Posted : 10/01/2003

Posted : 10/01/2003

The Motivation Factor
Rewarding Employees With Sales-Incentive Programs

by Scott Eric Barrett

Every manager or business owner with half a brain knows happy employees equal better workers. But tanning salons need more than a bunch of perky workers to turn a profit—they need motivated individuals who have a stake in each bottle of lotion or tanning package sold. Sales-incentive programs are the smartest ways to attract and keep quality people. Incentives are a special form of reward intended to encourage, stimulate or incite employees to produce a desired action or behavior.

There are many ways to incorporate a sales-incentive plan into a salon. Gerry Siliverdis, owner of Sunny Days Tanning in Ewing, N.J., says the first thing he explains to an employee is how much money a motivated seller can make. If employees sell less than $300 in product for the week, they receive a 5-percent commission. If they sell more than $300, they receive a 10-percent commission. Siliverdis also motivates his staff by implementing monthly goals. The goals cover three areas: lotion sales, multiple-month packages and upgrades.

“This past season I updated the charts every few days that showed how close my employees were to the goal,” he says. “They checked the numbers immediately. It was a team project as opposed to the individual commission, which allowed the employees to motivate each other to reach the goal.”

True salespeople value an incentive program because they love the adrenaline rush that comes with interacting with the hope of succeeding, says Sharon Drew Morgen, author of Selling with Integrity.

“Sales jobs are emotional contact sports,” she says. “There is much rejection involved so salespeople often need a reason to keep going. The right kind of incentive program makes hard workers work even harder.”

Salespeople look for a variety of incentives depending on their personalities and those of the companies. Money usually is key for many, but some employees are happy knowing they’ve done a good job and have cared for their customers well, so there is a more spiritual incentive.

“The trick is to create a sales environment,” Morgen says. “In a sales environment, every single employee is motivated and all systems are lined up so that a sales culture gets stimulated and supported. You can’t motivate employees to sell if your business doesn’t have a sales culture.”

Only motivated employees produce at optimum levels. They need goals and incentives to keep pushing them to peak performance, says Barbara Spagnola, CEO of Concept Marketing Group, Inc. in Scottsdale, Ariz. Money and trips are the two biggest incentives. Many people can’t afford family vacations, so a chance to win a trip can be the driving force behind their sales efforts. Extra days off are another big incentive—these can be designated days or floating time.

“It’s never a bad thing to dangle a carrot in front of sales personnel,” she says. “Your sales force can make or break you and you always want them to work at their optimum sales level.

This is done through incentives or pay increases when performing at a certain sales level.”

Robert DeVore, owner of Island Cove Swimwear & Tanning in Parksville, British Columbia, offers his employees a 5-percent commission for every bottle of lotion sold. Also, in the off-season, his employees call “lost customers”—tanners who haven’t stopped by in at least six months.

“We offer discounts to get them back,” DeVore says. “If they come back because of the calls, I give the employee a 10-percent commission on the total sale before taxes. We did the same for our manager, plus, in order for her to keep up sales, we gave her a bonus every month. To achieve the bonus, she had to beat last year’s sales for the month by 15 percent. If she did that she would get 1-percent commission of the total sales as a bonus. It’s not a lot, but it all adds up at the end of the month.”

No-Cost Recognition

Money isn’t the only way to reward a skilled seller or conscientious employee, because even cash has its limitations. Most organizations’ performance reviews—and corresponding salary increases—occur only once a year. To motivate employees, managers need to reward achievements and progress toward goals by employees much more frequently than once a year. That’s why some of the most-effective forms of recognition cost nothing.

In a recent study of more than 1,500 employees in scores of work settings, Gerald H. Graham, professor of management at Wichita State University, concluded that personalized, instant recognition from managers is the most powerful way to motivate employees.

With a little positive reinforcement or backslapping, any manager or salon operator can make a major impact. It happens nationwide in different industries. Workers who stay late at Time, Inc. get cab fare home. Chevron keeps a treasure chest brimming with gifts so supervisors can reward employees on the spot. Home Depot’s Employeeof- the-Month Award gives honorees $100 and a merit badge, and engraves his or her name on a plaque. AT&T and Ford actually feature their best employees in television commercials. It all boils down to personal recognition, Spagnola says.

“Salespeople need and want compliments and recognition,” she says. “It gives them a warm and fuzzy feeling and, oftentimes, the needed motivation to produce more sales.”

One of the most prominent characteristics of today’s workplace is change. People don’t spend 20 years with one company anymore, so keeping quality employees is serious business.

Motivating people is far from an exact science. There’s no secret formula, no set calculation and no work sheet to fill out. Motivation can be as individual as the employees who work for a salon. One employee may be motivated only by money. Another may appreciate personal recognition for a job well done. The key is to understand that people love being singled out, even in simple ways.

Sales incentives are a positive way to acknowledge good or superior performance, to let quality people know that they are appreciated and, most important, increase a salon’s overall sales of everything from package upgrades to swimsuits and T-shirts.