Pamela Dittmer McKuen is a Chicago-based freelance writer who specializes in homes, lifestyle, and travel. Read her work at AlltheWritePlaces.com
Do Sales Awards Matter?
Sales contests can alienate team members even when your goal is to boost morale.
March 1, 2010
One of Linda M. Lukas' most treasured possessions is a brass eagle that stands nearly a foot tall. The figurine, displayed prominently on her dining room hutch, is a top producer award she earned in the early 1980s from the now-closed Lincoln Realty in Orange, Calif.
"It's not that I needed more dust catchers, but there's status in receiving it," Lukas says. "Everybody sees you walk up and get that eagle at the sales meeting."
In 2002 Lukas opened her own brokerage, Lukas Properties, also in Orange. As the sole proprietor, she doesn't have a need for sales contests anymore. But she still recalls how much excitement they would create in the office.
"It was the most fun I had in my life," she says. "You'd have an idea of who would win because the sales board was up, but there were people who would sandbag deals at the last minute. There was so much camaraderie. We'd pick on each other in a friendly fashion: ‘Oh, no, not you again' or ‘How many deals are in your briefcase today?'"
Competitions have long served to recognize high achievers and inspire others to ramp up production. Specifics vary from brokerage to brokerage, but monthly, quarterly, and annual competitions are common. As for the winnings, inscribed wall plaques are traditional and ubiquitous, although the gamut includes ribbons, dollars, and even diamonds.
As Lukas did earlier in her career, many practitioners thrive in a competitive environment in which they try to outdo themselves and each other.
"I think sales awards are phenomenal as a motivational tool," says Jason Burkholder, ABR®, e-PRO®, who manages Weichert, REALTORS®, Engle & Hambright in Lancaster, Pa. "Our agents love the recognition. It gives them a sense of achievement and purpose, which is important in a business where there's so much rejection."
But not everyone feels the same way about contests. Many managers and salespeople say they can backfire, alienating the majority of the office that does not win. And some are downright emphatic about their disdain for such competitions—and not because they've never stood to win one.
No Awards, Please
Six years ago Vicki Doudera began selling real estate in her coastal hometown of Camden, Maine. One reason she joined Camden Real Estate Co.: Its no-contest policy. She believes such competition breaks down camaraderie more than builds it up.
"Individual recognition is nice," says Doudera, who holds NAR's green designation. "I was REALTOR® of the Year for the Coastal Mountain Council of REALTORS® [part of the Mid-Coast Board of REALTORS® in Palermo, Maine]. But what supersedes that is working together as a team and focusing on your client. I don't think sales contests help your client."
It doesn't do much for sales production, either, Doudera says. Despite Camden Real Estate's relatively small size of 17 practitioners, it consistently ranks among the state's top-performing brokerages in sales volume, according to local MLS data.
Debi Wilson, a 10-year sales veteran who last fall joined ERA Freeman & Associates in Gresham, Ore., makes another point: Awards rarely take into account the full story behind the numbers. She's seen top producers who boost sales figures by buying and selling their own properties, and others who use teams of telemarketers rather than handle marketing on their own.
"One of my associates works with lower-end purchases in the ballpark of $100,000," she says. "She's a huge producer in her niche market. She has more transactions and more happy customers than many of those with huge numbers, but she's not recognized because her dollars are so small."
And then there are salespeople like Mona Ferro of London Properties in Merced, Calif., who have never felt at ease with sales awards as a means for accolades. As a young sales associate in the mid 1980s, she was discouraged when her production was compared to that of the seasoned pros. Later she became a winner, too, but by that time she didn't feel that she needed an award to tell her she was doing a good job—she had plenty of satisfied clients to do that.
"What I want is a bigger part of my hard-earned money," she says. "I can buy my own plaques."
Like Ferro, longtime sales associate Diane Saatchi doesn't like sales contests on a personal level. "I hate any kind of recognition," says Saatchi, a top producer with Corcoran Group in East Hampton, N.Y. "I don't mention my awards on my stationery or in my advertising. I don't want anyone to know how much I sold or how much money I have. I'm a private person."
But as a former broker-owner, she understands that contests can work as a motivational tool. Plaques, crystal, and other gifts are a cost-effective way of rewarding top producers and retaining their loyalty, she acknowledges. Sales associates feel good about themselves and use their accolades as marketing tools, which may impress some clients.
"What you lose is the loyalty of your second-string associates who always feel they are never going to be recognized, and they make up the majority of your office," Saatchi says. "They are your bread and butter."
What About the Economy?
Broker-owner Annmarie Jonah, CRB®, SRES®, of Annmarie Jonah, REALTORS®, in Lynn, Mass., says she'd like to reward her hard-working sales force in some way but simply can't afford it.
The company's market area, 10 miles north of Boston, has been badly hurt by foreclosures, short sales, and drastic drops in home values. The office's transaction sides are holding up, but dollars are way down.
"I know how much time they're spending on short sales, addressing appraisals that come in unfairly low, and bringing the bad news to sellers whose equity has vanished," she says of her brokerage's 17 sales associates.
But at the same time, "I can't afford to do anything extra," Jonah says. "The best I can do to keep morale up is by not taking away the things they need. I'm trying to maintain the split and the support services I provide."
Even if she had the money for a contest, she'd think twice before launching one right now. "Comparing the numbers to those from beefier years is demoralizing to everyone," she says.
However, the rough economy is the very reason that other brokers are starting contests. Broker-owner LuAnn Lavine wasn't thinking about holding sales competitions when she opened RE/MAX Hometown Advantage in Geneseo, Ill., three years ago. But in the fall of 2009, a few of her sales associates were looking at their fourth-quarter projections and weren't happy with the declining numbers.
One of them suggested a friendly competition to spur activity before the year's end, and Lavine agreed.
She divided the 10 associates into two teams, and each week she awarded points for productive activities such as getting an expired listing, turning FSBOs into clients, and making a sale. The winning team earned a ride in the RE/MAX corporate hot-air balloon in the spring.
"They were very enthusiastic, and there was a lot of sharing of ideas about what works and what doesn't," says Lavine. "Holding a whip over them and saying they had to get their numbers up wasn't going to do it. This came from them."
Find the Prize That Fits
The most effective contests are tailored to the personalities of individuals who make up your sales force, says motivational speaker and real estate industry consultant Manuel Diotte of San Antonio, Texas. Diotte, who obtained his real estate license in 1987 while he was in high school, became an award-winning seller and owned a brokerage for three years. He frequently keynotes on the subjects of sales, leadership, teamwork, and service.
"The challenge is that not everyone is motivated by the same thing," he says.
For example, extroverts and introverts can both excel at sales, but each group is driven differently. Extroverts tend to enjoy applause and plaques on the wall. Introverts take pleasure in process and perfection; it's enough to be recognized by their superiors—they don't need the spotlight.
Diotte says owners and managers today have more than introverts and extroverts to worry about. They've also got as many as four generations of people working for them, each with its own motivators and responses.
Rather than hold one contest for everyone, he recommends setting goals for each sales associate and setting rewards based on what most motivates that person. One associate's carrot is cash and another's is a spa day, while someone else might yearn for an iPhone.
"Most people are motivated by a handful of things: money, fun, relationships, or stability," he says. "It usually boils down to one of those umbrellas. If you can match the reward with the personality, you'll get the best results."
The best sales contests aren't one-size-fits-all. To create the best rewards for your sales associates, consider some of these tactics.
Choose a theme. Last summer Gretchen Pearson, CRB®, who owns three Windermere Welcome Home brokerages in the San Francisco-East Bay area, designed a three-month contest around Seth Godin's book, Purple Cow: Transform Your Business by Being Remarkable (Portfolio Hardcover, 2003). "I'm a human resource manager," Pearson says. "If I can go in and extract human potential from my asset—my sales force—I'm going to win at the end of the day."
She called the contest "Moola Madness" and handed out pretend money when associates made sales, showed properties, opened escrows, attended sales meetings on time and performed other tasks. At the end of the competition, associates spent their "moola" at an auction party to buy vacations, iPods, and logo clothing.
"It was fun and motivating," says Gloria Gonzalez from the Windermere San Ramon office. "Rather than sitting around the copier griping about the market, agents were out the door, knocking. It was also a learning tool because you could see what everyone was doing. If an agent was making five calls, the top producer was making 100."
Make learning fun. At Keller Williams Realty Metro South in Birmingham, Ala., contests often are tied to the brokerage's training courses. One course, "Camp 4:4:3," focuses on how to get four listings and make four sales in three months. At the conclusion of a course, a contest challenges recent and former students to practice the methodology for 90 days.
"It forces us to be proactive," says Keller Williams sales associate Marsha Bates, who teams with husband Tommy. "As agents, we can't sit back and wait for business. For people who went to camp six months earlier, it gives us the steps to rejuvenate ourselves."
Don't just focus on sales. In addition to holding big annual competitions, some brokerages find success holding lots of small contests throughout the year. It provides more opportunities to compete, and highlights something other than pure sales volume. Some give credit for volunteer work or public speaking or publishing articles about real estate.
Prudential Network Realty, which has eight branches in the Jacksonville, Fla., area, hosts a competition to recruit new sales associates. The prize: higher commission splits. "We've had exceptional reception," says executive vice president Christy Budnick. "Agents love being involved with who they work with. They're out there working with other agents and they know whether someone will be a good fit."
Jason Burkholder, of Weichert, REALTORS®, Engle & Hambright in Lancaster, Pa., gives awards especially for rookies who have less than two years in real estate. "They need the recognition, especially during these tough times."
Think beyond the wall plaque. Prudential Network Realty gives cash and jewelry, Budnick says. "Most agents already have more plaques than they know what to do with," she says. "We try to do things that are useful while still being visible. Typically, these ladies love diamonds."
But small can be OK, too. At Corcoran Group's Union Square office in Manhattan, associates receive big, flashy ribbons based on their transaction totals each week—a yellow ribbon for breaking $1 million, a purple ribbon for over $4 million. "It's fun and light-hearted," says Ric Swezey, a seven-year Corcoran associate.
Before you launch a contest for your sales force, think about these benefits and drawbacks:
- Increases sales volume.
- Creates anticipation and excitement.
- Inspires greater production.
- Builds camaraderie with others.
- Builds loyalty to the brokerage.
- Can generate unhealthy competition and jealousy.
- Costs money for prizes and celebrations.
- Can be a distraction.
- Takes time to plan and execute.
- Can leave rookies and mid-level producers feeling left out.