Sales Contests – Are they always a good idea?

When sales are down or stagnant, a marketing manager’s favorite word’s of wisdom are “It’s time we ran a contest”. Is incentivizing your sales team to sell more always the best idea? Let’s have a look.

For B2C Business

Sales Contests are a great way to push sales. Products (be it a fridge, phone or a bank account) do not require too much involvement in terms of customizing according to the customer’s needs. Everyone has a general need, which is mostly the same. For example, a tv may be big or small but we are not creating a special product unique to each individual. Involvement is fairly low. In this case, sales contests are a perfect tool during lean periods and work towards providing a focus point to your sales team. Products are standard, chances of dissatisfaction are low. One must be careful – running too many contests will only lead to sales achieving their targets only when there is contest running. Customers will also make purchases only during contest periods, since they are so frequent in your organization.

For B2B Business

When it comes to B2B, contests may not be the best option to bank on. B2B low-involvement products like material, office supplies, computers – yes, a contest will work. Suppose your products/services are high-involvement. For example, you are in building, contracting, our manufacturing and installing a complete system for another business. Or you provide complete on-demand print services for companies. This type of product/service has a lengthy life-cycle with plenty of planning and strategy before actual execution. You must delve deep into understanding the customers needs before making any decisions. If you run a contest, your sales team will definitely cut corners to complete the sale within the contest period. Misselling may occur. If the contract and sale were rushed just to meet a target, there are high chances of your customer not getting what they really need and being unhappy with you. Which means your customer satisfaction and reputation will take a hit. In B2B as well – regular contests might shift sales behavior towards selling only in during those periods. In conclusion, sales contests are a great tool when used wisely – depending on the type of business you are in.