Sales Contest using an Award Pyramid
“Award Pyramid” is a term Brightspot coined for the tiered prize levels of a closed-end sales contest.
Pause. You might need to re-read that sentence.
So, tiered prize levels are first prize, second prize, third prize – or plural for prizes or additional levels. Technically, for incentive design purists, “reward” levels is a better term than prize levels because sales reps earn rewards, whereas prizes are awarded to random winners.
“Closed-end” incentive programs have a fixed number of prize winners (oops, reward earners). Open-ended contests have unlimited prize redemptions, such as point programs where every sales rep can earn a reward.
Incentive Motivation Consulting
At the top of the pyramid with the highest value and a low number of winners is the grand prize. You could call it first prize, but “grand” seems more, uhh, grand. Its purpose is to create excitement, attract interest, and add the WOW factor, so participants stop in their email tracks and ask, “what is this prize, and how do I win?” For example, in the sales office setting, the poster prominently promoting the grand prize trip to Hawaii, the World Cup, or the kitchen makeover. Summary: the grand prize is often more for promotion than motivation.
In the middle tier are the 2nd place rewards to add more winners, more fun awards, and further promote the incentive contest. Some sales reps may be skeptical they have the pipeline or territory to win the grand prize this quarter, but if they stretch (there’s the motivational impact!), they could win one of the second-place prizes. There is no magic quantity for 2nd place rewards; that’s where the art of incentive design expertise from smart incentive agencies is valuable.
At the bottom, as the level widens, the award pyramid shape symbolizes many more winners but at lower values. The 3rd place or consolation prizes create lots and lots of winners, touch more participants, reinforce the promotion (and its featured products and calls-to-action), and overcome the cynicism that no one ever wins when they see and hear the chatter of winners. 3rd place prize values usually range from $25 to $250. It is wise to have a sufficient quantity of prizes so that each local sales office or team is statistically likely to witness at least one winner. See our spiff microsite for more tips.
If you strive to be an incentive-design-PhD, think about how the shape of the pyramid could change for different client needs. A tall pyramid would mean the grand prize is very valuable, say $10,000. A very wide pyramid base would indicate a huge quantity of low-level prizes, say 100 quantity of $150 prizes.
Sales Contest Examples
A few years ago, Brightspot managed a channel incentive contest for Avaya with 5 grand prize trips for 2 to the Summer Olympics (worth $20,000 per winner), and several sports-themed 2nd and 3rd prizes, such as $250 Nike gift cards. This would be a very tall and narrow pyramid – with high grand prize values (tall) and few 2nd and 3rd prizes (narrow base). Here’s another tip. Brightspot recommends aligning all the prizes and levels to a common theme – in this case, the Olympics.
A retail client with more than 1,000 locations and more than 25,000 employees had a contest with 50 domestic trips as grand prizes that were worth approximately $2,000 per trip. While 50 trips seem like a large quantity, only 2/10 of 1% of all employees would win. The 2nd prizes are monthly prizes drawings for 18 merchandise awards worth $300 each, so the 2nd place level adds more winning opportunities with 6 monthly drawings (18×6). And the base of the pyramid is wide, wide, wide because we rewarded over 10,000 spin & win prizes at low values, such as $10 and $25 e-gift cards.
The Frontier Red Zone sales contest won a Motivation Masters Award from Incentive Magazine. This sales contest challenged 28,000 technicians in 270 U.S. locations to make referrals for new telephone, internet, and video service. The award pyramid included a trip for 2 to the Super Bowl as the grand prize, Yeti cooler tailgating coolers as 2nd prizes, and personalized NFL jerseys of their favorite team with their name stitched across the back!
For no-obligation ideas or friendly advice, shoot us a note. We’re happy to help you lay out your award pyramid and decide the best ways to motivate your team.