Most companies have a budget for the award/trip and it is based on an expected number of participants. Some manage it directly via stack-ranking to ensure the number of attendees is exactly as planned. Others set the bar for performance to qualify and then however many qualify, that’s the number. Some even take a “funding” approach in which they flex the number who may attend based on the aggregate results of the sales team (e.g., at goal 5% attend, and for every 1% over goal another 1% of the sales team may attend). But probably the most motivating answer is one in which the sales person knows going into the year what performance will be required to qualify.
The first step is to identify your goals
Reasonable goals might include:
- Motivate top sales people to push for even better performance
- Retain top sales talent
- Provide networking and influence opportunities for top sales people to spend time with business leadership
- Provide professional development to top talent in sales
- Hold up exemplary performance to inspire and motivate the whole sales team to better selling
How many you include will depend on what you’re trying to accomplish
If your focus is on motivating, training, or retaining the best of the best, then you would include a small percent of your sales people. If your intention is to motivate and develop your most promising sales employees, then you might plan to include a larger portion of the sales force. There is a lot of variability in goals and practice in structuring a President’s Club award program. 25% of all sales people participating would be on the high side of what I’ve seen – 7% – 20% is more typical. But this should be guided by your intentions rather than by what everyone else is doing. Some examples:
- If your plans offer limited acceleration for over-goal performance, and you include substantial training and networking in your PC event, you may want to dip deeper into the organization (even everyone at or over goal could be included) to make the award help drive goal attainment, and make sure you are providing training and development to your highest potential sales people.
- If you recognize the top performing region every quarter with a splashy announcement, a fabulous dinner, and a cash award (~$1k grossed up each) AND you offer substantial incentives for over-goal attainment in the form of a binary bonus or significant accelerators, then you may want to make your PC more exclusive, top 5% or so only – maybe only those who hit a level of attainment above goal (e.g., 125% of goal or better).
These are just a couple of scenarios to illustrate. The idea here is that you need to design your President’s Club in the context of the whole reward system, the prominence and ability to measure true contribution of the sales people, etc. And while it’s totally appropriate to have goals about what percent of the sales force participates, it’s probably not a great idea to design the cutoff as “top xx%” – you don’t want one person to be able to win only if another loses. You want them competing with the goal, not each other.
A blended approach to reward high attainment AND great sales behaviors
Another approach that can be very effective is to set two numbers: a high number which guarantees President’s Club attendance (e.g., Excellence for your primary quota, so 150% for many direct sellers), and a lower number that qualifies a sales person for consideration for one of several discretionary slots (e.g., half-way to excellence, so 125% for many direct sellers). Then the sales leadership team picks from the qualified pool to fill the discretionary slots based entirely on exemplary selling behaviors. While this requires work from the sales leadership team, it incentivizes both outstanding results and getting there the right way.
Launching a President’s Club for the first time? Here are the key steps…
- Identify program goals (what do you want to motivate/reward, and how does that differ from what you are supporting with other parts of your total rewards offering)
- Establish criteria for the winners (who will you include, what percent of your sales team, what will the specific criteria be – this is the primary topic of that article on the web site)
- Decide specifically what the award will be (options include a combination of: trip, compensation, training, recognition, special medallion on the business card, special lapel pin, participation in an advisory board within the company, etc.)
- Check the cost of the program against budget and expected value to the business, tune as needed
- Prepare the communication materials to announce the program so that it is exciting, motivates the right behaviors/results, and is easy to understand
- Track progress against criteria established in step 2, and provide regular reports leading up to final selection
- Assess sales people against the criteria and select winners
- Announce winners, and tell their stories to further educate and motivate those who didn’t yet win
- Prepare to deliver the award (trip, training, etc.)
- Deliver the award
- Assess the success of the program against goals established in step 1, adjust as needed and prepare for the coming year.
Donya Rose, CSCP, is Managing Principal of The Cygnal Group. She is a recognized expert in sales compensation plan design, regularly speaking at conferences and writing published articles. She serves clients from F500 to growth-stage businesses, and advises WorldatWork on sales compensation hot topics and best practices.