by George Kriza | July 24, 2017
Incentive programs are often launched with a very simple idea: "We need a sales contest to drive sales." A great deal of time is spent on promotion and enrollment, and rightly so. Much less time is spent on the strategy of how the incentive program will drive business results. That's particularly interesting because everybody wants to measure ROI. But the strategy was never set up to actually drive ROI. 

The Basic (Old) Approach 

What that generally means is that sales contests generally take one of two forms: "Sell and Get" or "Competition." In a sell-and-get-style contest, each SKU is assigned a point or dollar spiff value. The amount varies for any number of reasons, but the structure is essentially linear in the form of "Sell This, Get That." 

In a competition-style contest there are a limited number of winners. Prizes may be tiered, but there is often a steep drop-off in the caliber of prizes based on your performance level. For example, 10 top performers may win a trip to the Super Bowl, the next 20 after that get a weekend getaway in their region. Everyone else gets an ad specialty that essentially says, "Thanks for Playing." We should also note that for the most part, only one promotion is running at any given time. Both of these styles are useful, but there are a number of things that can be done to drive better business results. 

Salespeople Are Smarter Than You Think 

One of our postulates here is that motivated salespeople always figure out how to maximize their income. Simplicity must be balanced with structures that accomplish positive business results. Incentive promotions should not be structured like annuities. The salesperson should drive positive results for your business, or the rewards should be significantly diminished. 

Are Your Business Goals Clearly Enunciated? 

Here are some business goals that make obvious sense: 
1. Drive product knowledge and mind share in the channel 
2. Efficiently increase volume sales 
3. Increase add on sales, accessory sales, go together sales 
4. Stay within budget 
5. Create rich rewards for top producers only 

Match Your Strategy to Your Goals

Product Knowledge
If product knowledge drives sales, and we know that's true, then you would benefit by paying salespeople to acquire it. Run quizzes for spiffs regularly. Every time you introduce a new product line, run a quiz. If you introduce a new product, run a quiz. If you are closing out a product or product line, run a quiz. If products have been in market for a long while, run a quiz anyway, just to get people thinking about them again. When you pay people to successfully pass a quiz, you build mind share and resultant sales presentations, leading to more sales. 

Increase Volume Sales 
If you want to efficiently increase sales profitably, disabuse yourself of the thought that you have to reward all salespeople equally. Utilizing tiered promotions is a great way to do this, because it clearly incents the salesperson to drive more volume for YOUR brand. Keep in mind that channel salespeople are carrying many brands on their shelf, and their motivation to always pick yours may be a little sketchy. If your competitors have incentives running as well, then they may be more likely to pick and choose when to sell yours. Give them a strong reason to build volume. 

You can even apply tiers to same customer sales. The same underlying principle is in play, but in this case you cause the salesperson to take a good look at their existing client base and figure out how they can add to the installed base of products, freshen up that client's inventory with newer generation products, etc. You have to run your own math. But economies of scale both in manufacturing, and even in your channel engagement, reward driving costs down and key reseller engagement up. 

Creating an Elite Group can be a way of richly rewarding top performers. It is possible to set performance thresholds for higher reward levels and automatically deploy them. How would that look? We call it prequalification. Until you hit the prequalification levels, you don't even get to play in the promotion. But if you do, you earn handsome additional rewards. One last thing, consider making people qualify to be in your elite group every month. Remember, entitlement is not your friend.

Increase Add-On Sales
If you aren't thinking about add-on sales, you should be. Customers need accessories. They need ancillary products. They probably need them at the time they purchase the original product. Give salespeople a strong reason to build the retail ticket with add on sales. A tiered approach can be applied both to the volume sold and THEN the volume of accessories sold. Your average margin will improve. The average margin for the reseller will improve. The salesperson will make more money, and take the time to present the full sales opportunity. Everybody wins. Even the consumer wins, because they will benefit from a more complete solution to meet their needs. 

Staying Within Budget
Do you want to control costs and increase ROI while still driving results? Consider implementing a finite budget on your promotion and have incentive software turn it off the moment the budget is hit. At first blush you might think this would retard support for your promotion, but actually it may do the opposite. A cap adds a sense of urgency to your promotion and encourages salespeople to get the sale in NOW, because the spiff may not be there if they wait. 

Multiple Concurrent Promotions 
There is actually a way of accomplishing all of your goals at once -- seamlessly and easily. It benefits everyone involved to run more than one promotion at a time and take advantage of several of these structures, (or competitions) at the same time. Running concurrent promotions increase overall sales, add on sales, create elite groups, and motivate salespeople. 

However, old models and methods don't allow you to effectively manage concurrent programs, therefore limiting your opportunities to achieve your goals. What major resellers, distributors and manufacturers are realizing are the benefits of an advanced incentive software engine that is capable of managing their complex promotions cleanly. 

With innovative sales incentive software solutions, sales organizations are able to easily customize, execute and manage multiple, complex programs at the speed of their business -- resulting in better outcomes and new levels of success. Plus, designed for today's modern workforce, incentive software makes user-experience a priority… leveraging the latest advances in responsive design, automation and gamification to bring sales incentive programs to the next level.

For sales management, automated solutions inject superior visibility and transparency into every aspect of a sales incentive program life cycle to provide actionable insights and greater business intelligence.

In summary, incentive strategies are often underserved, but when strategy is combined with automated incentive software, the benefits and opportunities abound: 
1. Increase ROI at the same time as tightly controlling your budget 
2. Drive product knowledge in the market 
3. Productively alter selling behavior to reinforce positive habits that benefit everyone. 

Devote adequate time to your strategy. Everyone wins.

George Kriza is founder and CEO of MTC Performance, a leading innovator of sales incentive management solutions for top Fortune 500 and growing middle market companies to more efficiently deliver exciting, effective programs that inspire success and reward results. He has over 30 years' experience in the personal computer and consumer electronics industries. Since founding MTC Performance, he has focused on web-based technologies designed to break new ground in facilitating the success of incentive programs.