6 Reasons Sales Contests Rarely Work
A while back I was able to get Steve Marx, author of Close Like The Pros, on the phone for a few minutes.
We talked about the fact that neither of us truly believe in sales contests, as they’re used in today’s sales climate.
I had also previously reprinted an article by Dan Kennedy that basically agreed with us.
So take the time to listen thru the player below or download the mp3 and listen on your iPod or other mp3 player.
Do Sales Contests Work?
Every single day I get several emails concerning sales contests. Each person is as sincere as they can be in wanting to motivate their sales force.
I’ve tried to work with a few of them, but deep down in my sales-minded heart, I knew that if the sales person wasn’t self-motivated, then there was little anyone could do to motivate them over a long enough period to count for something.
I’ve wished for enough time to research the subject properly, but you know what happens when you wish for something and not work for it.
Not much. Action beats asking almost every time. Almost.
A day or so ago, I was pleased to read an email by Dan Kennedy that said it almost exactly like I wish I’d said it.
I wrote and asked for permission to reprint it here and my request was granted, as long as I gave full credit, which I was quick to agree to.
All I ask for you to do is to consider clicking thru and signing up for Dan’s email course titled Successful Marketing Strategies, which can be found on Dan’s website. Visit his site and wait a couple of seconds and a fly-in popup will come across the screen and allow you to sign up.
I save all of Dan’s emails, as part of my swipe file and I just looked back and saw that I’ve been a subscriber since early 2004, so don’t be afraid, he won’t hurt you and his info is top notch.
Now, here’s Dan’s take on sales contests:
Do Sales Contests Work ?
In your last Success Marketing Strategy we began our discussion on sales and the management of sales people. I pointed out that in managing sales people you’ll actually be dealing with three distinctly different situations.
The first was the poor performers and all the problems that they bring to an organization. But now I would like to shift our attention to the group that is mostly ignored my management which are the high performers.
If you’re looking for a prompt increase in sales a good way to get it is to divert some attention from the mediocre group to the high performance group. It’s much easier to coach a successful person to even better performance than to get a mediocre performer to begin succeeding.
The bottom line though is that the only real motivation is self-motivation. You cannot take control of someone else’s thinking. Motivate them and keep them motivated purely through your external influence. The motivation that helps the sales professional achieve peak performance comes mostly from within.
As a manager or a business owner you should concentrate on providing an environment and an opportunity where a person can develop that self-motivation and a set of good business tools for the motivated performers use.
Accountability is also important. You need to obtain detailed, frequent reporting from your sales people that you can analyze to identify strengths and weaknesses in their performance, prospects or types of prospects being neglected, customer service problems and other situations that you can take action to prevent or correct.
Management’s toughest and most important job is the collection of accurate information about what’s actually going on out there on the sales battlefield. Some sales managers like to use special contests and incentive programs to motivate and reward their sales people.
I think the overall results of such programs are disappointing management more often than not and I believe I’ve identified one common error in structuring these programs. Many contests and incentives base the winning on end results, sales volume, number of accounts, etc. However, for a contest to serve multiple purposes, to motivate, to teach, to affect behavioral changes in the sales people it should focus more on the activities that produce desirable results than on the results themselves.
For example, contest points might better be based on the number of complete presentations made to qualified prospects than on the number of new accounts put on the books.
Dan would go on to say that he’ll be giving me more info about increasing the performance of sales people in his next email, which I’m looking forward to.
Click thru and signup today and start learning direct marketing from a modern day master tomorrow.
What Makes A Good Sales Contest ?
What makes a good sales contest is no easier to define than what makes a good salesman. There are obviously far too many factors to consider to say one or two are the deciding ones. And each situation will dictate which factors are key.
But, for those of you whoo need someone to foolishly make a statement, I’ll go ahead and point out a few of the most important factors.
Timing. How often you run a contest, how many you’ve done as of late, the time of year,etc. These are integral parts of the equation of a good sales contest. Most companies don’t have enough and they wait too long in between. Also, they make them last too long, when they do run one. Consider a short, quick, unannounced sales contest to shake up your sales force and their habits.
Theme. Old theme, new theme, one theme, two theme. Who knows which will do best ? Not I, that’s for sure. I don’t know your market or team. Try ‘em all. Try a ” The Search For Missing Sales ” contest. Challenge your team to find new business with old customers. Or how about a sales contest themed ” Lost ” ? Find the missing sales ! It might be just what your Lost ( the TV show ) addicted sales team needs.
Showmanship. Do you have you a multimedia presentation that doesn’t seem to excite your prospects anymore ? Have a contest to see who can come up with the most addictive, powerful, exciting, informative multimedia presentation and then give the winner’s presentation to your whole force. I’d pay to have mine done professionally, just to try and win and not have to use someone else’s presentation. Might work. Might not.
Follow-up. If you don’t follow your contest all the way thru and execute all the details exactly, you’ll end up with a sales team that doesn’t get excited by your ideas, because they know you’re all bark and no bite. Put the busiest, most anal-retentive person you employ in charge and let ‘em torture your sales force with follow-up !
Payoff. It’s as important how you pay as it is what you pay. A presentation in front of everybody is 100 X more powerful than an envelope thrown on a desk. If I thought everybody was gonna have to watch me collect my loot, I’d work like a wild beast to win the contest. If I know from past years that all I’m gonna see is a company memo, well, I’m not gonna get too excited. A dinner is worth 3 X as many sales, at least, so put up, then follow up.
I’m sure you guys can come up with more good info, so leave me a comment and help this conversation spread. You could also do a Trackback, a post on your own blog or email it to everybody you know !
Thanks in advance for any help you provide.
What Do Sales People Think Of Sales Contests ?
Up til now we’ve only looked at theoretical reasons and facts about sales contests. Now let’s look at some real world info.
Do salespeople like sales contests ? Your financials will tell you yes, I’m sure. The salespeople themselves have always told me yes, as well.
Do they induce more work ? Yes. Are they worth the extra effort ? Yes.
Here’s some of the answers I found, with regards to actual thoughts of sales people :
” Contests keep a live salesman on his feet - always alert to take advantage of every sales opportunity….. However, the prize won is the lasting symbol of successful participation. ”
One company I was with, years ago, let the leading salesman from the previous month keep a dog bowl on his desk to signify him as the ” Big Dog “. After winning that bowl for 11 of 12 months one year, it disappeared ( jealous co-workers ), so I had a name plate made that said ” Big Dawg “. My Sales Manager, who had up til then called me ” The Living Legend “ and/or ” The Total Package ” started calling me Big Dawg and it’s still with me to this day, when I see someone from Louisville.
Sales people love plaques, trophies, certificates and such. Use ‘em to your advantage. That little bit of wampum will get you lotsa sales.
” … act as a stimulant and contests at regular intervals are very desirable. “
” … promotes rivalry among men, induces extra effort and makes them more money …”
” Can do no harm and makes extra money for those willing to work. “
” … are inspiring in that they offer rewards for extra effort; they show initiative and since nobody cares to be a failure, more enthusiastic results are created. ”
” Contests make the salesman unconsciously work harder. They like the glory of seeing their name as prize winner. “
” Although I always work hard, I find a deep desire to win every contest. This makes me work harder still. ”
” The salesman who is not interested in a sales contest doesn’t belong in sales. Salesmanship is a game of matching wits, both with the customer and your fellow salesmen. It is the race that you run and lose that inspires you to make yourself better fit for the next race. “
” I know they are valuable. Some salesmen do their best at all times, still a contest brings out the best that there is in a fellow, and in most cases enables him to accomplish more. There are salesman who never win a contest, but even so, they are able to see what the other fellows do, and in many cases will make an extra effort which strengthens their will to win and makes them better salesmen thereafter. ”
Seems to me that there is a lot of good karma created by a sales contest and very few drawbacks. Start one next month and see if they work for you.
Sales Contests - Other Objectives
Mostly we think of sales contests as ways to increase sales. There are other reasons to hold sales contests, and we’ll look at some of those today.
New or Neglected Products
If you’re introducing a new product or if you have a surplus of a product that didn’t really sell like you thought it should have, then you’ve got a reason to hold a contest. You’ve also got a reason to send out a news release, but I’ll let you click that link and get the info you need on that from someone better educated than I, David Meerman Scott.
New Advertising Campaign
Do you have a new way to advertise your product ? A new display for all your dealers ? A new tie-in with another company ? If so, you’ve got a reason to have a sales contest. And you have a reason to send out a news release. See above.
How about these objectives.
Collecting bad debts. Give your salespeople .03 of every dollar they collect that was over 30 days old. .05 on every dollar that was over 60 days and .10 for all over 90 days old. I’ll bet your receivables drop dramatically within 30 days.
If you have a manufacturing facility, spend some time finding ways to create parameters that will pay the employees who reduce waste or downtime, as well.
Finding new uses for products. Is there a segment of the business world that might use your product if they knew it exisited. Ask your salesforce. Ask your customers. Ask your vendors. I’ll bet one of those segments will come up with a new list of clients in no time.
Do you struggle finding new salesman ? If so, have a contest to allow your salesforce to find you some new recruits.
Raising money for charity. Have a contest to see which part of your organization can get the most dollars donated to a charity you support.
Downtime caused by accidents. You should always have incentives for you employees to work safely. You’d be surprised how badly people want those T-shirts and hats.
Non-selling incentives. Give incentives to employees to tell people where they work. Have them get the signatures of people that they told about where they work. I’ll guarantee new sales from this. Award prizes to the top 50%.
These are just a few ways to increase profits very inexpensively and they’ll also improve morale. Which also happens to increase profits. Which normally improves morale. You get the picture yet ?
Do Sales Contests Have Drawbacks ?
Since Doug mentioned in his comment on the previous post that there are negatives to sales contest, I thought I’d add to that thought.
Yes. Sales contests can have drawbacks. Just as any other business tactic, they can have bad, as well as positive effects.
Three of the most obvious disadvantages are :
1) Pre-contest stalling
2) Over-selling
3) Post-contest slump
It’s a well known fact that if you announce a sales contest too early your salespeople will hold off on some sales and putting them into actionable orders.
One way to defeat this is to announce a contest as retroactive to a prior date. That way your sales team will always sell to their potential, knowing that you’ll never penalize them.
Over-selling can also cause your organization some goodwill and can do harm to relationships that are well established and very profitable.
Make sure your sales team uses the Hippocratic Oath - First, do no harm. Or something like that. You get the picture. Or if you know what it is, feel free to leave your thoughts in the comments.
Lastly, we look at The Slump. It’s gonna happen, so you might as well plan for it.
Is there a period during the year that’s historically slow ? In my business it’s January and February, so if it ended right before that, we could use the down time to recharge our batteries and take a vacation to a warmer clime and it wouldn’t hurt as bad, manpower wise.
Also, it’s not uncommon for a rash of new business to come in as soon as a sales contest is over. You might find that a separate contest for the bottom 50% of the previous participants, held as soon as the first one is done can be a very profitable venture.
There’s some of the drawback and a few ways to overcome them. If you can add anything to this conversation, I’d appreciate some help in making this profitable for all of us.
What Could A Sales Contest Do For Us ?
So far, all the posts have ( mostly ) been about what a sales contest does for the salesman. Now let’s look a bit at what it does for the organization.
First, someone could ( and has ) write several books about sales contests and what they do for your organization, but let’s look at some of the successful stats anyway.
Insurance companies used to do sales contests almost continually. So what, you ask. So how about the fact that an insurance policy is something that pays the company and the salesman over and over and over. The company paid the salesman a wee bit extra and profited for years.
Does your product pay over and over ? If it does, you might profit more than anybody from a sales contest. Subscription ? Membership site ? Monthly pay ? Yearly renewal ? All of these models are prime candidates for sales contests.
Do you ( foolishly ) believe that your sales people don’t need a sales contest, because they can sell without one ? You’re right, BUT they will sell even more with one. Guaranteed.
Look at the National Football League. Every week two teams meet with equal talent, equal size, equal speed. Who wins ? The team with more motivation and more emotion. That’s what a sales contest does for your people. Gives them that emotion and motivation.
Sales contest have been proven to work in publishing, retail, wholesale, distribution, laundries, manufacturing, bakeries, etc. You can’t name a sales force that can’t benefit from a sales contest.
Try one today and profit forever.
Competition Drives Salespeople
Take a piece of paper and draw the traditional Tic Tac Toe diagram on it. Set it in front of anybody in your office and then put an x anywhere except the center square. I will bet that 99.99% of the people you challenge will accept the challenge and put an 0 in the center square.
The average person loves a fight and always thinks they will win.
Ever since man moved out of cabins and into houses, they’ve wanted something bigger and better … and they’ve wanted to show it off to their neighbors.
Men want to win. Charity begins at home. We all think we’re handsome and smart and are more than willing to tell you how smart and handsome we are.
Imagining you’re smart and handsome is a good start, but you’ve got to prove it to others. And THAT is just what a sales contest can do. It takes our inborn desire to show others how good we are and gives us a stage to do it on …and get paid for doing it.
It almost seems silly that we’ll work three times as hard as usual just to win a silly prize. Why we don’t work that hard or smart every day is beyond me.
The answer to that little question is that the sales contest has taken a ho-hum period of time and made it into a chance for you to show your mother-in-law that she was wrong. That you really aren’t a worthless, knobby headed failure. That you are Super Salesman !
Take the opportunity today to initiate a sales contest within your organization and watch the morale soar and take profits with it.
Sales Contest Suggestions
A sales contest has a bit of suspense, a bit of a change of scenery to it. It reeks of hope for those that normally don’t lead the pack within your organization. Hope springs eternal for those that occupy the lower rungs of the sales ladder.
At one of my former places of employment, we had an inventory ( bricks ) that was WAY TOO HIGH. The young Sales Manager had tried being a buddy, he had tried being an ass and had gotten tired of trying. I suggested that he partner up with one of the mortar companies that we dealt with and have a sales contest for colored ( pigmented ) mortar used with any brick that was already in stock. Grey mortar and brick that had to be brought in were not counted towards the final totals.
The prizes were higher commissions for the stock brick, versus any that had to be trucked in, and a cruise from the mortar company for everybody who met their goal.
The results were almost comical. All of us who had told the Sales Manager that we couldn’t sell any of the brick off the yard were fighting over those sad excuses for bricks. And all of us who had told him that we couldn’t sell colored mortar were selling it left and right and at a premium price.
Another promotion that I suggested was to put up a ” Brick of the Week “ for the inside sales and customer service reps. The first one to move that lot of bricks got a $50 gift card to a restaurant, where I had negotiated buying $1000 worth of gift cards for $800.
Sales contests that work are hard to devise, but their effects are almost always positive. If you need help coming up with a contest for your organization, I’ll be gald to help you, but my daily fee is $600, plus expenses and you don’t want to pay that.
I normally charge way more than you can afford per hour for phone consultations, and the free consultations are all gone
The two suggestions I mentioned above made well into six figures for the respective companies. I’m sure they’d pay my usual fee for another six figures.
Play Versus Work - Why You Need A Sales Contest
Last post we talked about sales contests and we brought up the fact that we, as humans, would rather play than work.
Need proof ?
See how quick you can find a reason why you can’t when your spouse asks you to run to the grocery on Saturday morning. I can come up with 12 excuses in less than 30 seconds to get out of that terrible chore.
You know…worked hard all week, need my rest, blah, blah, blah.
Now, let one of my friends call and ask if I can fill in his foursome at a nice golf course and you’ll see how good I feel and how quick I can get ready.
We all love to play and we all would rather get out of working.
Thinking of those who loved to play and hated to work, I quickly come up with the name of Tom Sawyer.
You can believe that Tom would have made a great sales manager. Remember the story of how he conned…er, I mean convinced his friends to whitewash the fence. Aunt Polly told Tom to get ‘er done and he did. Tom acted like he was an artist and all his friends wanted to take a turn at ‘painting’. He made ‘em think he was having fun and he soon had more help than he could handle. And to make it even better, they were paying him for the ‘honor’ of painting.
Nobody can explain all the quirks of humans and their peculiar nature. You can, however, make good use of all of these tendencies.
Put this tendency to good use by convincing your salesforce that it’s fun to work harder, while trying to win a prize.
