Archive for the 'sales incentive programs' Category
This is the kind of article that is written by those who think they understand incentive programs, but is what he says correct? Unfortunately much of it is correct all too often, but it is not the norm, nor is it what happens when the incentive program is designed and implemented by professionals in the industry. While the author offers a list of disadvantages of sales incentives, they are not disadvantages of using sales incentives them; they are disadvantages of how they are used. Let us review the points mentioned in the post and how they differ from ours.
Rewards for Top Performers
“Most sales incentives tend to reward only the top performers …some of these representatives may already be selling at a high level. They do just enough to collect their bonuses or trips”
Most top salespeople will be the top salespeople regardless and will always work to be the top. For them it is intrinsic. If historically only the top salespeople earn, the objectives and rules structures were not set properly to include 80% of the universe, not just the top 20%. A properly designed system will motivate the majority to better their own performance. In essence, they should compete with themselves.
Narrowly Focused
“Many sales incentives are also narrowly focused on just sales. This causes sales representatives to focus only on revenue-generating activities.”
Absolutely! That is as it should be. If you want them to focus on something else then incent that objective as well, but good salespeople are success driven. And that’s where you want them to be. The best programs will be those that are narrowly focused with qualifications to avoid other issues.
Costly
“Sales incentives also have high associated costs. Small companies which fail to tie incentives to the right performance variables may needlessly be paying tens of thousands of extra dollars per year for bonuses, trips and impromptu rewards.”
This should never really happen. Before you implement any sales program, enough time and due diligence should be spent so your measurements and objectives are tested against historical averages, taking all current marketing conditions into consideration. Any client who spent tens of thousands of dollars needlessly did a poor job of planning.
“The best sales incentives should be equally tied to increases in new business and sales of specific products and services. Some products or services may be ignored for higher-priced products or higher volume sales. “
Not necessarily. You can’t solve all problems with one program, but there are ways to tie them all together with one program using combinations of these other objectives as qualifiers or bonus earning opportunities when the main goal is achieved.
A professional incentive salesperson has the experience to turn these perceived disadvantages into advantages that will make your program the best it can be. One of the best incentive consultants in the business is Paul Hebert of I2I Incentive Intelligence. Drop him a line if you want that well developed and successful sales incentive program.
read comments (0)Let Them Have the Award They Want!
Author: Ley
Award giving can be a difficult business. Tastes change, trends fade and what someone may have wanted a couple of weeks ago isn’t what they want today. We all face the same situation when it comes to selecting awards for incentive programs, and for many of us the best conclusion in these fast moving times – let them get what they want!
The gift card has been a godsend for anyone who can’t pick out the perfect thing that someone wants. And they’ve grown in popularity faster than anything else in the retail world. In 2004 we spent $20 billion in gift cards. Last year we spent over 4 times that. Gift cards have gone from being considered impersonal gifts to being the most thoughtful gift of all. The gift card is a sign of the times – tastes change quickly, options should remain open, and you never know what you’ll spot something you just can’t live without!
Why the huge increase in demand for gift cards? Simple. Not only does it let someone buy what they really wanted (but were maybe too polite to say), it also lets them get it at the best price possible. They can wait until the sales, they can take advantage of special offers and maximize that gift. But there’s still a problem – what gift card to give?
You can try and pick the specific store they want to go to, but more often than not they might want to go somewhere else or they don’t get the chance to visit for some time. And those gift cards sit on dressers, or in the back of wallets until they’re forgotten. There is the universal Visa or American Express card, but with those you have hidden fees, fine print and expiration dates. Not the mention the many problems some purchasers have had with these types of cards.
That’s where we come in. The Award of Choice is the ultimate in flexibility when it comes to award programs. It can be redeemed when the time is right, for cards from hundreds of your favorite retailers, hotels, theatres and restaurants. And best of all the certificate will never, ever, expire, so they can take as long as they like to choose where to spend their gift. All this choice, and you can create it right from your computer, customized for your special someone.
We think this is the ultimate award, we know it’s something we’d like to get for every occasion and we hope you feel the same way.
I had a phone call the other day from a very pleasant woman who was selling business lists for email blasts or direct mail. While she knew we were in the “incentive business” (as our company name is Incentives, inc. it wasn’t too tough to figure out) it was clear to me that she didn’t have a good understanding of what this business really is. Actually she didn’t have a clue. She thought that if her lists worked for one “incentive” company it would for work all of them. What she didn’t know is that our industry is quite divergent and depending on what we are selling, to whom and to achieve what result, what we do and how we do it can be light years apart!
I’m sorry to say that many prospective client companies don’t really have a good understanding of our business either. They see us through the lens of their own needs. A meeting planner will see us as a travel company, for an HR specialist we will be a company that sells corporate recognition or years of service programs, for a sales executive we might be a merchandise or gift card company to provide the awards for a sales contest, for a marketing director a premium company for a consumer promotion. All too often, companies will see us through the persuasive selling ability of incentive suppliers calling on them. You can put some incentive companies in a neat and tidy little box; others may have to go into two or three boxes and still others put themselves into as many boxes as it takes to make a sale. Read the rest of this entry »
Top Ten Reasons Why Incentive Programs Fail
Author: Ley
Are all incentive programs successful? No! In fact there are some studies that show that as many as 66% don’t produce results or in fact have negative results. Why?
An incentive program is not a panacea for all employee performance issues. It is not a substitute for all the right things you know to change employee behavior. It is not a substitute for poor leadership or unfair compensation. But when used in the right context, it will definitely highlight all the other programs that you implement and can motivate your employees to improve performance.
Like the proverbial story of making the horse drink at the trough, you can avail your employees of all the programs necessary to make them successful, but with some of them you will not be able to make them “drink.”
An incentive program is nothing more than a tool to motivate your employees to want to take that first sip. Once they do, the vast majority will want to continue the experience for the simple reason that there is something in it for them.
Incentive program can fail for a variety of reasons. Following are some of the more typical things that will negatively affect them: Read the rest of this entry »
Today it seems that it’s almost de rigueur for us “experienced” incentive sales types to say to a client that we are completely “Award Neutral” when it comes to recommending the right award solution for their incentive program. But what does that really mean? And are we being totally honest with the client?
In the “old days”
Back in the early 1970’s I was pounding the pavement of the San Francisco bay area looking for unsuspecting prospects to listen to my well rehearsed presentation on the merits of sales incentives. When the motto of the company back then was “Motivating Men to Sell Your Product,” do you think it was a different time? How do you think that motto would fit into our world today??
At that early time in my career, I was taught never to approach a client initially about awards. It was drilled into me never to take our beautiful hard bound deluxe book of merchandise awards to the first meeting, and often not the second or even the third. My job was to learn as much about the client as I could. The theory was that if I learned about their company, organization, products, distribution, pricing etc. I would be in the best position to recommend a program that would produce results. And, my teachers were right. Approaching the business from this perspective allowed me to concentrate our resources on building the best solution for the client before we discussed what they should use to award the participants for results. We didn’t have to worry about being “award neutral” because in fact we were. Of course it helped that at that time all the industry had to sell were two rewards, merchandise, and group travel. Read the rest of this entry »