Ep. 018: Powertalk, Incentives

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I am not Mr. Lebowski. You're Mr Lebowski, I'm the dude.

Hey, I tell you what, you can take a good look at a is asked by sticking your head up there, but wouldn't you rather take his word for it?

Film and eat all the frickin chips. Kip.

Point. Don't be jealous that I've been shown online games all day.

We have a pond in the back. We have a pool and a potted plant. A few. Good.

Welcome to the iSellBeer podcast with Tracey Neal, a production for sales reps and distributors who are driving around all day selling beer and the official home of the iSellBeer Nation Facebook Group. And now your host. The 1989 winner of the John M. Studebaker Wheelbarrow Race in Hangtown, California, Tracy Neal!

Tracy Neal:
All right. Welcome to our first power talk. My name is Tracy Neal. I'm the president founder of iSellBeer. And today's topic for the first power talk ever is incentives. Now it is the key holiday week. And so rather than having a guest on the podcast today, I thought I would just talk about something that I'm a bit of a subject matter expert in through my years in the industry. And I got this idea by talking to other podcasters who were using guests over and over. And they came up. They said, you know what? Our listeners have really enjoyed when we do something that's subject specific to the industry. So today we're gonna talk about incentives. I'm sure it's key week in the summertime. Everyone's out there going against incentives, trying to earn some extra money, some extra points, some extra trips, electronics, whatever you're going after. So I'm just gonna tell you some stories and some examples and some learnings that I've had from running incentives over the years. As many of you know, I started the industry in late 1994 and back then the way we used to run incentives was with the Polaroid model. So the Polaroid camera was used to take pictures of evidence of what you had done for an incentive where there was a tap handle, a display or a new points of distribution in the inner is interesting rule. The distributorship that I worked at in the late '90s was that as a supplier you could run incentives if you could afford the Polaroid film. Now, the Polaroid film was pretty expensive back then, and you have to remember that at least a third of it, if not half of it, went to personal use by each and every sales rep out there. So you had to buy quite a bit a Polaroid film in order to get your information back. The distributor I was in had did have some craft beers like we had Pyramid. We had a Boston beer with Sam Adams, we had St. Stans and Sierra Nevada. And a lot of those brands did not do incentives back then simply because they didn't have reps in the area and they didn't have budgets. And, you know, for lack of a better word, they didn't have money set aside to pay for the Polaroid film. So I was selling Steinlager and Killian's Irish Red. I was lucky enough to be under the Coors portfolio. Therefore, I did have a budget. I had plenty of Polaroid film and I ran a lot of incentives. Now, the first incentive that I ever did was in January of early 1995, and it was to sell Steinlager and it was to celebrate the America's Cup which was coming to San Diego in early 1995 and I was new to the industry. I was 22 years old. I didn't really know how to run an incentive, but it really was one of the best incentives I ever ran simply because I didn't have the experience or knowledge on how to write in incentives. So I did it the only way I knew how, which was to make a gameboard. So I went to the local didn't and called Home Depot back then. I don't know what it was, but the local lumber shop and got myself a 4 by 8 piece of plywood and we painted it. And then I drew a map of New Zealand on there and then put ocean all around. And what I did was I made a little a little sailing ship, a little sailboat for each sales rep, and I had intervals around the two islands of New Zealand that were based on points. And then for the sales reps, every time they would sell new placements. So we didn't have draft back. That was really about new placements. That big bottle, I think was a twenty five point four ounce bottle of Steinlager . And then we were just starting to get into the six packs of Steinlager . So every time they made a placement or did a promotion on premise, they would get points. And back then, all the sales reps would come back to the warehouse at 4 o'clock every day. So it was really easy for me to gather all that information and put it all on the board and move each other's sailboats every day. And the reps were very encouraged. And now I know why. Now that we're studying gamification, we're getting more into gamification. You've got the pure competition here. You've got the frequent updates and feedbacks on how you're doing as your boat moves around the islands. And the the contest, by the way, was the top two people that made it around the island. First actually got to go on a trip down to San Diego for the America's Cup. So I think the things I did right on that incentive was the frequent feedback. You know, frequent feedback and updates during the incentive period is something that we've studied with sales reps. And they've told us, you know, you can have a great kick off, you can have a great carrot or prize at the end. But if there aren't frequent updates, then it's somewhat disincentivizing to stick with it over a period of four, six or even eight or 10 weeks long if you don't know where you're at. So that's. The one taken away I'm going to take away from my Steinlager incentive, first incentive I ever did was I did a really good job. I'm not saying I did a good job and everything, but I did a really good job. And the frequent updates design of that incentive and I really didn't know any other way to do it. It's just what made sense to me. There's a couple other incentive styles that I've learned over the time. And the key really is here to just give you my experience on my mistakes and successes, incentives so that you know how to recognize these or you can provide feedback to your sales managers on what works for you as an incentive or for your team. And there's one particular incentive style I like to call the hype and fall. So the hype and fall is a declining line from up high on your left hand side and it goes down to the lower right hand side. What what I call the hype and fall is an incentive that has just an outstanding launch meeting. But then over time the gas runs out and the energy runs out. So a lot of times incentives suppliers will really focus so much of their energy on the kickoff and they might have a great kickoff party. They might have great music or bring in celebrities and they might throw a bunch of ideas around. But then sometimes in the hype and fall model, what happens is you walk out of that sales meeting and you're so fired up for this great incentive. But then over time, you've got a lack of tools to help you be successful or you've got very poor tracking or infrequent updates. Right. Which we also call the feedback circle. Right. You want to give participants feedback on how they're doing from themselves and compared to their peers and compared to the ultimate goal. So that feedback loop and tracking is always important. Sometimes the hype and fall doesn't have that as well as science. The hype and fall has a delayed payment. So I've seen suppliers before that have done incentive trips in the summertime, but they've delayed the trip well into the fourth quarter simply because they can't afford to have all the sales reps gone during the summer. And while that's a very reasonable model parameter, right? I mean, it makes sense. You can't lose all your sales reps during summer. It also kind of creates a hype and false sometimes because you get really excited about the trip. And then sometimes the trip is 10 to 12 weeks later. Sometimes sales rep that earned the trip doesn't even work there anymore. Or you've moved roots or you've actually just thought about that trip for so many darn weeks in a row that it just doesn't have the hype that it does. Another model of incentive that I've experienced and been successful with is called what I would call the delayed experience. And the delayed experience is where the kick off meeting and the reception of the carrot or the award. Right. The trip, the prize, whatever it is, the reception of that by the sales team. When you provide that kickoff meeting is fairly flat, meaning that not everybody is getting all excited about it. You know, you as a supplier or sales manager, maybe you've gone up there and you've kicked off this incentive and you think it's great, but it just falls flat on the sales reps. And then they experience the incentive period goes on. They experience the reward, whether that reward may be and it blows their minds and it's better than they ever imagined. And I call it the delayed experience because the graph of happiness kind of like slowly goes up. It stays flat for a while. Then it kind of goes straight up to the right at the end because people are like, wow, that was so cool. And I'll give you a good example. I did this one time and this is what I call the echo shoe incentive. I've told the story a lot. So you may have already heard it, but I was on a crew drive one time in Oakland, California with my distributor and it was about the third or fourth day in a row during a key, key holiday week where we had been on the grocery store floor stacking beer and stealing space from our competitor. And I turned to the sales manager that I was with and I said, man, my feet are killing me. I mean, my feet are killing me on these hard floors. And he just looked at me. He goes, Well, you're the boss. You know, I was a general manager at the time for me because he said, you're the boss. Why did you run a shoe incentive? And we just kind of joked about it. We got in the car and we talked about it. We Googled some things. This is probably about 2009, 2010. And by the end of the route, you know, just because we want to talk about it, we had decided that we will. First of all, we acknowledged that the shoes I was wearing were probably $49, $59 dress shoes. Right. They weren't the most expensive dress shoes. And you know, frankly, at that point in time in my life, I don't think I'd ever spent maybe more than $75 on a pair of dress shoes. I bought them for looks rather than for for feel because I didn't wear them that often and I certainly wasn't accustomed doing crew drives in them. But we did some research online and asked a few people. We found this company called ECCO, E-C-C-O and ECCO Shoes. At the time, we're said to be some of the most comfortable shoes for working people and they had all different kinds, including these dress shoes. So we looked these up and we came up with an idea that all of our distributors for this particular. Geography. There are about six distributors. And if collectively, if they hit a Nielsen share growth number on dollar share and volume share, then every sales rep and every manager in every distributorship. And it was either all or none that they were all going to get a $250 gift card for ECCO shoes. Now, to kick this off, I ordered about 12 or 15 pairs of ECCO shoes from the ECCO shoe company, had them shipped in. And I went around and I did sales kickoff meetings at each distributorship. And as you can imagine, this fell flat. It was it was not well received, let's put it that way. Here's Tracy Neal stand in from of the sales team. And I have traditionally taken people to Vegas and bought them large screen TV's and done all kinds of great stuff that was within the parameters of the incentives we used to run. And here I am standing up there with 12 pairs of ECCO shoes. And I'm telling you, these sales reps. Hey, if we hit this big goal for a key holiday period, everybody gets a $250 pair of shoes. Now, the reason it fell flat is I think at first I think a couple of people thought it was a bit self-serving because they'd heard the story of my $59 shoes. But secondly, this this crowd, I mean, this this demographic of sales reps around 2010, frankly, I don't think they'd ever spent more than $75 on a pair of shoes to add. But they didn't see it as a problem. It wasn't really. Nobody's really excited to say to $150, I'd rather have two and fifty dollars cash than a pair of shoes that was worth $250. So here's what happened. We hit the goals and everybody got the gift cards. And slowly sales reps started to convert their gift cards and buy shoes. And my phone started ringing off the hook and I, too, got a pair of shoes. And it became a very big discussion point where in just a matter of weeks after people had received their shoes, sales managers come back to me saying, hey, I looked at the ECCO website and I love my my my dress shoes. I've got a pair of black. Let's do it again. I want to get a pair of brown, you know, and the aha. There is that they love these ECCO shoes, you know, for people who still spent their whole lives their whole day on hard floors, walking around, working their butts off at retail, it never really dawned on too many people to own a $250 pair of shoes. But at the end of this incentive, they were so happy. We actually ran this incentive for four holiday periods in a row. And it got to the point where most sales reps were getting a black pair, a brown pair, and then some were looking in there and saying, hey, they've got these, you know, two or three hundred dollar hiking boots, you know, in in again in 2010. The demographic of the sales reps that I'm working with, nobody's buying two or three hundred are hiking boots. But what a great opportunity to get it. Two or three hundred dollar pair hiking boots. It's going to last your whole life through this incentive. And some even on the third or fourth try somewhere buying very expensive shoes, boots and an active gear from ECCO for the family members and spouses. So I would call that the delayed experience. It was really cool. And it's one of my favorite stories. And in fact, when I see sales managers in the San Francisco Bay area today, I'll call one out because I just saw him at a conference a couple months ago, Rick leader and I told her Guido is telling somebody that ECCO shoes and look down at issues. He goes, you see these shoes? He goes, this isn't the exact pair of ECCO. He goes, but I've never bought anything but ECCO shoes since. So thank you very much, Rick. And everybody likes her ECCO shoes. Another example of an incentive that I did that got a lot of hype and I would also call it a delayed experience was the distant Disneyland gift cards. So one summer I was out doing work was actually it was probably spring, early spring I was out doing work with and I was with the sales manager from two or three different distributors over the course of two or three weeks. And somewhere in the small talk, in the car or in the stores we're in, start talking about what we're doing with our families for the weekend or for the summer. And three, I think, was three out of four or three out of five, maybe three out of six sales manager all told me that they had these big Disneyland trips planned with their family. They were all going to Disneyland. And it was a big deal. And they had talked about the planning that went into it. The hotels and the tickets and all that kind of stuff. And so I saw that as an opportunity to help these guys out and find something that motivated them, because I'd been in the industry at this point in time, 15, 18 years, and we'd all done trips to Vegas, we'd done fishing trips. We didn't golfing trips. You need to find something new that motivates your sales team. And I didn't know if this would motivate the sales reps, but I knew it would motivate the sales managers because I already knew they were going to Disneyland. So what we did was a gamification board and we made it like Plinko. We actually went out in my field marketing manager Jennifer Glasgow. We created a Plinko board from the prices, right. And we allowed sales reps. It sales means to punch a hole in the Plinko board and pull out a gift card. There were different gift cards of varying dollar amounts and there are, you know, anywhere from $25. I think our largest was $500. And this is right about when gift cards first came out. So everybody was big on gift cards and was excited about him and Disney had just released their gift cards. The interesting thing about this also is I would say that the announcement and the launch of this was very flat. You know, again, I had a reputation for doing great parties, for taking people to Vegas, for doing really fun things. And here I am standing up saying, if you help grow our brands and hit these sheer numbers and hit these volume numbers, then we're going to give you something that an eight year old boy or girl would jump up and down for. And frankly, we had you know, there's there's a large part of the population of sales reps at that point in time that weren't married and didn't have kids. And for quite a few of them, it fell kind of flat. And they're like, what, these gift cards, what you know, what are we to do with Disneyland gift cards? But I will say that again, this is one of those ones where after they experience the Disneyland gift cards and after they received the the money in the form of the gift cards, I can't tell you how many great e-mails and phone calls I had from sales reps and sales managers all over my territory. You know, there was one one in particular, one gentleman. And I won't say his name, but he he called me and he said, I won't let you know. My family had the vacation of a lifetime. We've been to Disneyland many times before, but this time we stayed at the new Ahwahnee Hotel at California Adventure. It was out of our price range. But you know what? We used your gift cards. We splurged. And it was so nice to be right there between the two parks. And my family had a blast and we had a blast and we were able to afford the the $23 cheeseburgers and everything that was in the park. And the nice thing is I had similar phone calls and emails from people exactly like that gentleman that went on for almost two or three years. You know, it wasn't just like the five or six weeks after. And again, that's why I'm calling this a delayed experience, because the launch and the announcement of the Disneyland gift cards was not that great. But when they experience the Disneyland gift cards and they applied it and they went and did it, they remembered, hey, that was from this supplier and this manager that set up this incentive. And I appreciate that. And so one thing I'll say about delayed, delayed incentive experiences. You don't want to plan an incentive launch to be flat. Right. I mean, you want do the best you can and make it hyped and excited and everything like that. But if you ever run an incentive that has a delayed, experienced reaction. The one thing I would recommend that I've learned from that is do that same incentive again immediately because your second launch will not fall flat. Right. Once they've experienced it and they realize, wow, this was really cool, then the second time you launch it, the hype will be even that much higher. You'll pick up right off where we left off from the hype of the experience. And so that's always a really good time to tell a couple more stories on great incentives that I did. And I remember over my time period I did another one called the camera here, what we call I think we call it the you know, I'm never gonna say because I don't remember. But here, here's how it worked. It was in the San Francisco Bay area. And at the time there was there were other suppliers. I was with MillerCoors and there were other suppliers who were doing incentives. And frankly, they had bigger budgets than I did in my own distributorship. So I think Heineken USA at the time was doing really good incentives. Constellation was doing really good incentives. And a couple of the Kraft brands were actually doing really good incentives. And this particular year, for whatever reason, I did not have a very large budget to do just a blow out incentive. And I knew it. I knew it. I had talked to the sales managers that distributorships, and they kind of said, you know, we're doing this grandiose thing with Heineken. We're doing this grandiose thing with the guys from Corona. What are you going to do for your incentive? And I just said, you know what? I can't match that. I can't go. I can't go high end like that. We don't have the budget. I can't allow them and do everything first class. But I said I don't think we need to because I don't think our sales reps match that demographic of doing some of the things that you're describing in a first class fashion. I think that the guys and gals that we have that sell beer in this territory are just good old fashion down-home people who like to have fun and instead of going first class, we're gonna go straight blue collar and have an awesome incentive. That's not about how much money we spent, but about what we do. And so here's what we did. Instead of getting a hotel in San Francisco, first of all, there are about 7 distributors surrounding the San Francisco Bay area. And this incentive was for all of them. We were going to bring them. The incentive was gonna be a trip where they all got to come to San Francisco and do a big party for a weekend. But rather than getting the Grand Hyatt in downtown San Francisco, that costs a whole lot of money. We went to the marina district and we picked out a motel as a motel with a capital M, right. That's the kind that's like it's two stories, right? All the entrances are outside on a balcony and. It's basically like a Motel 6. And yes, they do have several of these in the marina district of San Francisco. But we took a motel and I think the average night there was fifty nine dollars or something like that. We had double occupancy, Heitor by double up. And in the parking lot of the motel, we brought in a bunch of picnic tables that we covered with butcher paper. And we brought in some mini mini I got a mini truck like a little Toyota S10 or shabbiest 10, whatever. You know, not big trucks, but we brought in some pickup trucks and we filled the back of the pickup trucks with ice and 40 ounce and 40 ounce beers and twenty four ounce cans of our product. And Dungeness crab. And so the party in the parking lot at the motel was eating crab at the picnic tables, getting your own crab out of the back of a pickup, sitting at a picnic table and drinking 40s and big cans while we ate crab. Right after that, instead of taking a limo to areas as the other suppliers had done, we walked down to the wharf and got on a boat. And we took this boat around the around the horn in San Francisco from the Fisherman's Wharf area. And it dropped us off right at the San Francisco Giants Stadium where we went to a Giants game. And that was on Saturday night. And then after that Sunday morning, we loaded a Greyhound bus and went across the bay and everyone went to a Raiders game. So, again, the model there was it didn't have the money to do the Grand Hyatt. I didn't have the money to do the limos. Didn't have the money to. And I don't know why I didn't have the money. A lot of times we spent a lot of money on incentives. But this particular summer, I don't recall why. But we spent money on other things, so we didn't have the big budgets. And that's OK. You know, we did a low budget incentive. Everyone enjoyed it. They had a blast. They were bragging and telling all the stories of eating. You know, just tons and tons of crab eaten on picnic tables staying at the motel. You know, after these other suppliers and take them to the best hotels in San Francisco, we own a motel. And it was like just a big party in that parking lot. So my take away from the San Francisco blue collar weekend was that you didn't always need a lot of money to make a great impact on a sales incentive. As I said, this is the case where I didn't have a lot of money. I really just put my ear to the ground and talk to sales reps and said, what do you want to do? Well, you know, what's what's a good party to you? And I think it was one of the sales reps out of San Jose. They came up with this idea. So let's just go eat some crab and have fun and and just have a really good time together. And it's really about enjoying each other's company. You know, every time I talk to people in this industry, I always say, what's the best part of the synergy? They see the people. Well, if it's the people, then you don't need the diamond studded limo. I mean, it doesn't hurt who doesn't want to get a diamond studded limo. But sometimes it's just about making environment where sales reps can connect and enjoy each other and celebrate, too. You know, I mean, we all work really hard out there. And, you know, one things I say in episode triple 0 is that the camaraderie and the teamwork and the competitive, peermanship that's in this industry is the greatest. But oftentimes it's really lonely when you go out on your route all day, everyday. So it's nice to come back together as a team. It's nice to high five. It's nice to talk a little trash sometimes and tell somebody that you beat them at one particular thing or the other.And again, my big takeaway for the San Francisco Blue Collar weekend, maybe that's what we call it, would be, you know, get creative and focus on the experience and interaction of who you're going to have there, spend quality time together celebrating each other. And that will make for a great incentive trip. So there's a couple of examples, I'm sure I have hundreds of more incentives, and I'm sure as soon as this goes live, my distributors call me nothing with good ideas, but they'll probably call me and say, hey, you forgot about this one that you screwed up and you forgot about this one that you screwed up and you forgot about this one that you screwed up. I admit now there are plenty of those out there. So bring on your phone calls and maybe we'll do a version, too, of incentives here to tell more stories. But before I wrap up incentives on talk about kind of the the framework of an incentive, I spent a lot of time thinking about this. I really enjoy incentives. I think if if I ever got to the point where I was going to go study a particular topic in graduate school or something like that, I think it would probably be, you know, under the topic of variable compensation would be the fancy college word. But really, it would be incentives. Right. And the whole thing about an incentive is an incentive is is a carrot versus a stick. Right. And if you've not heard of the carrot versus the stick model, you know, it's the idea of making a horse do something right. And there's one way to make a horse do something, and that is to hold a carrot out in front of their face and they go towards it. Right. The other way to get the horse to move forward is to hit it with a stick. And that metaphor is often used, the carrot and the stick. When we're talking about people and in sales organizations and motivating people to change their behavior, you know, the stick represents fear, motivation. Right. And the carrot represents an aspirational attainment of something. And, you know, when you think about an incentive, whether it's points, you know, when you award points, you're doing it. So everybody gets points. But only the few with the highest points get the reward. But also with points, you've got that peer to peer competition that brings around or when you're doing it with an award, you can have a scaling award. Like sometimes they do it where it's a dollar a case or, you know, 50 cents a case, whatever it is, that's a scaling award because that way everybody makes money from the beginning. Or maybe there's a threshold sabater makes money and they can make more money. You could scale it based on your own performance. Right. And then there's like the super goal at the end. That's that's an incentive model where maybe you don't earn anything until you hit this goal and then you earn everything. Right. So I'm really intrigued by that model and all those models. I love studying how to make behavioral change and how to provide sales reps with the tools they need to do really good incentives. And so I've spent some time thinking about the different parts of incentives. I know it can break this down into like micro parts. But here my five macro parts in medicine. Right. So they are the launch, the parameters, the tools, the updates and the payout. I'll say it one more time launch. Parameters. Tools update and pay up and to describe all five. So the launch is really the announcement, right? Whether this is done on email or maybe you make a video or you do it in a sales meeting or whatever. There's the launch. Right. And this is the announcement. This is where you get a little bit of hype. You get communication. You get all the details. You get the expected reward. But planning the launch of an incentive, I would say most suppliers are really good at planning the launch of the incentive because it's something we focus on. And because we get immediate feedback on our success of the launch, you can see it in a sales team's face. If you're doing well on the launch, you'll see it in their excitement. You'll see it in their attitude. You'll see it in the noise, the room. And because the launch provides such immediate feedback. Sometimes suppliers do really good launches. They get great feedback and then they think they have a great incentive. But there's four other parts to make this incentive great. So focusing on launch is important, but it's not everything. The next one would be parameters, right? The parameters are the rules, right? So think about this like monopoly. Right? In Monopoly, the rules are that I roll the dice and then I move my peg seven or eight times and I land somewhere and I have the chance to buy the property or not buy the property. And if I buy the property and you land on the property, you owe me money. Those are the rules, right? So the parameters are the same thing in an incentive that are what are the rules? What are you being asked to do? Right. If you're being asked to sell Brand X and you sell brand Y, then that's outside the rules. And then the rules have rewards and sometimes even consequences, too. And competition. So communicating the parameters is really important. And the best way to communicate parameters is written because this is almost like a it's almost like a constitution. Right. The worst thing you could have an incentive is changing parameters. If you tell a sales organization that the rules are this way and then halfway through you change the rules, you've lost credibility and no one's going to participate in your Senate. Just like if you change the rules in Monopoly in the middle of the game, it doesn't work. So anytime there are parameters, the rules, they may be delivered verbally. They may be delivered by video. But at some point in time before the incentive period starts, which is also a parameter, right. The time period, they have to be written on paper and they have to be provided to everyone and they have to be agreed upon that they're not going to change. So those are the parameters. So far, we're two out of five launch end parameters. Okay. Part number three of the incentive would I would call the most understated section of an incentive that people don't spend a lot of time on and that are the tools. Right. So what are the tools that are going to be provided to the sales reps for this behavioral change? And I'll give an example. I could have six sales reps outside right now in the back of the office here. And I could say, all right, everybody gets $50,000. If we dig a 10 foot hole. Right. And that may sound really exciting. And I mean, who wouldn't want $50000 to build a 10 foot 10, a 10 foot hole? But at the end of the day, if I don't give anyone shovels or at least a spoon or maybe a backhoe or something. The incentive is just so daunting. The goal has so much stretch to it. Then again, I'm disincentivized to go for that. So that's also something to keep in mind as you're participating incentives and looking incentives, especially if your sales about that raise your hand. What tools are we going to be given to hit these goals? Right. It's one thing for a supplier to get up there and say we want you to be up 7 percent this summer. And if anyone does that ever is going to go to Vegas, we're gonna have a big party. Right? This can be great. But if there are no tools to help us and that 7% seems unrealistic, then the reality of it happening is not going to be very strong and people are going to lose momentum and lose energy on it. Within the first 24 to 48 hours of walking out of what potentially was an outstanding launch event. So as a supplier, if you suppliers out there, you have to have tools. You have to explain to the sales team what tools you're going to give them. The tools may be direct tools like your sell sheets. Here are some chach elements for on premise, right. But they may be overhead tools like air cover, like we'll hear six million dollars with the advertising that's going to go on this network, this network and YouTube and Twitter to support you. Or here's a sponsorship with this sports organization that's very popular. And the average resident's gonna get exposed to this brand sixteen thousand times over the next 30 days. That's going to help you. All of those are tools, whether it's air cover or direct tools, to help them sell a particular brand to change their behavior and be more successful than they've been in the past with an initiative. The tools are really important. I really encourage sales reps. Raise your hand and say what tools are we being provided to hit these goals? Because that's always important. So that's three. Launch is number one parameters. Number two, tools is number three. Number four is updates. Updates represents the. Feedback communication cycle that happens when the incentive is live. So this particular part of the incentive number for updates happens and it only happens from the time the incentive starts to the time the incentive ends. It's only applicable when the incentive is live and updates as a means of providing feedback for how individuals are doing towards the goal. Right. And it's best if you can compare them to their peers, because if I say, hey, great job, Kevin, you're at sixty one thousand points. That sounds good. But if the leaders at six hundred and forty thousand point, you're really behind. So providing it within a peer environment. Right. Gives them some some ability to understand the weightedness of it and whether it's really good or really bad. So providing an update and a communication, a feedback loop is really important for sales managers out there GMs as well as suppliers. When you're planning your incentives, make sure you talk about this. Make sure you say what's going to be our feedback loop? How are we going to provide updates to the sales reps on how they're doing on this incentive? What's the frequency of the updates? What's the method of the updates? So we're gonna do it verbally. Are we gonna send out voice mails or we new emails? We have put it on Twitter, whatever. Are we gonna have a board in the sales room? If you have a big board at the sales room, as I did with my first incentive in 1995. That's really great if everybody comes in the sales room at the end of the day. But nowadays in 2019, if not every sales rep comes to the sales room every day or much less in some parts of the country every week than putting a board up in the sales room. Maybe not the most effective way to communicate those updates. So again, number four is updated, the feedback cycle of letting sales reps know how they're doing on the parameters within the rules towards the goal. So we're through for now. Number one is launch. Number two is parameters. Number three is Tool's number for updates. I keep repeating these, so you lock them in your head. Number five is payout okey. Now, the most important thing about payout number one, speed, right? Speed is more important than accuracy here. Accuracy is number two, but speed is first. Sometimes distributors and suppliers put accuracy at number one and the payout can take four, six, seven, eight weeks. And we've done studies. We actually have some documentation with a very large wine and spirits distributor where they looked at sales reps and they asked them, what's one of the things that demotivate you on an incentive? And their answer, number one answer was the delay of the payout. In fact, if you delay the payout over time in sales, reps begin to realize that your payout is so delayed, it will actually hurt your launch, your parameters and your objectives. And you will have sales reps unmotivated to participate in your incentives because the payout is so delayed. So number one, the payout is speed. Number two, on payout is accuracy. And again, I'm not saying accuracy is not important, but I don't like the idea of having accuracy number one and speed number 2, because that means you're slow and perfect, right? I'd rather be fast and 98 percent right in this particular situation because sales reps want to know. Right. The third most important thing about payout is the ability for a sales rep to understand how you got to that number. So for lack of a better word, I'm gonna call this audit. You know, audits not necessarily the most positive word. And I'm not suggesting that there is an audit conducted. But from a sales rep perspective, if we have a sales rep named Kevin and we've been working for the last eight or nine weeks on this incentive, he was at the launch meeting. He was excited. He went out and he worked his tail off. He was involved in using all the tools. He did all the updates and he regularly checked in on the updates, knowing where he was. He worked really hard to become number two in the company and this particular thing. And we give him pay out. We say, here you go, Kevin, you've earned $987. And then we just walk away and we don't have the detail there. The audit information that shows him. How did you get to $987? Because let's be honest about it. Kevin is going to question that number, whether it's $900 or four $400 or $1,900. He wants to make sure he's worked really hard. He's made it front of mind for the last 10 weeks. He's put an extra effort to make sure that he's staying within the rules. He's engaged himself with the updates to make sure he knows where he stands. And when you hand him a number that says he's going to be paid out, whether it's points because he's going on a trip somewhere or whether it's dollars, he wants the ability to audit it and say, you know what, you guys did a good job. Everything that I think I did. You've accounted for all my points and all my dollars and here. He also wants the ability to say, you know what, you guys have missed four things and I've got documentation here to prove it. My points are my dollar should be a little bit higher. So that's payout speed. Accuracy. An audit on payout of the most important things. So here are the five things again. Launch number one. Number two parameters. Number three, tools. Number four, updates. Number five, payout. By the way, if you like this conversation, send me an email or hit me up on Twitter or Facebook or something like that where iSellBeer Nation. I really toyed around with the idea of writing a book on this or maybe even an interactive workbook/journal for sales managers and gems around the industry. I'm really passionate about this is something that I felt like I excelled in in my supplier years. I did excel in it while I made mistakes and I'd say I was perfect at it, but I thought I did a really good job at this. My distributors told me I didn't really got good job this and I loved the psychological study of variable compensation. So everyone out there, let's build better incentives. And again, the incentives aren't for the incentives sake. The incentives are so that we all sell more beer. Right. The incentives are to change and improve behavior towards selling more beer. Having a little fun. You know, that's the best part about this industry increasing execution, you know, growing a little bit in the camaraderie and promoting just a more fun, better culture to work in. So this has been your first power talk on incentives. I hope it went well. Send me feedback. My email is tracy@isellbeer.com or you can send me a direct message. Don't forget to join our Facebook nation. It's iSellBeer Nation at Facebook as well as Twitter, iSellBeer Nation. And also, again, we're still recruiting for millennials. I've interviewed a couple of millennials to find out which ones I'd like to get here as sales rep X and sales up Y and sales rep Z. So if your millennial sales were about their contact me, we've got to get some interviews done. So what's the best tasting beer in America? Who cares? That's for the consumer to decide. And until they do, you will keep selling them new brands every day as the distributors sales rep. You can become a part of the iSellBeer Nation by subscribing to this podcast and using the #iSellBeer in all your social posts. Also, be sure to join the iSellBeer Nation Facebook Group and visit our website. Our industry is an up and down the street business where local relationships matter. I want to thank you for making me a part of your day and wish you good luck on the objectives for your next account call. In fact, I know you're gonna crush it.

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