Industry News: Sales Promotions Thrive Even When The Economy Doesn't


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Industry News: Sales Promotions Thrive Even When The Economy Doesn't

Issue: 2009sep

Even though sales for many promotional products have taken a hit from the sluggish economy, sales incentive programs and contests continue to motivate individuals to do their best and boost their employers’ bottom lines.

Jeff Burnett, sales and marketing vice president for Newton, Iowa-based distributor The Vernon Company (UPIC: Vernon) says under normal economic conditions, the “ups and downs” of the company’s bottom line were not a big factor in the value of the incentives they offered. This year’s annual prize was a trip to Big Sky, Montana.

“Like many companies, we have some longstanding incentive programs that people have come to count on,” says Burnett. “Because these incentives have been around for a long time we also know how to budget them.”

Vernon’s annual contest is timed according to its fiscal year and is not associated with any sales cycles, he says.

Grand Island, New York-based supplier Starline USA, Inc. (UPIC: STAR0009) uses promotions to help foster better use and understanding of its sales tools.

"During this recession, Starline looks to provide sales incentives designed to reward account or account activity growth," says Dan Norris, Starline president.

"Our present Win a Wii Contest is designed to reward our distributors for taking time to learn and use the virtual sales sheet, with the belief that once the process and ease is experienced, they will continue to use this free service."
The contest, which centers on use of the company's QuickPick program, generates awards on a monthly basis. "We like the message an annual program sends to our distributors," adds Norris. "We see QuickPick as a fundamental product/idea presentation method with longevity in the selling process."

Norris agrees with Burnett when it comes to the value of incentives. ""Our allocation of marketing dollars for sales incentives do not need to change during downtimes," he says. "They need to be well placed and carefully followed."

Prior to the down market, Vernon may have used the rules of the incentives programs to slightly adjust how many salespeople were awarded, depending on the company’s estimated revenue, he said. “The current market has caused us to make some temporary changes to our largest incentives.”

But sales incentives aren’t a means of boosting overall sales numbers; rather, the programs contribute to corporate spirit and morale—a good enough reason to include them, says Burnett.

“They are fun additions to a company's marketing efforts. Salespeople have so much going on and are pulled in so many directions that for every rep who gets fired up enough about a contest to change their behavior, there seems to be another rep whose sales decline for one reason or another,” he says.

There are challenges to keeping such programs effective and fresh. Burnett says a good contest produces results that would have been obtained otherwise. “The worst contests reward salespeople for something they would have done anyway,” he adds.

Norris sees the benefit of incentives as this: "A sales incentive contest drives sales increases because it drives attention to a product, category or service. The people are motivated due to the attention the company places on the contest."

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