Advice and Tips from Tim Peniston-Bird, Founder of Orangutan, and an expert in Sales Incentives
The Pareto principle states that for many outcomes, roughly 80% of consequences come from 20% of causes
In sales teams, this translates into the top 20% accounting for 80% of your sales. You know them, they:
- Use great questioning techniques to facilitate purchase
- Always position the sell including all the extras so that if they do have to negotiate down on price they do so by removing extras
- Price it in £’s per month
- Collect cross sales leads
- Get referrals every time
Hardly a surprise they do well is it? Unfortunately, that leaves the other 80% of your sales team who under-perform and will either churn or continue to tread water, costing you sales.
Most incentives and sales drives tend to focus on the top performers. The rationale is that if the big hitters can work a little harder and get an extra 25% then you will see your overall sales rise by 20% and only need to reward a few people – right?
Her is the problem, these top 20%:
- Already exhibit the right behaviours so all you can do is to get them to work harder
- Are successful and earn well – so need a high bar to get them to work harder
- Stop once they hit the award they are focused on
- Are high risk of being poached by competitors
Now imagine if you could get the whole sales channel to work the same way and exhibit the same behaviours – you would increase sales by 300% permanently and spread your risk as every sales person would be contributing equally.
The secret to doing this is to identify each behaviour you want everyone to exhibit, do a bit of training or distance learning so they understand: what, why and how they need to do and then get them to do it.
Typically we do this by:
- Asking participants to do it once – that’s not too scary is it?
- Offering a recognition and reward opportunity if they succeed
- Repeat the process 7-10 times, continuing to positively reinforce the new behaviour
By the end of this cycle, we will have built a new habit and they will continue to exhibit this behaviour long term meaning you can move them onto the next behaviour. Once you have developed all the habits of successful sales people in them then they will perform like a top 20%.
Honda Bikes were trying to get sales staff to get customers to buy extended warranties and service plans – previous in-house programmes had failed to succeed.
We followed the above strategy over an 8 week incentive which resulted in a 2000% increase in sales of extended warranties and service plans – and most importantly, levels remained high after the incentive ended because we had built a new sales habit.
But hang on, rewarding them for every sale would be really expensive doesn’t it?
Watch out for our article on Smart rewards and Using games to drive change to discover how you can deliver incredible change for a marginal cost