Congoleum finds cash works best

Cash bonuses mean a lot to salespeople in hard times.Canadian companies are finding handing out a cheque for a job well done works best to establish a connection between effort and desired behavior.Such is the experience of Congoleum, the Winnipeg-based floor...

Cash bonuses mean a lot to salespeople in hard times.

Canadian companies are finding handing out a cheque for a job well done works best to establish a connection between effort and desired behavior.

Such is the experience of Congoleum, the Winnipeg-based floor coverings maker.

How much

Incentive programs aimed at salespeople touting its brand products in home furnishing centres countrywide measure how much floor covering they sell.

Sales staff typically receive between $1 and $3 for each square foot of product sold to incoming-customers.

For example, the recent Christmas Club program offered $1.50 per square foot of floor covering sold in the weeks leading up to the holiday season.

Such incentive programs generally last between four to eight weeks, and are common throughout the home furnishings industry.

Main aims

Bill Reid, general manager at Congoleum, says lifting sales and profits are the main aims of the company’s incentive programs.

But Reid says improving service to buyers of Congoleum products is close behind.

‘We don’t just offer $2 a square foot and that’s it,’ he says. ‘We also offer information to salespeople about our products’ features, functions and benefits.’

The hope is salespeople more aware of Congoleum will point to them before rival products when serving customers.

Besides cash incentives, retail staff selling Congoleum products can also accumulate points on products sold over a longer period of time.

Points for merchandise

Eventually, they redeem those points for quality merchandise chosen from a catalogue.

Congoleum also has the flexibility to target particular provincial and urban markets, or even specific outlets, with in-store contests.

Pre-determined prizes – from merchandise to weekend getaways for two – are offered to the top three sellers in stores with typically eight or nine retail staff on the payroll.

Having only arm’s-length influence over dealership salespeople makes measuring customer service hard for Congoleum.

One yardstick is tracking customer complaints received at head office and regularly feeding them back to retail outlets.

Distributors

Congoleum incentive programs are typically implemented through the company’s distribution salesforce.

Distributors typically have about 25 accounts each, and fly the Congoleum flag when visiting clients.

An added carrot for distributors is an override on incentive programs on the shop floor.

That means that if salespeople are offered, for example, $1 per square foot of product sold, the distributor will receive five cents extra on all sales punched into the cash register.

In addition, Congoleum mails promotional material directly to salespeople to keep the company’s varied incentive programs top-of-mind.

Reid says Congoleum incentive programs are aimed at top dogs and underdogs alike on sales teams.

‘We are looking for incentive programs, not contests,’ he says. ‘We want everyone to win.’

Congoleum conceives its own incentive programs, and establishes a budget for them. It then contracts out to a merchandise fulfilment house that will implement the program according to budgetary requirements.

Merchandise incentives undergo continuous change so they remain special.

‘We seem to have compact-disced, radioed and televisioned everyone to death in recent years,’ Reid says. ‘It’s becoming increasingly difficult to offer awards that are truly incentives.’

The result is that recognition gifts increasingly reflect personal preferences.

Reid says if a salesperson already has three tvs in his or her house, a fourth will mean little. But if he or she has a 30-foot driveway in Winnipeg, an offer of snow removal equipment would have appeal.

How does Congoleum know it does not spend money on incentive programs to attain targets it would otherwise achieve?

No prior record

Reid says the company cannot be certain boosting salespeople helps hike sales of new products, for example, where no prior track record is available to compare performance.

But he adds incentive programs do help make noise about new products, and make launch promotions appear larger than they are.