Do We Need Sales Contests?
Do we need sales contests?
A simple, fair comp structure is really the best way to go, but c’mon, let’s face it…salespeople love any reason to work just a little bit harder for larger returns.
Still a minority, but I’m finding that some sales leaders are now against the idea of most sales contests, president’s clubs, etc. They seem to think they do more harm than good to a sales org. My hunch here is that some folks have either:
- Put together poorly run contests, or
- Been a part of poorly run contests before, and therefore…
Have a negative viewpoint of them. A poorly run contest can leave managers or future managers thinking contests as a whole do not work.
I personally think the answer is they’re not “needed,” but they are valuable and fun for the teams. I also feel like mixing up contests is the best way to go. Never let them become stale. Rotate between results, metrics, whole team and individual goals, big prizes or trips, and small but meaningful incentives.
Assuming you already have that fair comp structure in place, contests around creativity like “best new email template,” “best new collateral,” and “best above and beyond story,” might be the best bang for your contest bucks.
Effective Contest Structure
In my experience, the best way to run a contest is to create one that everybody believes they can win. You must set a bar that everyone feels that they can attain even if it’s a stretch goal. The team is then more supportive of each other and the contest as a whole achieves far more revenue/results. This is an important consideration, because if it seems that only the top seller can win, the team may not be as motivated. The floor can take on a negative mentality such as “Well, so-and-so always wins, so why bother trying?” Again, this is where managers and sales leaders become tainted by contests. It’s not contests themselves that fail it’s poorly executed contests.
I always try to base contests around sales activity AND revenue. Shorter contests work better because many salespeople have the attention span of a squirrel, and want immediate results. It’s much harder to sustain momentum for a month, or quarter long contest; than a contest running a few days or a week.
I would advise against making contest decisions in a vacuum without team participation. I love hearing ideas of contest structure and rewards from frontline manager and sales reps. Why? Because obviously their buy-in will be that much stronger if they participate in the creation of the contest.
Measuring Contest Effectiveness
Data. Data. Data. Of course the data should yield improvement in KPI’s, pipeline generated, and revenue sold. But what about soft, or less measurable results, like improved morale, increased communication, and strengthening of internal relationships? Harder to quantify results such as these can result in both short and long term gains. How do you quantify morale? Perhaps it’s increased tenure. In other cases it could be increased teamwork and camaraderie. These “less measurable” results should not be ignored, and can be quite powerful.
I spoke with a sales leader who once ran a contest that every time an SDR got a set, they got a high five and a personal compliment. I’m sure that makes the team feel good at scale. Money doesn’t always talk. On that same train of thought, I notoriously ran contests where I had to serve coffee, water, food to team members who “won” a contest. Nothing like having your reps boss you around to motivate them!
By increasing effort metrics, ie “hustle,” it will improve the buzz and energy on the sales floor. I never met a salesperson who didn’t feed off the energy of others. If there are SDR’s saying “OH CRAP HE GOT ANOTHER SET – I GOTTA GET ONE TO STAY AHEAD”- you know they are incentivized and the floor is rocking.
The result? Shorter sales cycles, increased revenue and pipeline generation, greater talk times, and more meetings booked.
Build a Contest from Scratch
I’ve built or helped build sales contests and competitions for the orgs I’ve led many times, and in many different formats, but there is one place it always begins.
The budget for the contest is the starting point.
And that budget begins with a sale. The sales leader selling the contest up the food chain to the CFO/CEO.
So what are some of the steps you should take?
- Get the budget.
- Have a theme – a structure or activity, based around that theme, and a fun reward.
- Figure out the metric that you are trying to improve upon (ex. number of demos held) and apply this metric to the theme.
- Use a tool (like Hoopla) to track it.
- Give the reps easy wins throughout the process (ex. top rep gets a gift card every day).
- Build up to a grand prize that is something every rep would want. Make sure that it is large enough to entice them to keep going.
- I have sent reps to Mexico, Costa Rica, Spain, France, Hawaii, Las Vegas, New York City and more.
- People love experiences often more than cash.
- Stay in the budget. I repeat…stay in the budget.
- Blowing the budget out will jeopardize your ability to run another contest.
- But if you blow the numbers away while staying in budget, you might find yourself able to do it again with a BIGGER budget next time.
As I said earlier, you don’t have to hold sales contests, but they do have value when done right. You know you are doing it correctly when you:
- Involve everyone.
- Communicate well.
- Vary the format and rewards.
- Measure with hard metrics and soft results.
- Set and stay within budget.
Salespeople love rewards and competing. Give the people what they want, but do it right.
Scott Leese has spent his entire career building and scaling sales orgs at SaaS companies, wrote a bestselling book “Addicted to the Process”, is currently the CEO/Founder of Scott Leese consulting and the Founder of the Surf and Sales Summit. You can find out more over on LinkedIn.