"But my people love that trip!" I've heard that phrase dozens of times. And, before anyone runs off in the wrong direction on this subject, I'm sure there are hundreds of sales incentive programs out there that feature truly fantastic travel events or other rewards for top performers. For those who earn the trip, you've given them a memory that will last a lifetime and will help them to continue to be highly motivated to earn the trip again next year. This very elite slice of the team consists of your very best performers, all of whom make a huge contribution. There is no denying these facts.
That top performer trip is certainly solidifying relationships and making those top people know that they are appreciated. It is also very likely a great motivator for those people to stay on your team and work towards earning next year's reward trip.
What is the primary purpose of your employee incentive program?
However, as exciting as the incentive trip can be for you and your team, the real question is "what is the primary purpose of your sales incentive program?" If you want to reward the top 5% or so of your team with a trip of a lifetime to say "thank you" for their contribution to your business, then a sales incentive trip is a great idea. However, if you are trying to engage the maximum number of people on your sales team and encourage them to push a little harder in the coming year, quarter or even week, if you want every oar in the water, you can be sure that the "top performer" format is definitely not doing anything close to that. Too many of your sales team are going to feel (justifiably) that they have no chance of achieving the trip goal and, therefore, won't even try. Worse yet, they may feel that their (less than superstar, but still solid) contribution is not valued by the company and become discouraged.
Think about it from the standpoint of that large center strata on your scale from low to high performers. As soon as you announce the criteria for next year's top performer trip, how many of your people are going to feel that they have any real chance of winning? You already know the majority who will make the cut (because they always do), so the only people truly motivated are at the fringes of the top 5% to 7% of your team. The rest know they have little or no chance or earning the employee reward trip, so they will just go on with their routines and completely ignore the incentive program.
Getting more of the team engaged
There are numerous studies as well as basic math that confirm getting the middle 60% of your team to move the needle just a few points pays HUGE dividends in your sales numbers and your bottom line. Any sales manager would like to be confident that his or her whole team is pushing to grow, to succeed and to sell more than the previous year. Thankfully, there are a few ways to get more of your team engaged without breaking the bank and without discouraging that top echelon who had been looking forward to that annual trip.
It's also important to know what motivates your employees. You may think that a trip is a good idea for a reward, since you and your spouse enjoy going with the winners each year. However, maybe your sales team is made up of a large number of single parents who have trouble finding child care for the time their are going to be away on the trip. This may cause more stress than excitement. It could be that these people (perhaps a majority of your sales team) would rather get something like a new television set or a cash incentive than an ethereal vacation.
In all employee reward plans, it's vital to make sure that the sales goals are attainable. What seemed like a good stretch on paper may not be possible in the real world, with its distractions, prospects that string sales people along and people that cancel or no show for their sales call appointments. Conversely, you want to be careful not to make your goals too easy to hit. Last year's stretch goal might become next year's slam dunk if your business is experiencing rapid growth.
The Good Plan
If the yearly trip has become an institution at this point and there really isn't any way to change that around, at least in the short run, then consider adding a point program layer that includes 15% to 20% of the team who are just below the trip cutoff goal and extend the motivational impact to your team. With just this one step, you've got motivation that mirrors "shoot for the stars, and even if you miss you'll get the moon!" Nothing is more frustrating than coming close to the big trip and getting nothing.
The Better Plan
An even better plan involves creating appropriate brackets within your sales team that put people of similar sales, similar territories and similar quotas together, competing against one another. Let's say you end up with four brackets, such as brand-new associates at the bottom, your well-established stars at the top bracket and the middle two brackets making up the rest. With this setup, each group competes against their peers, and within each group there is a much more realistic chance for a high number of sales team members to achieve the goal. There are a number of ways to create winning categories in each bracket. For example, the top X% within each bracket may earn the trip, while two or three additional levels earn rewards of varying degrees within the bracket. For example, if the top tier trip is a seven night Caribbean cruise, the second tier reward might be a three or four-night cruise, and the third tier trip might be a weekend getaway at a resort near your city. Although the rewards aren't equal, you have a greater number of employees earning some type of reward.
The Best Plan
For an even better plan yet, consider having your sales team compete against themselves, selling against their own previous year's number within the same time period. This provides the broadest competitive impact. There are various ways to accommodate top performers who are already just about maxed out for various reasons, but the key is that no one can get in the way of a salesperson improving from last year. Virtually all salespeople know what they did this year and know what they need to do to grow their numbers for the coming year. This gets every oar in the water! (If they don't know these numbers and what needs to be done to improve, that's your fault, and you need to up your game as sales manager.) This "best plan" format will result in a broad mix of earning abilities being able to compete. A points structure is the perfect solution for letting each participant shoot for their own growth goal. An additional benefit of this plan is that focusing on rewarding growth funds itself! (No one wins if they don't increase their contribution to the bottom line.)
One caveat to this plan: If you have one time events that affect sales, such as the Super Bowl or Olympics being in your town or a huge product launch that isn't likely to be repeated, you'll want to subtract sales related to that event from your number to beat for the next period. Otherwise, you'll have created a goal that is impossible to replicate, let alone beat.
The Bottom Line
There are many other formats that accommodate unique business structures, your available budget and other factors while still accomplishing your main goal of motivating a majority of the sales team. The main point is this: Don't judge a sales incentive program by the people inside enjoying the party (or the trip). You have to judge it from the viewpoint of the people outside who didn't get in and the impact on their desire to perform at their highest level for the organization. If most of your sales team don't think the party will ever be for them, then you're incentive is really more of a disincentive.
So, is your program rewarding a few superachievers, while leaving too many of your people out in the cold? If so, now is the time to sit down and think about what are you going to do to get more of your team in the game.