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Think You Know How to Run a Local Incentive? Think Again

Written by: Tim Houlihan & Chris Dolan
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Five best practices for running incentives at the local level. 

Overview

At BI WORLDWIDE Canada, we use the principles of behavioural economics to create the best engagement strategies on the planet. We work with expert academics who advise us on the latest research on human behaviour, engagement and decision-making. We use non-cash rewards and recognition to engage and motivate employees and sales teams.

Designing an incentive contest can be easy – almost anyone can do it. Set some goals, offer some awards, then sit back and watch everyone work like crazy to achieve their objectives. Right?

This type of thinking brings to mind a common “I’m an incentives expert” story: A talented and energetic sales manager thought he had put together the perfect contest – the top quarterly sales person earns a one week trip to Paris. Awesome, right? Halfway through the contest, he noticed overall results were well below expectations so he reached out to his top sales rep (who was also behind previous sales benchmarks) and heard, “I have three kids. I can’t take a week-long trip to Europe during the school year – not interested.” Other high-performing reps were also disengaged due to unrealistic goals, lack of understanding their progress compared to others and a general sense of apathy. They all assumed the top rep would be winning the trip so didn’t think it was worth bothering. At the conclusion of his failed contest, he ended up rewarding a below-average performer with an incredible trip to France. Meanwhile, quarterly sales were in the tank and the majority of his salesforce was disengaged.

This waste of time, money and resources could have been prevented if the sales manager had used five best practices for running incentives at the local level.

1. Consistency
Establishing replicable methods and preferred rule guidelines for contest design is the key to ensuring a successful outcome. That doesn’t mean every contest design should be exactly the same – quite the opposite. It provides autonomy at the local level for contest managers to be creative, flexible and empowered to maximize engagement and sales results.

How do you accomplish consistency? Stick with tried and true rule structures with various options to personalize each contest. Each location can customize sales objectives, contest goals, award payouts and tracking methods as long as the rule structures remain the same. Offering templates for communications and reporting will also ensure cohesion among all of your local contests.

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2. Governance

“Begging for forgiveness instead of asking for permission” is not a sound contest implementation strategy. There are normally two outcomes for this type of approach. One: the contest was a flop and “I am sorry I forgot to run it by you.” Or two: the contest went way over budget and “the good news is that sales are up; the bad news is that I need a lot more money to pay out.”

Contest origination at the local level should always include a review/approval step in the process. Contest designs overflow with good intentions but without a consistent means of checks and balances, a manager could establish unrealistic goals or design a contest that is not in alignment with the expectations of business leaders.

Reps who set their own goals always perform higher than those who don’t.  Download Now

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