The Truth About Sales Contests

BLArtCompanies and sales managers are constantly looking for ways to motivate salespeople and increase sales. One of the most traditional approaches is to create a sales contest. After all, who wouldn’t be motivated by a few extra dollars in his or her pocket? It turns out the surprising answer to that question is, “most salespeople.”

One of the problems with sales contests is how demotivating these contests can be. Because of the competitive environment that the company typically creates, and the fact that most people who gravitate towards sales are competitive by nature, not everyone plays nicely. Add that to the typical team of salespeople who may already be struggling to get along, and you may find yourself throwing oil on a dysfunctional team’s fire.

An even larger issue is how often a sales contest can create ethics conflicts. It’s not unusual for a sales contest to blur the ethics line: There are tactics that are designed to assist clients to move past his or her fear of change, and then there are tactics that begin to unethically manipulate people to create sales opportunities that only benefit the salesperson.

Don’t believe me? When I was 22 years old, I was in a contest called “Steak and Beans.” I was told that I would be competing with 23 other sales people in our office, and the rules were simple: After one month, the top twelve sales reps and their significant others would be eating steak at the manager’s house, and the bottom twelve and their significant others would serve the steak to them, and eat beans while standing around in the kitchen. Sound like fun?

Like every other member of that team, I was bound and determined not to humiliate my girlfriend by having her watch me serve steak to others while standing around in a kitchen eating beans. The contest had its desired effect for the company: We sold more product that month.

Unfortunately, there were some unspoken side effects too. The contest demoralized not just those who lost, but most of the team that won. It turns out that it’s not much fun to watch a fellow team member feel angry and embarrassed while serving you steak.

There was another side effect that was far more sinister. I found that there was a cost in my effort to stay out of that kitchen and be able to sit beside my girlfriend while we ate steak. To achieve the numbers I needed to achieve, I found that I no longer cared whether a product was right or wrong for my client. All I cared about was selling the product, and being on the correct side of those contest results. My attention to ethics was temporarily eclipsed by my desire to win. I didn’t just harm a few clients that month; I harmed an industry that I care deeply about.

The reality of the sales contest is that it’s not the sales force that typically embraces sales contests; it’s the management. In that a sales contest is supposedly designed to inspire and give incentive to the sales force, it is strangely ironic that it often ends up doing quite the opposite! Is there a solution? You bet there is!

  1. First, compensate salespeople fairly. That means we need to create a pay structure comprised of a draw, and a reasonable, commission, that pays individuals what they are worth. Good, hardworking sales people are worth a lot!
  2. Don’t use sales contests to motivate. Take a deep breath if you’re a sales manager. I didn’t say that you shouldn’t try to motivate; I said; “don’t use sales contests to motivate.” Here’s a shocker: Most salespeople I work with tell me that they aren’t looking for more money to motivate them. What truly motives salespeople, and what they are looking for, is to be acknowledged, respected, and appreciated.

It’s not a bad thing to try and inspire an individual to do great things. That’s not the argument here. It’s how we inspire a person to do great things that requires more attention. In the world of selling, we need to put more thought into how we motivate those who sell. By figuring out the right way to inspire, we can improve not only individual performance but also improve the perception of salespeople. If we do that, we all win!

Comments

  1. Well said my friend!

    Steak and beans? O M G ! Thank you for sharing your stories with us.

    Rob, enjoy the weekend!

    Neil

  2. Thanks Rob for a great lesson.
    I could not agree more!
    Have a good weekend
    Patrick

    • I was a little tentative about posting this one because I didn’t want people to misunderstand my intentions. Motivating sales people is fantastic – lets just do it the right way. Thanks for posting Patrick.

  3. Donna Tongue says:

    Beautiful article, Rob. Your comments on how to motivate well – that is, for GOOD to occur – applies to every interaction in life. Thanks for sharing!

  4. Dittos re Patrick’s thoughts. I saw Glen Garry, Glen Ross on B’way, complete with 500 recitations of the “F” word; a veritable Lion’s Cage. Why I watched the movie I don’t know; Jack Lemmon, I guess.

    • Well… I’m actually a fan of Glen Garry, but don’t hold that against me. I think it’s an accurate portrayal of the darker side of selling. But doesn’t that provide great lessons as well? TNT runs it every now and then with every curse word cleaned up. There’s a lot of the word, “frickin.” Some say it was Jack Lemmon’s greatest work. Thanks for posting Jerry.

  5. I was involved in one of these once. We were all assigned goals. Mine was an extra $15k for $4MM of yearly gross sales. I made $3,960,000. They still gave me an extra, unasked for $10K. I was happy.

    But that contest never swayed me during the whole year and at the end I never did anything underhanded to try to book that last $40k.

    Some guys would though.

  6. Great article Rob-
    The boss that did the steak & beans should get some of his own beans in the kitchen!
    What a terrible way to think you are motivating people!
    Always take away something valuable from your words!

    • That was one, very tough boss, but I saw him again 30 years later. He was grappling with some of the decisions he had made. Although I never mentioned that particular contest, I’d like to think this was one decision he would like to have had back. Thanks so much for the kind words, and posting Elyse.

  7. Gary Linowes says:

    So did you eat the steak or the beans?

  8. Nick Schacht says:

    Excellent, excellent BLArticle this week, Rob! You’ve said what really needs to be said and heard. I’ve seen more examples than I care to think of that illustrate your point. I wonder if this could be turned into a comedy sketch, and filmed?

  9. Jeffrey Allen says:

    The Wells Fargo sales team comes to mind. Weren’t they pressured by quotas to open all those accounts? How do quotas compare to contests?

    • Definitely in the neighborhood. One of my biggest frustrations when consulting is hearing about crazy quotas. Sadly, as successful salesperson’s reward is often a shaved territory, and higher quota. That’s why we often lose great salespeople. Thanks for posting Jeff.

  10. “My attention to ethics was temporarily eclipsed by my desire to win. I didn’t just harm a few clients that month; I harmed an industry that I care deeply about.” Forget sales – please teach this to our elected officials – they need a good ol’ Rob Jolles beat down to come to their senses.

    • Hmmm. A good explanation for why the Federal Reserve just removed four board members from Wells Fargo. Now the whole firm is having a season of eating beans. As a Wells customer (who was stung by the unnecessary accounts scandal), I wish them a steaky future once they’ve cleaned out the pantry.

    • I’d like to go “half-full” on this one. When something like this occurs, it makes both company and client more aware of these types of abuses. Sorry you got stung… but glad you posted Nancy!

    • Brad, that comment made me smile. I don’t care if you’re blue or red on this issue; a desire to win can be a wonderful, and dangerous companion. Thanks for posting!

  11. Chris Perreca says:

    You articulate value lessons learned – writing > “My attention to ethics was temporarily eclipsed by my desire to win. I didn’t just harm a few clients that month; I harmed an industry that I care deeply about.”

    I have witnessed the same while at First Union National Bank. Disappointing.

    You are on target writing > “What truly motives salespeople, and what they are looking for, is to be acknowledged, respected, and appreciated.” Great example many can benefit. Thank you.

    • Until you’ve had this kind of pressure, and I’m not talking about steak and beans, I’m talking about putting food on the table for you or your loved ones, it’s hard to understand how the lines of ethics can be blurred. I sure hope managers are listening. Thanks for posting Chris!

  12. Ray Rollins says:

    Outstanding commentary. Although I worked in an industry that did not sell “products”, incentives to win contracts or new business were similarly used. Often they caused resentment between members or the sales development to result in lack of cooperation or missed opportunities for collaboration and synergy.

  13. By Anthony Iannarino The modern salesperson is not what you have been told. The modern salesperson isn’t digital. The modern salesperson isn’t a “social seller” either. Digital is a tool kit, and, that being true, it is no indication of what makes one a modern salesperson. The modern salesperson is something much more than someone who knows how to use a set of tools – even the tools that are necessary to the trade. The mistake here is believing that the tools are what make the salesperson modern.

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