Sales Recognition Programs: an overview

Sales & Dealer Recognition
Sales & Dealer Program Fast Facts

Planning: Requires 3-4 months per program. Vice Presidents of Sales, Sales managers, District managers and ultimately other top officers are involved in creating the On-Plan (see Program Design below) elements of the program. The President and CEO are involved in the Achievement and Career (see Program Design below) recognition elements of the program.

Major Markets: Insurance, Auto parts/tires/accessories, Toiletries/ Cosmetics, Automobile/Trucks, and Food Products

Expenditures:
65% less than $50,000,
Approximately 10% $50,000 - $99000,
just under 25% $100,000 plus.
Incremental sales increases: 5% - 14% (44%),
15% plus (52%)
Budgeting: Generally, 8-10 percent of anticipated sales increase. The budget is allocated as follows: 70-75% Awards/ Incentives, 20% communication, and 5- 15% administration.

Program Objectives:
Increase overall volume (86%)
Sell new accounts (57%)
Introduce new products (41%)
Improve morale & goodwill (40%)
Move full line or slow products (17%)

Sales Program Overview
Rationale: Organizations are more focused than ever before on managing their sales forces in ways that ensure high performance. Senior management must focus on compensation, recognition and reward strategies and programs that motivate their sales forces. The objective is to drive profitable revenue by focusing on the most profitable customers, the highest potential markets and the most margin-rich products and services.

Program Design: A well-designed Sales Program encompasses both a recognition and reward/incentive component. Both the recognition and the reward/incentive components are centered on "events". The recognition component may be subdivided into Achievement, meeting/exceeding current year objectives and Career, meeting/exceeding objectives over an extended time period. Many organizations combine these two elements of recognition, Achievement and Career, with the establishment of elite clubs such as President's Club, Chairman's Club etc.

The reward/incentive component manifests itself in the "On-Plan", meeting short-term objectives i.e. quarterly, elements of the program.

Program Content: The make-up of a Sales Program is necessarily based on the most effective motivation for a unique, and often diverse, population. However, there are three key elements of program content; the specific Awards/Rewards themselves, the Category of the awards/incentives and the Need being satisfied.
The Awards/Incentives range from Jewelry/Rings, Plaques & Certificates, Group Travel to Cash/Cash equivalents.

The Category of the prize may be Compensation (bonus, commission, variable commission) Incentive, generally for the On-Plan element, to focus activity and behavior and Recognition, to sustain and enhance appropriate behaviors and results.

Need refers to the personal/intrinsic requirements of those for whom the program was established. Money, Status, Security and Respect are the "Needs" most often considered in Sales Programs.
Program Measurement: The ability to effectively measure a Sales Program is one of the most attractive features of this type of recognition and reward. The most common Output measures are New Accounts/Customers, Total Volume Growth and Total Units. Others may include Shelf/Display Space, Contract renewals or Profitability.

More organizations are expanding to Activity measures. Examples of Activity measures would include the number of Presentation, Customer Satisfaction Ratings and Closing Rate.
Finally, measurements may be by Segment. That is by region, district, office size business unit or markets served. These forms of measurement are not mutually exclusive. Utilizing a combination of Output and Activity measures by segment may prove to be more the rule than the exception.
The ability to measure results allows the organization to pay for the recognition directly from the revenue generated by the program as a result of increased sales.

Wells Fargo responds to criticism over recognition spending

Wells Fargo responds to criticism over recognition spending

The Value of Team Member Recognition

Okay, time out. Something doesn't feel right.

Everyone agrees that in this economic environment, all employers should re-examine how much they spend on recognition events for their employees. Especially publicly-traded companies owned by their shareholders. Especially institutions that received investments from U.S. taxpayers through the U.S. Treasury's Capital Purchase Program.

The problem is many media stories on this subject have been deliberately misleading. These one-sided stores lead you to believe every employee recognition event is a junket, a boondoggle, a waste, or that it's for highly-paid executives. Nonsense! Because of the misperceptions these stories have created, Wells Fargo has decided to cancel all its major annual recognition events for its team members for the rest of this year.

So who gets hurt when this happens? The Wells Fargo team members across America who are most deserving of recognition and our gratitude. Tellers, Personal bankers. Phone bankers. Financial advisors. Mortgage salespeople and processors. Operations clerks. Technology specialists. Credit analysts. All of those who make it possible for our customers to save, invest, own homes, and build businesses that create jobs - team members who enabled us to make more than a half trillion dollars in new loan commitments and mortgage originations in the last year and a half. These team members work long hours to support their families and to make sure we give our customers the very best service we can possibly give.

Annually, for the past 20 years, we've recognized our top team members from various businesses at several special four-day events, like the one we had planned for our terrific mortgage team who helped us originate $230 billion in mortgages in the last year. For many, it's the only time in their lives that they're publicly recognized and thanked for a job well done. This recognition energizes them. It inspires them and their team members to want to create an even better experience for our customers. Another annual event - which our top performers in community banking had all looked forward to - was to have been held in May. But not this year. Who loses besides our team members? The workers who depend on our business. The hospitality industry. Hotel housekeepers. Restaurant servers. The airlines.

The funds to pay for recognition events such as these do not come from the government. They come from our profits. We believe our profits actually increase by rewarding and recognizing our best performers in sales and in service. Competition to be recognized inspires everyone to work harder and smarter. We're as frugal as any company in spending our shareholders' money thoughtfully and responsibly. Events such as this are the heart of our culture because our product is service, delivered by caring, energized, talented, loyal team members who earn competitive, fair wages and benefits.

We just hope the hardworking people of America understand, appreciate and support employers who try to do the right thing for their team members, customers, communities, and shareholders.

Since we aren't thanking our award winners in person this year, we'll have to do it this way. Thank you, all our 281,000 team members.

You are the best!

John Stumpf
President and Chief Executive Officer

Reprinted from USA Today
Monday, February 9, 2009

 For more information, contact RCB Awards at 1-800-929-9110.