Ongoing Sales Rewards
Accelerated commission schemes and fancy bonus plans have their place, but there are other, less formal ways to motivate the sales force. Smart CEOs know that well-timed suprises or individually tailored perks can do a lot to imspire salespeople (and the support staff) between January and December. Here are some of the more creative rewards we've heard about.
THE RING OF SUCCESS
Paychex, Rochester, N.Y., a $120-million provider of payroll services; 375 sales reps
* Reward: Paychex awards gold rings to sales reps when they've signed a career total of 300 new clients. They receive a diamond for that ring at 500 and win additional diamonds after 1,000 and 2,000 new clients.
* Reasoning: Gene Polisseni, vice-president of marketing, says the program rewards those who may not win annual sales contests but consistently perform well.
* Payoff: The program began 11 years ago, when sales were about $11 million. Today about 15 of Paychex's 375 sales reps now wear rings with three diamonds.
* Cost: Roughly $30,000/year.
RazorSoft International, Oklahoma City, a $9.4-million developer and distributor of video games; 9 salespeople
* Reward: Each month salespeople are ranked from 1 to 9, based on gross profit. Number 1 receives a $500 bonus (on top of commission) and the best office in the department. Even Number 8 gets $50.
* Reasoning: Commissions motivate only at the end of the month, reasons CEO Kyle Shelley.
* Payoff: Shelley used to base the bonus on gross sales, but switched to profits last summer; since then, gross profits as a percentage of sales have grown by 16%.
* Cost: About $16,000/year.
Grand Rapids Spring & Wire, Grand Rapids, a $10-million maker of springs and wires; 2 salespeople
* Reward: Both salespeople and plant workers are eligible for a bonus based on profitability and quality. The size of the bonus pool is determined by profit levels and the costs of quality-assurance training time, scrap, returns, and rework. If the cost of quality is 3% of sales, employees get their full share of profits; if it's between 2.5% and 3%, they get 125%; less than 2.5%, they get 150%. But if it's higher than 3%, they get 75% of their share; over 3.5%, none.
* Reasoning: It's the continual improvements in the factory that ultimately sell customers on Grand Rapids.
* Payoff: Employees take the initiative: one worker found a plater 250 miles away who produced better results cheaper than the plater the company had been using.
* Cost: $65,000 in 1991.
Amtech, Dallas, an $18-million maker of vehicle ID tags used for electronic collection at tollbooths; 6 reps
* Reward: Company throws a "victory party" for sales-support staff and customer-service reps after they land a new tollbooth account or meet a big deadline.
* Reasoning: People behind the scenes have put in many long hours to keep pace with Amtech's 8,900% growth in just five years. "Recognition is more important than real dollars, if you pay your people well" to start with, says chairman Michael Corboy.
* Payoff: Multimillion-dollar projects have been completed on time.
* Cost: About $5,000 for five parties a year.
Professional Salon Concepts, Joliet, Ill., a $6.5-million supplier of hair-care products and educational training for salon owners; 15 salespeople
* Reward: $200 Nordstrom gift certificates to the two sellers "who touched the biggest number of current and prospective clients" in a month, considering the number of customer classes taught, cold calls, appointments, and visits.
* Reasoning: Wanted to stress that the "more we're in front of the customer, the more we'll sell," says Terri Cowan, executive vice-president.
* Payoff: Average number of visits per month has increased from 115 before the contest to 148 a year later. Plus, looking at the sales logs "gave us a chance to look at everyone's time management."
* Cost: $400 a month.
Octocom Systems, Chelmsford, Mass., a $37-million maker of data-communications systems; 15 salespeople, including 8 in the U.K.
* Reward: Salespeople in England receive a place setting of fine china each month for meeting quota. Key settings (the fourth, the eighth) fall on key sales months, and patterns are changed so that if salespeople miss their sales goal, they may never complete the set.
* Reasoning: CEO Ian Davison believes cultural standards should help shape sales incentives.
* Payoff: "The pressure comes from spouses, not from peers. It produces results earlier in the cycle. Salespeople don't risk failure on the last days of the quarter," says Davison.
* Cost: About $1,000 a year for 25 place settings.
IF THE SUIT FITS...
NCO Financial Systems, Blue Bell, Pa., a $3.9-million collection agency; 6 field salespeople
* Reward: Junior salespeople get new suits.
* Reasoning: "This guy was a year out of college, and one month he finally broke through," recalls Chuck Piola, executive vice-president of sales. "So I took him out and bought him a new suit." And Piola sometimes lends salespeople his Mercedes for the weekend.
* Payoff: Salespeople see how it feels to be a top sales dog at NCO and are spurred on to make more cold calls.
* Cost: $320 for the suit, shirt, and tie.
-- Susan Greco and Michael P. Cronin