The first arcade game was installed in September 1971 at Stanford and cost the equivalent of $114,000. By 1981, when Pac-Man was as ubiquitous as Google is now, annual revenue from arcade games was estimated at the equivalent of $12.52 billion. Home video games entered the fray in 1982, which combined with the quarters being put into arcade games put video game revenue at $30 billion in today’s money. In short, the joy of competition and the allure of the high score drove people to spend a lot of time and money playing video games.
There is an unbelievable amount of research and testing that goes into making games both challenging and rewarding. As a result people spend weeks playing and enjoying the challenges of the game, yet there is no big cash prize at the end of it.
So should we just scrap compensation plans, pay all sales people a base salary and set up a giant leaderboard?
Of course not. The big commission check is the ‘raison d’être’ for taking that sales job in the first place. But clearly it’s not the only important driver. So what can we learn from games and how can we apply game mechanics to the art and science of sales compensation and gamification?
Applying Game Mechanics to Sales Compensation
To try to answer that question, I was joined on a recent webcast by Mark Coleman, Managing Partner, Compensation Analytics LLC. With 20 years of experience administering and managing compensation budgets, Mark had some trusted insight on three potent motivating factors that drive behavior:
Challenge – for long-term engagement, loyalty and job satisfaction, hitting quota should not be a walk in the park. It SHOULD be tough to achieve. Make sure you have a clear view of quota attainment levels for all your individual sales professionals.
Competition – making it to the top spot on a sales leaderboard is great for the person at number one. It’s not so good for those at the bottom, seeing the same two or three people trading places at the top. Instead of relying on revenue or number of deals closed, try leveling the playing field and making the competition about something else. For example:
- Pick goals that anyone can achieve no matter how successful their year is.
- Award points for keeping forecasts up to date and accurate, for spending time training, preparing for meetings, sending out quotes in a timely manner and updating account plans.
Recognition – the commission check is great when the deal closes and a short moment in the spotlight is extremely satisfying and inspiring. Games do this well by providing the instant recognition and feedback that keeps you hooked. For sales this could be anything from an email from senior management to the more social concept of badges, awarded for small things such as training certifications and not just the big one – deal closure.
Emperor’s New Clothes or the New Black?
There is a lot of spotlight on gamification at the moment and it’s easy to write it off as the latest buzz word or a concept only applicable to younger generations. In reality, gamification is a serious concept recognized by leading analysts including Gartner Research in its special report Gamification: Engagement Strategies for Business and IT and Aberdeen in Sales Effectiveness 2013 – The Rise of #Gamification. While sales clearly isn’t a game, it can benefit from applying some of the game principles discussed above, no matter the level of maturity of your sales team. Gamification as a strategic incentive program will power up the effectiveness of your traditional cash-only program.
If you’re interested in learning more about sales gamification, you can catch the webcast replay of Motivating Sales with Compensation and Gamification – no coins required! Or learn more about solutions for sales compensation and gamification.
Have you implemented game mechanics into your overall sales motivation and compensation plans? If so tweet us your comments at @CallidusCloud.