Sales contests are often used to motivate sales people. It is assumed sales people are naturally competitive. Therefore, giving them an opportunity to compete amongst themselves will be fun and improve both morale and productivity. In actuality it has the reverse effect. There may be a temporary boost in productivity. But there is a long term loss of both morale and productivity.
With most sales contests there are winners and losers. The winners tend to look down on the losers because they are losers. And the losers are jealous of the winners. The result is a division within the sales team. Animosity is created between team members. In addition, the winners generally tend to be the same set of winners. Therefore the losers tend to be the same set of losers. The result is poor morale within the team which causes reduced productivity. If only one person can win then the others, even though they are good sales people, resent the winners. They would have won but the contest was rigged or, if only the timing were different, or the winner just got lucky, or the winner had been in their territory longer, or the engineering staff had sent Jim rather than Joe for sales support, or any of a thousand other things. In addition, the sales team learns not to share with one another or help each other because they want to win next time. The thinking goes, “Why would I want to help my competition?” This type of sales contest creates dysfunctional teams.
Some sales managers realize this and therefore create contests where winning the contest does not automatically create losers. The contest is won by achieving a specified goal or sales level. Anyone who reaches a specified level wins the prize. That is theoretically better but in actuality, unless everyone reaches the specified level you still have winners and losers. Winners tend to look down on the losers and the losers are jealous of the winners. And the sales staff is still competing with each other.
I know of several sales managers who either think this is fine or do not care. Their thinking is like this, “I don’t want a bunch of losers on my team, anyway. If they can’t hack, too bad. I hope they quit so I can hire some winners.” The problem is they do not quit. They are just de-motivated. And besides that there are many more average sales people than super stars. So the probability is the sales manager will hire another average sales person and loose additional productivity while they are learning the ropes.
I am not against competition. I think competition is great. I believe that, not only is competition a good thing, it is vital to any business. You just need to be sure you are competing against a true opponent not an artificial one. So ask this question, what is the purpose of a sales contest? Why have a sales contest at all? The ultimate goal is to have a motivated sales staff that consistently improves sales revenue. A sales contest with winners and losers fulfils none of those goals. You may motivate a few sales people. You may have a temporary boost in sales numbers. But the team has not improved. And if the sales numbers improve, they are not sustainable.
Would it not be better to have the entire sales staff improve their sales revenue? Would it not be better to have the hot shot sales person motivated to share his tricks of the trade with those who are struggling?
Instead of creating individual rewards. Create team rewards, a common cause if you will. The individual wins only if the team wins. If everyone is working for the same goal then they work together. The stronger help the weaker become stronger. The result is an over all stronger team. The skills developed during the contest are now sustainable. The team has long term improvement. Rather than individuals working against each other. Everyone’s goals are now aligned with not only with the sales manager but with the business as a whole.