Sales managers often swear by the efficacy of using leaderboards. They will tell you how charting sales people on a leaderboard — be it manually or with enterprise gamification, sends numbers through the roof. However, can leaderboards really have such an impact on sales performance?
Granted sales people thrive on competition, however the problem is that leaderboards tend to be misused with disastrous consequences. The good news is that once you’re aware of these epic fails, the damage is reversible and you’ll be less likely to repeat the same mistakes.
So, how do you know if your sales leaderboards are doomed? Simply ask yourself if you’re doing these five major mistakes:
Are you tracking the wrong benchmarks?
You’re about to implement a simple sales leaderboard and figure that the KPIs you should be tracking are … well, sales. In other words, the leaderboard design you chose displays dollar or unit sales per person on the team. Think again. There are two reasons this is a bad idea:
- Firstly, gamification for sales teams should focus on encouraging certain behaviors — making calls, qualifying leads, meeting potential and existing clients etc. The aim is to generate more sales, however tracking actual sales does not motivate behavior. It also doesn’t reveal mistakes that your team might be making, therefore, the chance to correct them and change behaviors flies out the window.
- Secondly, leaderboards can be plain unfair and biased. If your leaderboard displays actual sales, they’re automatically favoring your experienced employees, because those less experienced usually land up with the smaller and less lucrative accounts. They’ll see the injustice and your much touted leaderboards will just fuel their frustration — at best.
Are you endorsing the wrong behaviors?
Leaderboards are essentially part of a game with rules, just like other gamification mechanics. Game rules are always open to deliberate misinterpretation by players who like to win. The unintended consequences are not pretty. Take for example leaderboards that track the percentage of sales forecasts met as the main KPI. Those who’ve achieved the forecast numbers in their sales deals should win. However, this could engender the temptation to cheat — in other words, sales reps may keep sales forecasts low or perhaps underestimate or “doctor” sales opportunities. Why would they do this? To get the first place on the leaderboard every time – without breaking a sweat.
Another potentially noxious outcome from leaderboards is that a rep that was meant to close more deals or help others do so, could easily get carried away in just winning the competition, rather than being motivated by it.
Are you overlooking the middle 60%?
In an article titled “The Dirty Secret of Effective Sales Coaching,” the Harvard Business Review states that sales and service organizations are investing increasing amounts of time and effort in improving managers’ coaching of reps. However, this coaching is basically useless when managers target the wrong reps, which according to the article, they do all the time. Why? Because, sales managers often favor the “tails — the very best and the very worst reps on their team.” They engage with lower performers, because they have goals to meet and they favor their top reps, because it’s more exciting. According to the Review’s research, coaching only “laggards and leaders,” and ignoring the intermediate 60 percent, has no impact on an organization’s bottom line results, since top performers don’t actually improve and bottom performers might simply not be suitable for the job — no matter how world-class the coaching may be. The crux of the matter is that the very 60% of sales reps being ignored demonstrated the highest performance gains when coached.
Leaderboards present the same problem if misused. “Leaders” are just more driven by the intense competition of the leaderboards, which achieves nothing other than reiterating that they are leaders. The “laggards” just become increasingly aggravated and frustrated, so their situation doesn’t improve. However, what about those in the middle? Bottom line, to improve sales results, invest in helping the middle 60% improve and also share the fuzzy feeling of being highlighted by the leaderboard.
Are you boring them to death?
If you leaderboard excludes new recruits or the less competitive among us, it is discriminating. They won’t just miss out on the thrills being rewarded to others, but they’ll feel down right dejected. Since the leaderboard shows the top brass in the team, sometimes others even drop off the list — as if they’re not even worth a mention. Not good and not right! The negative outcome here is boredom and disengagement. Don’t fret, the situation is redeemable — just use more suitable game mechanics that involve more than badges, points and… you guessed it, leaderboards.
Do you want a winning team or a few stars?
The very term a “sales team” implies a group of individuals, be they sales development managers or account managers, who are meant to combine forces or work across product departments. Leaderboards, however focus on the individual. So, if its team spirit and cooperation you’re after, leaderboards can have the opposite effect. Rapid sales scenarios require individualized competition, but if that’s not the case, leaderboards that compare teams and not just stars, help middle players shine through and with their team members.
To leaderboard or not to leaderboard?
If you answered “yes” to even some of the above, you’re probably wondering whether to ditch the whole leaderboard concept altogether with points and badges to boot. Not so fast we say. Leaderboards can be an extremely effective tool to recognize achievement and encourage behavior. Just make sure that they are applied correctly with serious thought to the desired outcomes and behaviors (compare rookies with rookies and small account managers with small account managers), as well as to their structure (opt for teams competing against goals and benchmarks as opposed to going head-to-head with each other). Also, make sure there is no temptation to trick the system. Last, but not least, engage people in a game at which that they can win at least some of the time, especially if they’re in the middle 60%!