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Why Sales Contests Suck

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Sales people are sooooo competitive! They love winning an beating each other!

Have you ever asked yourself if this is true? In fact, evidence from the field and from science shows that competition and commissions wreak havoc with your business goals. Long term damage, high burnout, annoyed customers, bad relationships between employees, gaming the system, name calling, and colleagues not helping each other are effects of competition in a sales environment, where collaboration should be a top priority.

This presentation, as shown at the Sales 2.0 Conference in San Francisco in 2014, questions the conventional wisdom of sales contests, sales commissions, and points to Gamification as a way to use better suited techniques to create a high performance sales team.

Published in: Business, Technology
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Why Sales Contests Suck

  1. 1. Mario Herger Why Sales Contests Suck
  2. 2. Video gamer girl
  3. 3. Does Gamification look like this?
  4. 4. Or more like this?
  5. 5. LinkedIn & Gamification
  6. 6. … empathizes with people by adding gameful experiences to work and life, helping them to fulfill their interests and motivations for the benefit of all involved parties. Enterprise Gamification
  7. 7. Gamification Design Elements EGC Wiki: http://www.enterprise-gamification.com/mediawiki/index.php?title=Gamification_Design_Elements
  8. 8. EGC Wiki: http://www.enterprise-gamification.com/mediawiki/index.php?title=Gamification_Design_Elements More Gamification Design Elements
  9. 9. Game Design Elements(full & barely legible list) EGC Wiki: http://www.enterprise-gamification.com/mediawiki/index.php?title=Gamification_Design_Elements
  10. 10. Make work more fun! Definition of Enterprise Gamification
  11. 11. All Games are about Competition! Statement Right? Wrong?
  12. 12. More Social than Competitive
  13. 13. Competition is the Opposite of Collaboration Competition in ecology and sociology is a contest between individuals and entities for territory, a niche, or a location of resources, for resources and goods, for prestige, recognition, awards, mates, or group or social status, for leadership. It is the opposite of cooperation. Wikipedia ①
  14. 14. Bartle’s Player Types Achiever Socializer Killer Explorer less than 1%(!) ~80% ~10% ~10% Selftest: http://www.gamerdna.com/quizzes/bartle-test-of-gamer-psychology Acting WorldPlayers Interacting ②
  15. 15. Competition doesn’t last [..] the same contest or even different contests that always last one day or always last three days or always last one week will become boring based on predictability and redundancy. [..] The longer a contest lasts the harder it is to maintain the motivation linked to it. [..] running a short-term contest day after day until people get tired of it will run it literally to death. Some people will lose their interest in that contest forever [..] Even a book praising sales contests talks mostly about problems and how to fix them and how to fix the subsequent problems… Source: David L. Worman; Motivating with Sales Contests: The Complete Guide to Motivating Your Telephone Professionals with Contests That Produce Record- Breaking Results ③
  16. 16. Competition disadvantages Women  Men compete, when there is any chance to win.  Best-achieving men may make other men depressed  Men work in groups  Women compete, when there is a high chance to win (they are better judges of their own capabilities)  Best-achieving women serve as “shining light” for other women  Women work in dyads, which discourage competition but emphasize relationship During hormonal cycles people tend to overload faster, because of already high dopamine/hormonal levels. Sources: Po Bronson & Ashley Merryman: Top Dog – The Science of Winning and Losing ④
  17. 17. Competition leads to negative behaviors  Make people less likely to help each other1 (e.g. Microsoft’s stack ranking2)  Aggression towards winner3  Narcissistic self-enhancement, where the winners would feel a malicious superiority over the losers3  Name calling4 – Muppet, Clancy, Bobblehead, Checkbook, Clampett 1. Bryant, B.K. (1977). The effects of the interpersonal context of evaluation on self- and other- enhancement behavior. Child Development, 48(3), 885-892. 2. http://www.vanityfair.com/online/daily/2012/07/microsoft-downfall-emails-steve-ballmer 3. Martá Fülöp, Mihaly Berkics, “Patterns of Coping with Winning and Losing in Adolescence“ 4. New York Times: Name It; Clients Are Called It, March 14th, 2012 ⑤
  18. 18. Potty
  19. 19. Competition creates administrative headaches  “20-30% of management time was occupied by the competition and commissions management”  “..also sales people spent signification amounts of their time on tracking their compensation and competition status.” Source: Debunking the Myth of Sales Commissions http://bit.ly/1avK3HP ⑥
  20. 20. Sales Reps: Social vs. Annoying? ⑦
  21. 21. When Commissions Wreak Havoc Study Reward Result Rhesus Monkeys solve puzzles Raisins Made more errors Soma puzzle cubes $1 Spent 3min less on puzzles Children play ribbon Spent less time playing Playing game 4-400 Rupees Worse performance Candle problem $5 Took 3.5min longer Creativity commission Paid work less creative Blood donation 50 kronor ($7) ½ of people volunteered Day care $3 penalty 2x as many parents late Radioactive Waste Storage $2,175 Agreement dropped by ½ The paid GMAT 2.5c / answer 15% less correct answers Commie High 12% bonus GPA from 2.71 -> 2.14 Sources: http://tinyurl.com/on8rvte ⑧
  22. 22. Sales reps LOVE competition! They love winning! Sales Managers’ Statement
  23. 23.  How long did competition last?  How often did you have to fix it?  Did all of your sales reps participate – or always the same few?  Did your sales reps help each other?  How long did you stay at average with your sales teams? Because you may have destroyed it for everyone else… Sales Managers Should Ask:
  24. 24. Transient Managers Create Addiction Source: Anton Suvorov “Addiction to Rewards” Long Term Manager Transient Manager Rewards  Few  Low  Many  High Information Disparity Lower disparity Higher disparity; confusing signals Employees  keep interest  feel up to the task  accept delayed gratification  loose interest  feel not qualified for task  prefer instant gratification
  25. 25. How many people can win? ⑨ Answer: 1, and everyone else loses
  26. 26. Sales Competitions - Summary ① Competition is the opposite of collaboration ② Only a handful of people compete ③ Competition doesn’t last long ④ Competition disadvantages certain demographics ⑤ Competition leads to negative behaviors ⑥ Competition leads to administrative headaches ⑦ Competition makes sales people hated ⑧ Only one person can win, but all others lose ⑨ Short term boost, long term damage
  27. 27. Gamification in Sales ① Give them Meaning ② Let them Collaborate Reframe the Question “Who’s the competitor?” (Hint: not your co-workers, and also not other companies; the customer’s problem is) ③ Give them an excuse to Socialize ④ Let them Learn ⑤ Give them all 3 Types of Feedback (appreciation, coaching, evaluation) ⑥ Gamification does not replace a compensation plan! ⑦ Let them have Fun!
  28. 28. Enterprise Gamification Consultancy LLC Mario Herger Yu-kai Chou Roman Rackwitz Marigo Raftopoulos
  29. 29. Books
  30. 30. Level Up Enterprise Gamification http://enterprise-gamification.com Enterprise Gamification Wiki http://enterprise-gamification.com/mediawiki Gamification Decision Engine http://www.enterprise-gamification.com:8083/ Octalysis http://octalysis.com/ mario.herger@gmail.com @mherger www.linkedin.com/in/marioherger/

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