Nearly every small business hits a sales slump at some point, resulting in a plateau for profits. Although this may be normal, the bills still need to be paid so ignoring the issue is out of the question. One of the most tried-and-true ways to pull your company out of quicksand is by rallying the troops with a sales contest. Tempting your salespeople to get moving by waving around prizes and cash to the highest earners can be quite effective, but only if you do it right. Consider some tips on keeping your sales contest fair, fun, and successful.
1. Use contests sparingly. Although you could always use more revenue, save the contests for the times you really need to increase your sales. Otherwise, the contests may become ineffective and ignored by your employees. Sales performance professional Alan Rigg wrote the article, “Do Sales Incentives Really Motivate Sales Professionals?”¹ In it, he warned, “Rather than constantly running new sales incentives and contests, save them for special situations such as jump-starting sales of new products or services or reinforcing desired changes in how your salespeople sell.”
2. Think about your objective for the sales contest. Make it specific so your employees know what they are aiming for. Whatever your company is struggling with most at the moment should be the focus of the competition.
Also, make it a challenge. An article on Inc.com titled “Letting Employees Battle It Out”² highlighted the perks of encouraging a little competition in the workplace, regardless of the contest’s objectives. Nick Friedman, president of Florida-based College Hunks Hauling Junk, told Inc.com about the contests he holds to encourage employees to compete with each other to get the best profits, average job size, or loyalty from customers, to name a few ideas.
3. Break the contest into increments. The main point may be to increase revenue in the long run, but employees will be more motivated if they are frequently updated with their performance in the contest. You may be able to keep it running for several months, but don’t wait until then to hand out prizes if you want to keep up the spirits of the participants. Consider offering a smaller prize to the person who makes the most sales each week. Then, add each week’s results so you can hand out the big prize at the end of the contest. This way, it’s likely that more than one employee will win a prize.
4. Offer appealing prizes. Cash is always appreciated, but it’s not the only prize available, especially when it comes to the smaller sales rewards. Rather than handing out a $20 bill to the employee who wins the weekly contest, for example, consider giving out movie tickets or happy hour on you. A larger prize might be an all-expenses-paid trip. Gift cards are often gladly accepted, but keep in mind that they have to be declared to the government by employees because they count as taxable income, according to Entrepreneur.com. The article “Don’t Be a Scrooge by Giving a Gift Card”³ states that while gift cards of any amount are taxable, tickets to events or movies are not.
5. Make sure the contest benefits you. A contest is useless for your financial bottom line if you don’t make any money from it, whether immediately or eventually. You need to do more than just break even on your prize budget. Measure the results weekly or in other time increments to make sure that sales, customers, and overall profits really are increasing as a result of your employees’ recent efforts.