This blog is about employee incentives programs
Auto dealers, clothiers and jewelers use sales contests to improve the performance level of sales staff. These contests play off the high level of competition and drive among professional sales representatives, increasing the stakes with each unit sold. As the economy continues to struggle, a greater number of businesses should think about sales contests to turn sales prospects into happy customers. Whether the selling is done in a car showroom or a phone conversation, sales contests can generate excitement and encourage better techniques from customer service representatives.
Most companies break down sales contests by the products included as part of the internal promotion. A car dealer that is trying to get last year's models off the lot may pay higher commissions to sales people on these specific vehicles. Clothing shops, electronics stores and big-box retailers break down sales contests by department to start every employee on a level playing field. In small store selling one type of item, a sales contest may include every item in stock to encourage upselling accessories and seasonal products.
Features
Every sales contest requires an effective reporting method and a worthwhile incentive to motivate sales people. Most stores use employee IDs on receipts and computer records to track sales throughout the contest. For stores that do not use computerized checkouts and accounting, the floor managers have to stay on top of applicable sales to make contests fair. The primary feature of a successful sales contest is a reward like a bonus check, free products and vacation time that are sufficient offsets for greater effort.
Objectives
The three objectives of a sales contest are moving inventory, creating competition among sales people and highlighting new products. Car dealerships and electronics stores that receive high-priced inventory based on available display space use sales contests to clear out old models. In sales contests where a single reward is provided, inexperienced sales people can stay competitive with their experienced colleagues by getting a few big sales. This competition can be healthy for retailers where new sales people are introduced on a regular basis. Book and music stores that receive new products each week initiate sales contests to keep display shelves free for next week's products.
Time Frame
The length of a sales contest is in direct proportion to the value of the products being sold. High-priced products like cars, refrigerators and jewelry often require multiple visits by buyers who are interested in comparison shopping. If a sales contest lasts a week rather than a month for these products, sales people will get dispirited and try to press buyers into purchasing products without feeling comfortable with their decisions. The immediacy of buying a CD, DVD or a pair of pants means that sales contests can last a few days and still have an impact.
Considerations
Managers and owners interested in running sales contests should think about sales poaching as well as potential rewards early in the planning process. In highly competitive environments, sales people may try to check out customers who were serviced by their colleagues. The store manager should identify experienced sales people to act as monitors during sales contests, eliminating sales poaching as a concern. The best way to reward participants in sales contests is providing incentives to at least the top two sales people. A winner-take-all sales contest will frustrate almost everyone on the sales team and create diminishing returns in subsequent contests.
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