Almost every experienced leader realizes the value of their top employees. Furthermore, those leaders' number-one regret is almost always not moving fast enough on poor performers. Part of this is because the number-one thing top performers want is for someone to get the poor performers out of the way. So feed the top. Cut off the bottom. But what about the middle 80 percent? Turns out the answer there is to motivate them by keeping score together in short bursts: contests.
I debated this with FantasySalesTeam's founder, Adam Hollander. The generally accepted path to success is to invest in top performers and not worry about the rest. Hollander said the most impactful sales contests motivate the middle performers. It made no sense -- until he persuaded me that he was right.
As a sales manager, Hollander ran multiple contests -- until someone demonstrated that his contests were not growing sales. There were two reasons for this:
- The top performers always won. But earning the biggest commissions and bonuses already motivated them. Winning contests made very little difference to their motivation. They won, but they didn't do any better than they would have without the contest.
- The middle performers rarely thought they had a chance to win. Even if they were motivated for a while, they didn't stay motivated. As soon as they were out of contention, they stopped paying attention.
Hollander designed a series of contests modeled after fantasy football and leveraging the new sales activity tracking capabilities of programs like Salesforce.com. The core of these contests was a series of rewards for achieving different levels either individually or as a team: most prospecting calls, highest conversion ratios, most sales visits, fastest follow-up, highest number of sales during any given period, highest sales volume, most profits, etc. And the team could be your own team or your "fantasy" team of selected colleagues. This gave people incentives to help each other be successful.
In one contest that Hollander designed for Verizon dealer "Wireless Zone," the organization's worst-performing sales rep had the fantasy team that won the overall prize.
"Aha!" said the debater in me. "The system is flawed. You've motivated a spectator."
Hollander replied, "That individual was performing at 150 percent of what he had done in prior months. He was invested in success."
That was when I realized Hollander was onto something.
He shared his 10 tips to improve sales contests. They group into three main ideas:
Keep score: People like to win, know what they have to do to win and how they are doing.
- Create multiple ways to win
- Incorporate activity metrics as well as results
- You don't have to break the bank with prizes
- Make results highly visible
- Measure measure measure
Together: Teams beat individuals every time.
- Leverage team competition
- Hold a proper kick-off
- Get managers engaged
In short bursts: People have the attention span of... people
- Hit the reset every 30 to 60 days
- Update results frequently
Compensation is either base, bonus or long-term. The rule of thumb is to compensate people for what you want them to do. ("Show me how they are paid and I'll tell you what they really do.") In general:
- Structure base compensation so people don't have to worry about basics like food, clothing and shelter. Base compensation gets people to show up and comply. (See three levels of engagement.)
- Structure bonuses to incentivize people to achieve short-term goals.
- Structure long-term incentives to achieve long-term goals.
Contests fall into none of these buckets. As we've seen, you can't use them to get top performers to put more attention against short-term goals. They're already doing that and getting compensated for doing so. But you can use contests to motivate the main body of employees to increase their attention against discrete activities or goals in short bursts.