers don’t like thinking “I didn’t realize my team was underperforming.” The worst question of all is “Who authorized this budget?” Good tools help track, update and communicate the progression of your contest from start to finish.
Whether it’s through an online tool, a spreadsheet or a self-reported claim form, it’s important to provide real-time progress updates to all audience members. Gone are the days of posting activity results at the conclusion of the contest. Stakeholders want access to activity progress anytime, anywhere and on any device. They want emails and text messages to alert them of contest updates. Timely, relevant and transparent are three words to live by with any local incentive.
Drawing from behavioral economics theory, vividness refers to the fact
that people will remember and respond to things that are graphic and
dramatic. Because salespeople are emotional beings, better results can
be gained when applying vividness to incentives.
Once the rules are defined, the objectives set and the audience
determined, the next question is frequently “What am I going to use as
a reward to motivate my audience?” Frame it this way: “What is budgetappropriate,
inspiring, meaningful and equitable for the effort that I am
asking from my salespeople?” Cash can seem like the easy answer for
both management and the reps; everybody gets it when the reward is
expressed in dollars. But while cash is required to pay bills, it’s not the most
vivid nor the most effective at engaging your reps. Will reps chat about
the cash bonus they earned with co-workers, family or friends?.
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