Sales Contest Punishes Loser?

Last week at the Engage summer party a client with a small 3 person sales team shared his latest sales contest with us.

“The team decided that we needed ipads so we made it into a contest”. At the end of July the rep with the lowest sales numbers had to buy the 3 ipads for everyone on the team.”

I thought this was an interesting twist on a typical sales contest. And a bit “Glengarry Glen Ross” in it’s style. Motivating with the stick rather than the carrot. The typical sales contest rewards the winner financially or with a prize. A trip, cash, a new car, socks. Don’t laugh! A cash strapped client of mine once successfully used tube socks as their weekly contest prize. These contests reward the winner but do not penalize. OK sure.  The loser is penalized with  being  the “loser” and  takes a blow to their ego but they do not suffer punitive financial damages.

I am a big fan of encouraging a competitive spirit in sales. I grew up in the insurance business in an office with a publicly displayed leader board, sales chart, and contests. These selling “aids” helped me succeed because I was always striving to be ahead of someone, or on top of the board.  Competitive spirits succeed in sales. For example new sales recruits who play competitive sports, run, play tennis, hockey etc almost always out perform those who do not. In our office for Lewis is a strong paintball contender and I enjoy the occasional 10k road race!

People always ask me about the value of a sales contest and my answer is “the best contest is that contest which motivates your team to sell more”  The goal is to push the team to perform a little better than they have previously and to prove to them that they can grow. As everyone is motivated differently you can’t create a contest in isolation. For example, a contest with a ski trip as its first prize would not motivate me but it would motivate my friend Derek who is an amazing and passionate skier!

I would love to have your opinions on sales contests and compensation. How are you pushing your sales teams in Q4? What does your 2011 compensation package look like? And, what do you think of the contest stated above? My bias is against punitive damages in a sales contest. Sure as the owner told me the “loser knew what he signed up for” but in the end I think you end up with more disgruntlement on the team than you do motivation. Just my initial thoughts of course…..I might be able to be convinced otherwise.

Dedicated to increasing your sales,





One response to “Sales Contest Punishes Loser?

  1. I am not a fan of publicly-displayed leaderboards, or punitive actions (unless actually warranted), for a couple reasons:

    1/ This does not encourage the rep. to win. It simply discourages them from losing.
    2/ The goal of a prize/carrot is not only the specific target reached, but rather continuing to imbue in the reps a drive to sell more. Humiliation does the complete opposite of this- it discourages the lower-performing rep, and will not help them sell more.

    As a sales rep, and then a manager, and then director of sales, I have found that incentives are far more effective than punitive measures. Reps want to know you support them, and while they need to be on top of their sales, if they feel the smallest hiccup will cause them team-wide humiliation, they are more apt to cheat to not be the low performer.

Comments are closed.