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Step 1. Determine what you want to get done that is not getting done. The more explicitly you define your objective, the more chance you have of achieving it.
Example:
you “want to increase sales.”
 Determine how big a sales increase you want. And in what period of time.
What
kind of sales you want to increase: Top of
the line? High profit products? New models?
New customers? And so on.
Imagine
for a moment a genie appeared and told you
he would grant you one wish to make your
company more successful. What would your
wish be? One wish!
The first
step: A focused objective.
Step 2.
Translate your objective into an attainable
goal for your contest participants.
Contest
participants: People in your corporate
family, or your extended corporate family,
i.e. your customers, needed to accomplish
the objective.
Attainable
goal: If the majority of your contest
participants feel they can attain the
objective you set for them, chances are good
you will attain the objective you set for
yourself. If on the other hand ...
When an
incentive contest flops, it flops for a
reason. Most often the reason was the goals
were near impossible to attain.
The
second step: Set a goal attainable by the
majority of your contest participants.
Step 3:
Understand the prime rule of Incentive
Travel.
An
incentive contest is a profit center.
Or its
parallel: “Any expenditure of money must
return more than its cost in additional
profit.” That is the foundation upon which a
budget is built.
Easy for
me to say, you say, “How can one prove the
profitability of an instance while it is
still a hypothesis?”
Now,
that’s an intelligent question. And an
intelligent question is the first step in
discovering anything. The justly celebrated
Socratic Dialogue according to Socrates
himself was merely, “The asking and
answering of intelligent questions.”
The third
step: Obey the prime rule of Incentive
Travel.
Step 4:
Arrive at
the goal. (Using the Socratic Dialogue.)
Example 1:
To
Sell
Top-of-the-Line
Product
Let’s say
you have top-of-the-line products that
aren’t selling. The products are worth the
extra money, you’ll swear to that, they
don’t sell because your people don’t even
try to sell them.
The
dialogue:
Question
1: What is the one objective I want to
achieve for next quarter?
Answer
1: $500,000 over forecast on sales of
top-of-the-line product.
Question
2: Who can get it done?
Answer 2:
Our sales force, of course.
Question
3: Why isn’t it being done?
Answer 3:
'cause my people sell what's easiest to
sell.
Question
4: Is that a considered answer, or a
marketing guy’s tired cliché?
Answer
4: Let’s put it this way; anytime I make a
call with one of our reps, Models 402 & 515
are just about always on the order I bring
back!
Question
5: Models 402 & 515, I take it, are two
top-of-the-line products?
Answer
5: 402 & 515 are the very top of the line,
and the most profitable. But it seems no one
but me sells them.
Question 6: Ok then. What would it be worth to you in dollars to increase top-of-the-line sales $500,000 incrementally next quarter?
Answer
6: My gross margin averages 35%. Top of
the line product grosses 46%. I'd happily
give up 15% of top-of-the-line sell price to
move a half million dollar more
top-of-the-line merchandise.
Question
7: How much extra top-of-the-line could a
salesperson sell in a month?
Answer
7: $10,000 per month minimum if they are
focused. Minimum, I say!
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Seven
intelligent questions, seven intelligent
answers and you have enough information to
create a goal and a budget that anyone’s CFO
will approve.
To uncover the goal gather this historical information:
1) Run the numbers to discover the total dollar sales of top-of-the-line product each salesperson sold last year same quarter.
2)
Set a personal goal for each sales person
for the coming quarter that is $25,000
higher than that sales rep’s last year’s
same quarter sales on top-of-the-line
product. The goal is for top-of-the-line
product only (sell price of top-of-the-line
goods is not reduced.) Regular goods are not
in the contest.
$25,000
goal for a quarter, less than $10,000 a
month increase, should be a very attainable
goal. Not easy. Attainable!
Step 4:
Uncover a goal using a Socratic Dialogue.
Step 5:
Set the budget
15% of
$25,000 is $3,750. For each salesperson who
makes quota you can award a prize worth
$3,750.
(May we suggest a travel prize for two? See Above & Beyond™. Winner selects from 24 sought-after vacation destinations, plus six RCCL or Carnival seven night cruises. As low as $3,200 for two people including air.)
Caveat: Please don’t fool with the number. You agreed you would give 15% of the top-of-the-line sell price for a $500,000 increase. You need only 20 winners from your entire sales force to make half a million incremental sales. The temptation to reduce the 15% to 10% will be strong, but if you yield to the temptation you have tarnished the process that brought you to the increase. The process can be used every time, over and over again, and will always be valid. If you found the goose that lays golden eggs, would you hurt or cripple her?
You have
created the perfect situation. If they do
not make quota they do not win. This is no
gamble. If they don’t sell enough
top-of-the-line, you don’t pay.
Let’s
check to see if we have obeyed the prime
rule of incentive travel: From each $25,000
top-of-the-line increase you receive 46% or
$11,500 increased gross margin. From the
$11,500 deduct the cost of the prize,
$3,750. Thus, your net receipt is $7,750.
Please remember that $7,750 is incremental
gross margin. Since so many of the costs of
handling the order; warehousing,
administration, selling costs, advertising,
et al, will not increase (because they were
paid in your original forecast), much - no
most, if not all, of the $7,750 will fall
straight to the bottom line.
Step 5:
Set the budget and vet it against the prime
rule of incentive travel.
Step 6:
Promote
the contest.
An
incentive travel contest cannot be
successful unless you have the attention of
your contestant universe. What does it
profit you to create a contest perfectly
attuned to the prime rule: An incentive
contest is a profit center, and not take the final step to remind them, then remind them again, then tell them about your reminder – that you are offering an extraordinary reward in exchange for their extraordinary effort?
The
average American is bombarded with 27,000
advertising messages a day. (We read that
some place, sounds about right.) With all
that clutter, do you honestly think they
will remember from the introduction of the
contest until the end of the contest that
they are in a contest?
Email
weekly standings reports, sales bulletins,
travel pieces. Promote your contest! You are
too busy to do it weekly. Twice a month
then. Twice a month at the least! You’re
competing for their attention, shouldn’t at
least one of the 378,000 advertising
messages they receive in the next two weeks
be from you? At least one?
You want them to do something for you they wouldn’t ordinarily do. If they do it you’re going to reward them with something they ordinarily would not have. Then it makes unqualified sense to tell them about it. And tell them again. And then once more, then remind them that you told them.
Step 6:
Promote the contest as hard as you can.
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