Short answer: sometimes. Below are best practices for using sales contests and spiffs in an effective way.
- Keep it simple. If a salesperson can’t calculate the reward in their head, it won’t work.
- Make sure the winner gets a big prize and other strong performers win something. For example, the person who sells the most newly released widgets this month, above 10, wins a first-class trip for two to Italy. All those that sell 10 widgets win a $200 gift card to Del Frisco’s. Many times one person busts out of the gate and has won before the contest is half over. Unless you reward strong performances in addition to the winner, then no one is incentivized.
- Announce the contest or spiff the same day it starts. Don’t announce a contest to start in two weeks or you’ll have a team of sandbaggers.
- Keep the timing of them unpredictable and infrequent. I once had a fellow salesperson tell me that he was holding onto a large order until the next spiff because our company announced on toward the last two weeks of every quarter.
In short, they can be very effective … sometimes.
