Using Incentive Programs to Enhance Sales

At a staff meeting at the start of last year, I was casually discussing our company’s sales objective with our designers and other employees. During the conversation, I jokingly threw out a very lofty number. A question arose from one of our employees, who inquired what, if at all, the company would do to reward the employees if the target was achieved.

After giving the question some thought, I responded that if we hit the projected sales goal at the required profit margin (also a lofty number), I’d pay for everyone in the company – including their spouse or guest – to go on an all-expense-paid cruise to the Caribbean.

While I was sure that the new sales target would be a tall order for all of us to achieve, I also felt certain that if we achieved the mark, it would be well worth the expense of the trip.

I had originally targeted a 20% sales increase over an already-exceptional year. So I decided to raise the target to a 35% increase. I felt the promise of the cruise would be a strong incentive for everyone to work toward that goal, despite the challenge it presented.

So, off we went – trying to achieve the almost-impossible task of increasing sales from $3 million to $4 million in one year.

Now, I need to tell you that I already dole out monthly sales rewards to my staff – some of which are individual and others that are companywide – for specific levels of achievement. But this incentive was different. And so was the impact it had on our company.

I immediately saw a new attitude on the part of not just a few of our employees, but literally our entire staff. They all now knew that what they contributed individually to the effort was as important to them as each of the other employee’s. They also knew that the only way they could achieve the reward was as a team.

A NEW ATTITUDE

Our staff works hard every day, but the incentive I announced, much to my amazement, brought them to a whole different level. There was a renewed sense of camaraderie. Productivity picked up. And sales began to gain steam.

The notion of “team” also took hold in a new kind of way.

I stressed to the installers and the warehouse guys the importance of profit margins, and how the mishandling of product that resulted in a damaged cabinet or countertop would reduce margins because of the added cost of reordering or manufacturing.

I explained the financial impact of callbacks and complaints about poor workmanship, and how this could affect profitability. The order department and the drafting department were told how critical their functions were to the success of each project. The finance department was made aware of how critical it was to be sure that billing was accurate and that collections were handled in a timely fashion. We explained to the sales staff the importance of properly figuring every project, and that selling it with a sense of urgency was critical to the ability of meeting our sales goal.

While all our employees were certainly already aware of all this, the difference now was that there was a “carrot” dangling out there for them, in the form of a tangible incentive. And people went for it!

For the first time in my business life, I experienced what it was like to have everyone on the same page. It wasn’t that everyone couldn’t afford to take a cruise on their own if they wanted to. Instead, it was the idea that for doing what we all do every day, there was an opportunity for everyone to help their fellow employees attain something that was perceived as valuable. People truly wanted to achieve the “impossible.”

Over the next several months, I felt as though we were working in a whole new company. The employees were really pulling in the same direction. Everyone seemed friendlier, more spirited, more willing to communicate.

There was a renewed interest in the way other departments functioned. There was a marked absence of griping and finger pointing. Suddenly, no one seemed to care quite as much about who had the “easiest” job or the “shortest work week.” What they cared about now was how they could contribute to producing more sales at the required margins so that the entire company could go on a cruise.

Suddenly, it was no longer uncommon to see an installer asking a designer what they could do to help sell an upcoming job. Or for the order department to actually sit down with a designer to get the precise information so there was no mistake on an order. Similarly, it was no longer uncommon to see the support staff meeting with the designer and the customer to be sure they all understand exactly what was expected on a project, to produce the highest possible level of customer satisfaction. It was also no longer uncommon for drivers to be more careful in handling products, and in checking deliveries for accuracy, and in consulting with homeowners on where to place arriving product.

All of this because of an incentive that was offered if they could achieve a goal that I thought would be difficult – if not totally impossible.
Well, I was wrong in that assessment. The goal I set was achieved in nine months – and we ended the year with a 74% sales increase over the year before.

If I had told my staff at the beginning of the year that I wanted a 74% increase, they probably would’ve either laughed me out of the room, or left en masse. In contrast, it’s truly amazing what people can accomplish when they are challenged.

I cannot tell you the pride I took in telling all of our suppliers, customers and others that Central Kitchens and Baths would be closed for almost an entire week for a company cruise. And there wasn’t a single complaint about it from any of our customers. In fact, the number of congratulations we received from them was overwhelming.

This past April, the entire staff of our company (as a team) proudly cruised the Caribbean. The time we spent together playing and having fun definitely enhanced our friendships and brought us closer together. What a great experience it was for all of us.

I know of companies that spend thousands of dollars on team-building events and get very little in return. This cruise did not cost me money – it made me money. Why? Because it gave me happier, more productive employees, and did things for my business that money cannot buy.

We will offer other incentives in the next few years because we know now that it can bring employees closer together. Today, the quality of our work is as high as ever. We all take more accountability for our mistakes and have a much stronger commitment to doing the job right the first time.

If you have not tried an incentive program, I recommend it highly. There’s a reward in it for everyone, including the owners of the company.

Now let’s see about next year. Whitewater rafting? A ski trip? I can hardly wait.

Loading