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When Should You Push Top Performers?
Successful salespeople are typically self-driven, but even the best need encouragement and enticing occasionally. When is the best time to galvanize a salesperson or an entire sales team to achieve a predetermined goal?
To formulate his hypothesis on this question, Columbia University Professor Ran Kivetz borrowed from behaviorist Clark Hull's goal-gradient research from the early 1930s. Hull showed that rats ran faster through a maze as they neared the reward of cheese at the end. Similarly, Kivetz theorized, participants in an incentive program will accelerate the behavior necessary to receive a reward as they get closer to that reward.
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In his field studies, Kivetz found that participants in a café reward program accelerated their purchases of coffee as they neared the 10-cup total that would earn them a free coffee. In analyzing 950 redeemed cards (nearly 10,000 individual purchases), Kivetz found that the average length of time between purchases decreased from almost 3 1/2 days for the first, second and third cups to about 2 1/2 days for the sixth through 10th cups.
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Consistent with the idea that motivation depends on the distance from the goal, participants who finished one card and started a second increased the time between purchases at the beginning of the second card and accelerated again as they neared the 10-cup goal a second time. Similar results were seen in a program sponsored by a developer of music organizing software that offered free downloads after visitors rated a certain number of songs.
An additional significant discovery was that the "illusion of progress towards the goal" also motivated purchase acceleration. A separate group of participants was given a 12-cup coffee card with the first two cups already credited. Despite needing to fulfill the same 10-cup quota as the first group to qualify for the free coffee, the 12-cup group reached that mark almost three days faster than the 10-cup group.
What does all of this mean for sales managers attempting to motivate the troops?
"People will accelerate their effort in your incentive system as they get closer to their goal," says Kivetz. He also found that people are significantly less likely to drop out of incentive programs as they near the reward, and those who reach the goal are highly likely to stay involved.
Kivetz's recommendations for sales incentive programs as a result of these findings:
■ Create highly visible reward meters so participants know how close they are to receiving a reward
■ Target and time communications and promotions to participants as they get closer to a goal
■ Create the illusion of goal progress by starting participants off with points or some other credit that instantly vests them in the program
■ Build an accelerating or tiered reward structure that allows participants with equity to improve their status
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