Speaking of Promotions
Edition: March 2003 - Vol 11 Number 03
Itís springtime. And that means itís time for product promotions.
For this monthís E-Vent, we asked Dail-E News readers how they view promotions Ė and how providers respond to them. We asked two questions:
1. If you are (or were) a sales rep, what kind of promotions do/did you find most effective? Why? (Please, no company names.)
2. If you were to run a company, describe your ideal product promotion, that is, one designed to get your reps or your distributor reps motivated to sell your product(s).
Here are some responses.
. The best promotions have been those in which the customer has an incentive to buy and the sales rep gets a spiff as well. One without the other does not give both parties reason to buy in.
[For the ideal promotion], I would try to concentrate on ways to get equipment placed through promotions that would generate a revenue trail in supplies. Use creative ways to place equipment at no charge whenever possible, and get the revenue stream running.
. [The ideal promotion is] based on meeting the key objective, either selling profitably or growing sales. Typically, something without a cap and based on a percentage measurement.
. I always like promos that provide a rep incentive that directly compensates you for your successes. Further, a major exam room equipment maker (that shall remain nameless) has it right: They give the rep a nice carrot, while doing something good for the doc. The proverbial win-win. Who can argue with that?
. What gets me motivated to sell is enthusiasm, good product training and support from the vendor reps. In addition, the promotion must be simple: Buy this or this many, get one of these. Sell this many, get this much money
. I believe that the best promotions are those that reward reps based on their participation. That is, not a contest in which one or two are winners, nor an across-the-board award of a flat amount, but a reward commensurate with achievement. The promotion should also reward the customer with something other than free goods. I believe that free goods only result in short-term future sales. Finally, I think the promotion should tie together a product the customer is already using with a new or seldom purchased item that would be used in the same procedure or the same specialty.
. Too many promos spoil all. A sales manager should limit promos to 3 per period (per two week slot).
. Make sure that you have literature ready, samples if needed and product ready to ship. Many times it isnít the promotion thatís bad, but the execution of the plan.
. For our company, the salesman spiffs are shared with the other employees of the company. We implement this to create a team spirit and it gets everyone involved and enthusiastic.
. I am a distributor marketing manager, who sets up our company promotions. Hereís what works:
1∑ Get an agreement from the sales team and sales management that they will support the promotion.
2∑ Select the vendor and products.
3∑ Do a buy in; get special costs as needed; have stock on hand.
4∑ Set a time frame Ė no more than three months.
5∑ Set a goal for sales team and sales management.
6∑ Establish spiff payouts and goals for both sales team and sales management.
7∑ Kick off promotion at a sales meeting (when possible). Have plenty of literature for support and feature on flyers, invoice stuffers, commercials on hold during promotion.
8∑ Do weekly reminders via voice mail/e-mail about the promotion.
9∑ Acknowledge each time someone sells the product on promotion.
10∑ Do weekly recaps to track promotion.
11∑ Target reps that arenít reaching the goal.
12∑ When the program is complete, get results immediately and get the spiff payouts out on a timely basis.
13∑ HAVE FUN.
. Iíd run a promotion where everyone was a winner, with multi-tiered spiffs or rewards for performance. The top-level winners would go to Half Moon Bay or Jamaica with the president of the company and perhaps key customers.
. As president of a company now and a former sales rep for 17 years, Iíve found that promotions on the surgical device (acute-care) side of the market arenít very effective. Iíve found that the primary care marketplace is much more receptive.
. My ideal promotion would be to offer Ö distributors Ö additional financial incentives when converting surgeon-preference [items] from our competition, and to hold regular sales incentive meetings at attractive domestic destinations as rewards for their hard work and dedication.
. Promotions that Iíve found the most effective are ones that are front-loaded with commissions and offer large commissions after a certain growth level (such as a low commission for achieving 90 percent of your goal, with a bigger commission percentage at 100 percent and a huge increase for anything above 100 percent).
. [Ideal] promotions provide a long term residual rather than a short-term, one-time bump. If your level of success can drive incremental commission increases so there is a lasting return, itís going to be received with greater enthusiasm.
. Money and trips are OK, but they need to be planned for and with kids. Sometimes thatís difficult. Money is easiest, because I can do anything I want with it.
. Money is the best motivator, but the problem is offering enough money to make the promotion gain attention and be worth the repsí time and interest. Big trips also work well...but you need a lot of sales to make this work.
. [Description of the ideal promotion]: Easy to implement, easy to explain, good payout.
. [A simple plan]: Everyone who makes 125 percent of plan gets a gift voucher for $6,000 for travel anywhere with anyone. If you hit 150 percent, you get $8,000 worth of travel.
. [The ideal] promotion rewards new product growth, rewards speed/timely sales.
. [Description of the ideal promotion]:One that is ďGeared for GrowthĒ Ė pay out a spiff, bonus or incentive based on incremental growth of new business, not for maintenance of business. Could also include programs designed to increase contract compliance.
. Using the K.I.S.S. principle, paying a percentage on units sold appears to be the most beneficial for the reps and easiest to manage. Itís a matter of finding the magic formula that is a high enough percentage-wise to pique their interest, while maintaining a satisfactory profit margin.
. I find the promotions that are most effective are the ones where everyone has a chance to win. Although competing with peers is fun, when everyone has a chance to win, it keeps everyone motivated.
If I were to own a company, the ideal promotion would be one where I could offer points toward some kind of credit card, [with which] the reps could buy whatever they wanted.
. [Description of the best promotions in which the reader was involved]: Products that either had a niche or were easy for the customer to switch out. Promotions that offered the rep an incentive to push the promotion.
. [Ideal promotion]: One that [is] ďGeared for GrowthĒ Ė paid out bonus or incentive based on incremental new business, not for maintenance of business. Could include program for increasing contract compliance.
. [Description of best promotions]: A promotion designed for the sales rep, distributor rep and end user customer to all gain something economically. I donít feel a promotion is good if someone in the chain has to give up margin on his or her end. The idea of a promotion is to move product in volumes in a specific period of time, and I feel the manufacturer should bear the cost of this. A good promotion to a manufacturer is one that gives up money in the short term for long-term gains.
. Getting a distributor to conduct a promotion is somewhat difficult these days. They are so busy with all the different GPO requirements, they question the value of a time-controlled promotion. Some sales reps may be motivated if the incentive is worthwhile, however [they] would be hesitant to suggest a new product or vendor if the customer is satisfied with the current product.
. [Description of and rationale for the ideal promotion]: Reps are coin-operated. It must be a high margin product that can provide them a good incentive. They must have good product positioning training and material, educational materials for their customers, and the product must deliver demonstrable value to the buyer.
. [The best] promotions pay residuals on products sold every month (such as a dollar a case), for a period of six to 12 months.
. [Description of the ideal promotion]: Focus and combine incentives on high-volume, low-to-middle-margin products and low-volume, high-profit-margin products. Include no more than six to 12 different types of products. Payoff on so much per case over a period of time.
. While not published in business books, the central ďstringĒ running thru all (or at least most) of us is money motivation. We are all here to make money. Pull on it for the customer and/or rep, and you have their attention. This, of course, doesnít replace the need for professional service, price and product. Itís a game of competing for the customer and repís TIME. They will always go where they can make the MOST money with the highest percent of success.
. Iím an independent manufacturerís rep, who spent 10 years with a regional, family-run distributor that became a national supplier through mergers and buyouts. As a family-run distributor, we were compensated very well and had many motivational promotions that rewarded us for adding profitable business. While many of the promotions (run in conjunction with manufacturersí focus and financial incentives) provided nice spiffs in the form of financial remuneration and trips, I mostly prized the competition between the reps. [If a company provides] products with significant value to the customer, which answer real concerns being faced by caregivers, most reps will carry that message forward with enthusiasm Ė promotions, or not.
. The most important aspect of [the ideal promotion] is that its goal needs to reflect the overall goals [of the company]. Donít have us do something that takes away from bigger goals. Example: Donít push a low-commission product with a promotion if, overall, Iím going to make MUCH more money selling other items.
. My [ideal] promotion involves cash rewarded during a national sales meeting in front of everyone. A simple check sent to the rep during the year will not motivate other reps to succeed.
. Motivating sales reps is easy-use money. Using other motivational tools, such as ďpointsĒ towards purchases or trips, is not as likely to drive the sales rep to succeed. An ideal promotion might be to ďsuper sizeĒ an order with half of the expense. This promotion would be easy to explain to the customer and a ďno brainerĒ as far as the customer is concerned.
. [The best promotions are] simple ones that can be accomplished during normal call patterns. Iíve seen too many promotions where not everybody has a chance due to their specific territory.
. All reps are competitive, so Iíd make prize awards to the top 10 percent of participants, with regular ranking reports to the entire group. Everyone will want to be at the top and the prizes are a nice boost.
. I always set up my promotions to give the reps a graduated cash reward for doing a great job during the promotion, meaning that the percentage payout goes up with more sales. You also need to take small-market reps and rookies into consideration. If you balance total sales dollars with percentage increase in sales, you donít alienate the small-market reps. How often have you seen small-market guys toss out a promotion on day one when they realize itís really for the top-market or well established reps?
Iím a purchaser, not a salesman, but I can tell you that promotions are never effective unless they involve undifferentiated commodities (4x4 gauze). If an item is not in your formulary, it doesnít matter how great a buy it is. And even if itís in your formulary, your stocking locations likely have only a limited space to hold the product, no matter how good the buy is.
. [The ideal promotion is] built around better utilization of products leading to reduced cost per procedure, albeit possibly higher cost for selected products.
. We placed our reps inside the hospital to work for four to five days using the products. They came back with enthusiasm and ďready to go.Ē The customers loved having the reps work alongside them. Word spread that our reps knew what they were doing. Having been in hospital management, now in sales, it makes a world of difference. Confidence is the best self-motivator in the world; the rest is just glitz. Buyer and decision makers are people. They want people who care and know whatís going on.
. Iím an OR nurse and sales rep. Handouts and give-aways (although costly) are the best way to get a new product to stick and also to stimulate conversation when Iím not there.
. As a materials management director, I usually didnít respond to promotions for several reasons. If it involved capital equipment, there were budget and issues. Often it involved a bundled purchase of equipment and disposables, which I didnít like; and we were going to negotiate anyway and I felt I could get an equal or better price. If the promotion was for stock or high volume non-stock, there could be space issues, directives from management to reduce or maintain low inventory levels; or I found I could get better value by keeping my cash in the bank drawing interest, than the promotional price offered by the vendor.