This week’s author Roseann “Ro” Shales is an Executive Consultant and Party Plan expert with The Sheffield Group. She built a $12M organization with Tupperware then moved into corporate management with Weekenders USA, PartyLite, JAFRA Cosmetics and a few start-up companies. A strategist and connector, Ro and her teammates bring ideas to companies to increase sales, recruiting, leader development and retention. She is also the author of “RECRUIT! Connecting with People to Change Your Business and Your Life.”
Guest Post by Roseann “Ro” Shales
Using Incentives to Build Business
Do your distributors love your incentives? Do you get the results you desire from your incentive offers? Has your business grown through effective incentive programs?
An incentive is a strategy that creates an opportunity for you, the company, to motivate a distributor or team to perform desired actions. Well-structured incentives encourage your sales force to work together to achieve the goal of moving the company and the individual ahead.
Well thought out and planned incentives can help your sales force to:
• Build business for the long term
• Reach progressively higher goals
• Change the way they feel about their business and even about themselves.
The creation of any incentive is driven by the desire to enhance skills and behaviors in your sales force in a specific time frame and usually include sales, recruiting, and leader development. By including all three, you emphasis to your sales force that all three are important to create a successful business. A Direct Selling incentive must be paired with training to actually work. It is critical to get buy in from your field leaders to provide training to support their team members to go for the incentive and to achieve it.
There are two types of general incentives.
1. Results incentives based on end results/bottom line (actual sales, recruits, leader increases).
2. Activity incentives based on driving desired actions such as getting appointments or parties scheduled in a specified timeframe, finding new customers, conducting business presentations or interviews
Incentive Structures
1. Individual versus Team
2. Top people win
3. Everyone who reaches a specific goal wins
4. Multiple level winners
5. Personal best
Individual versus Team incentives usually come from field leaders to their personal team or entire downline organization. A leader may offer a challenge to their team members to sell more or recruit more than the leader in a defined time period. If a company offers this type of incentive, it might be in the form of a “record breaker” incentive. For example, challenge the entire salesforce to beat the all-time sales or recruiting record for a week or a month.
Top people win incentives are offered for a specified number of achievers. For example, the Top 10 in Personal Sales and the Top 10 Personal Recruiting in the first quarter of the year will be awarded a Spa Weekend or other specific award.
Everyone who reaches a specific goal wins incentives have a specific target and an unlimited amount of winners. Trip incentives generally fall in to this category. For example, the incentive may be based on earning points. The points may be earned for sales, recruiting, promoting leaders and stepping up in rank during the incentive period. Everyone who achieves 10,000 points earns a trip for one person including airfare. Everyone who achieves 18,000 points earns a trip for two people with airfare, and so on.
Multiple level winner incentives build and give bigger awards for higher achievement. Your incentive may have 4 levels of awards in a monthly offer based on personal and/or team sales or recruiting, to earn a collection of awards. For example, a leather wallet at level 1, a matching leather handbag at level, a coordinating rolling bag at level 3 and matching suitcases at level 4. Winners at each level earn all awards from the previous levels so those who do the most receive the greatest rewards.
Personal best incentives are customized to each participant and generally include a minimum achievement target. For example, the target may be to beat your best personal sales month by 10% with a minimum of $2,000 in personal sales or your best team sales month by $5,000 with minimum team sales of $7,500.
Always create specific rules to win an incentive and clearly spell out the details in writing. For a larger incentive, over a long time period, you will want to create an incentive brochure. The same applies to incentives with a wide variety of awards or levels of achievement. It is important to run your incentive offers by your Direct Sales or MLM Attorney to be sure your offer is legal.
How long should an incentive last? It depends on the incentive and what you are trying to accomplish. It could be a week, two weeks, a month, quarter, 6-months or longer. Some companies offer “umbrella incentives” that cover a calendar year and overlay shorter incentives. A “Fast Start incentive,” for new distributors typically lasts 60-90 days from enrollment.
Continue to promote an incentive throughout the entire incentive period. Use your website to recognize people that are on pace and to celebrate your early achievers. Keep your incentive alive in company emails, in your newsletter, on your social media pages, in your catalog, on flyers inserted into orders and on your shipping boxes in the form of custom packing tape.
You’ll want to assess the projected cost vs. projected benefits of every offer. When you do it right, the incentive will pay for itself through increased revenue from increased sales, recruiting and leader count that will continue to build your business long after the incentive period ends. Your distributors, who go for an incentive and do not achieve awards, may ultimately pay for the cost of the winner’s awards. Companies typically experience increased activity that would not have occurred without the incentive offer.
And finally, review the results of each incentive and then use that information to change or enhance your future offers. Our industry is constantly evolving and incentives that worked a few years ago, or even last season, may not be as effective today. Enjoy motivating your distributors to act, to stretch and to work their business smarter and harder to earn awards that don’t exist in the corporate world. And watch you sales, recruiting and leader development results increase while you company grows stronger through effect incentive programs.
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One of the most important aspects of an incentive is projected cost vs. projected benefits of every offer.
There are certain people in your organization that will earn every incentive but yet most likely will not be motivated by the incentive because they are doing what they do for their own reasons and rarely change that.
Occasionally an incentive may stretch them if it appeals to them but generally they are not even paying attention to the incentives.
Recognizing these people and factoring that in is key to getting a real handle on the results.
Thanks for a great article on a topic not often covered.