New York, NY. January 17, 2011 — Do sales contests, incentives, and other reward activities do more harm than good to a company’s sales efforts? That depends greatly on their design and management, as well as how they align with the firm’s growth plan, according to a new Performance Perspectives executive briefing, “Sales Operations: The Quest for Efficiency Continues,” published today by Madison Performance Group.
“With sales force effectiveness hovering around the 15 percent mark, The CEO wants the sales force operating with unmistaken clarity,” says Mike Ryan, senior vice president of Madison Performance Group, a premier global reward and recognition design and consulting firm. ”In response, smart sales operations executives are examining any expense, activity, or intervention that can either derail or recalibrate their sales teams. Included on their list is the manner that sales contests and spiffs are created, delivered and managed.”
Ryan says that although spiffs and sales contests represent only about 10 percent of a company’s variable pay mix, “Left unchecked they can do disproportionate harm to the firm’s broader business strategy.” Some of the potential pitfalls identified by Ryan include “encouraging behaviors and outcomes from sales representatives that may be contrary to the organization’s corporate forecast, and shifting revenue focus away from product lines or customer clusters that are essential to the growth plan.”
Because information about a company’s sales plan and related activities are scattered within the sales organization, Ryan suggests that creation of online sales portals that house all sales spiffs, contests, and other information as “the sales organization’s ‘go-to’ place for program presentation, communications and updates.” The new version of Performance Perspectives offers useful information about the various advantages a sales portal can offer.
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As a global leader in Social Recognition, Madison provides enterprise-class organizations with employee recognition, incentives and service anniversary programs designed for the needs of today’s ever-changing workforce. Madison’s recognition strategy focuses on making managers mentors, reinforcing a sense of belonging, celebrating personal and professional milestones and emphasizing inclusion and diversity.