How targeted, regional incentives make Top Guns of Compaq resellers. Compaq Computer Corp.'s acquisition spree in the past two years is, in many ways, a plus for the Houston company. But because it's a challenge for the company's resellers, it's also a potential risk.
On the plus side, the acquisition of Digital Equipment Corp. in June 1998 and Tandem Computers a year earlier gave Compaq a more comprehensive line to offer its end users. Resellers, however, are faced with having to learn all the new products. The risk for Compaq is that resellers might be unwilling to put in the substantial time required for training, or that they might feel overwhelmed and prefer to stick with what they know.
"We wanted our resellers to want to be certified to sell the products," says Jill Ballard, Minneapolis-based area reseller sales manager for the four-state North Woods Area. Ballard and her sales team thought an incentive might do the trick.
Fortunately, corporate policy gives area managers, like Ballard, and regional directors--the next level up--the authority to originate incentive programs and to tailor national programs to local markets. Says Kyle Ranson, director, North America, reseller sales, "Whenever we put the framework in place for a national program, we give the regions flexibility to adapt them. Something that works on the West Coast won't necessarily work in New York or in the Southeast. It comes down to what the local culture finds attractive." In addition to the national programs, he says, "We give each team abudget to allow them to address the local market." Area managers present their ideas to regional directors for approval. A regional director who wants a regional incentive might discuss it with his coun- terparts, but isn't required to do so. The five regional directors who report to Ranson have "complete autonomy," he says.
Certainly, there are controls. "I monitor programs on a quarterly basis to see which ones get the best," says Ranson. "If anything's not in line with objectives, I ask the regional director to clarify. The accountability is in the regions."
Ballard reports to Mike Parrottino, director, reseller sales, central region. Says Parrottino, "If Jill thinks she needs an area promotion, she can make that decision."
When Ballard saw the need for an incentive program to boost reseller certification, she brainstormed with her team: reseller sales managers Ruth Ulness, Brent Bair, Mark Nelson, and David Voss, and reseller systems engineer Mark Oppegard. The incentive program they thought up, and which Parrottino approved, was themed "Top Gun," the Tom Cruise flick that, it seems, sales managers everywhere identify with.
"Top Gun was a readiness program," says Ballard. "With the acquisition of Digital and Tandem, we wanted to be sure that resellers understood the full product capability, that they were certified to sell the products and excited about selling them." They chose the theme, she explains, because "the Top Gun is the best of the best, and our reseller community is the best of the best."
Heroic Engineers, Too The incentive ran in the North Woods Area--Minnesota, North Dakota, South Dakota, and Iowa--from Dec. 1, 1998, through Feb. 28. Resellers and their sales staffs in the region were eligible. However, "Not all reseller companies let their employees participate in contests," says Ballard. More on that later.
Contest participants earned points for selling specific products. Depending on the product, $1 in sales was worth one, two, five, or ten points. "The higher-margin products--the enterprise products--had higher point values," says Ballard.
Prizes were awarded at a military-themed party on June 3 in St. Paul. First prize was a Breitling 50th Anniversary Air Force Special Edition watch; second prize, a Mulholland Brothers leather messenger bag; and third prize, a Top Gun bomber jacket. First, second, and third prizes were awarded for Iowa, and a first, second, and third for the Dakotas combined. But there were two each of the first, second, and third prizes for Minnesota, because of market density.
Additional prizes were awarded for "heroic efforts" and "kills." Accredited systems engineers--a designation given to tech support people within Compaq and also within reseller organizations--were eligible to win Top Gun bomber jackets for their heroic efforts contributing to a Compaq win. "Because they're the techs, they're the ones who really influence which way the solution will end up," says Ballard. These winners were chosen, not by sales points, but on the basis of a one-paragraph description of their heroic efforts and the dollar value and strategic nature of the win. Jackets were allocated according to the same formula: one for Iowa, one for the two Dakotas, and two for Minnesota.
Prizes were also given for "kills"--wins against specified competitors. Each reseller account manager who could document such a win in a "Kill Report" was given a Top Gun cap and a gift certificate to take his "crew" to dinner. And at training sessions during the contest, there was a drawing for "flight crew food vouchers" that could be used at a local airplane-themed restaurant.
Why the different types of awards? "We looked at who in the reseller community helped influence sales," says Ballard. "We wanted aspects of the contest to touch the inside sales force and our specialists as well."
Start With a Whoosh The incentive program was launched at the regular monthly briefings held for resellers. Each person was given a closed black cylinder: Having everyone remove the top from the cylinder at the same time produced a whooshing sound suggesting a jet roaring into takeoff. Inside the cylinders were the contest rules. At the briefings, Compaq salespeople modeled the bomber jackets, messenger bags, and watches that would be awarded. Resellers were also told that the program's culminating event would include their significant others. "It's nice to include the people who support them," says Ballard.
Interest was also spurred by the invitation to that final event, a party at the Minnesota Air Guard Museum on the Minnesota Air Guard Base in St. Paul. The invitation was sealed with a sticker rating the contents "Top Secret." Inside were two sets of dog tags with Top Gun and Compaq logos. When recipients picked up the invitation, the metallic sound of the dog tags sliding around inside piqued their curiosity. The invitation told recipients they were "ordered to appear" and gave the schedule for the event in military time: arrival "at 18:30 hrs. sharp," "Military Briefing 19:30-19:15," and so on.
Initially, Ballard had considered renting an airplane hangar for the event. But "the museum has all the wonderful visuals that we didn't have to pay for," she says. Inside, there are artifacts and photos; outside, vintage and modern aircraft. "The ambience existed. The creative part was figuring out how to use it," Ballard says. "You probably couldn't rent a hotel ballroom for what it cost to rent the museum."
Real Air Guards The party invitations included a couple of warnings: "Top Gun dog tags must be worn for security clearance and identification at all times" and "Anyone arriving after the designated time may be subjected to delays by the Top Gun military guards and security team." When people arrived at the museum, they found the entrance guarded by Air National Guardsmen--real ones, not actors. And people who were late or didn't have their dog tags were hassled in authentic military style.
Once inside, the 200 attendees found more authenticity. Compaq people wore black flight jumpsuits. A buffet was set up in a "Mess Tent" erected next to the museum for the occasion; a Jeep was stationed between the two buffet lines. Food was served on partitioned metal mess trays, though the menu did rise above chipped beef on toast. Everyone was given a canteen stamped "Compaq Top Gun" from which they drank their beverages of choice.
Prize winners were asked to arrive early and received their prizes at a private ceremony before the doors opened. As Ballard had mentioned, not all resellers allow their employees to participate in contests, and the private ceremony avoided any "contention," she says. Later in the evening, there was a drawing for a Top Gun bomber jacket so that even those who couldn't participate had a chance to win.
And what did Compaq win? "Major resellers in all four states have become certified in enterprise storage," says Ballard. "A reseller in Iowa that had a winner has more than $2 million in storage products on the books." The reseller probably would have accomplished that eventually, she says, but "wouldn't have done it as quickly without the incentive." There were personal benefits as well. "My team thought of this program," Ballard says. "Each person owned a piece of it, and it helped the team pull together."
Talk about cultural differences. Jill Ballard took her resellers to an aircraft museum in St. Paul where they ate off mess trays in June--and loved it. Not so long ago, Mike Parrottino took resellers to a Planet Hollywood restaurant in Chicago and made them celebrities for a night. Two very different events, but they were both in the right place at the right time.
The Planet Hollywood party launched "Reach for the Stars," an incentive program for resellers that ran fourth quarter 1996 in the 10 states that, at that time, made up the Great Lakes Region. There hadn't been a regional program in a long time, says Parrottino, who is now director, reseller sales, Central Region. "We wanted to drive incremental revenue and wanted this program to be kind of a stretch." The event "really set the tone and pace" for the incentive, says Parrottino. Compaq took over the entire restaurant for its 450 partygoers. Highschoolers and their parents were hired to stand outside, cheer the arrivals, and ask for autographs. Searchlights and photographers added to the effect.
At the party, there were drawings for merchandise and travel, representative of the awards in the promotion. "We wanted to get people motivated and interested in what they could win," says Parrottino. Prizes included merchandise from catalogs such as The Sharper Image and travel awards for Ritz Carlton, Marriott, or Hyatt hotels and resorts, United or American airlines, and Celebrity or Carnival cruise lines.
Pricey prizes were appropriate, says Parrottino. "Compaq is a high-end brand--that's an image we work hard to create. If the prizes have lesser value, you diminish your own product branding." And the prizes did, in fact, produce results. Revenue was 163 percent above the year-to-year projections for the fourth quarter. The promotion itself earned three awards for results and creativity--two from the Society ofTravel Executives, one from the Association of Incentive Merchandise.
Tailoring incentive programs to local markets is a key part of Compaq Computer Corp.'s strategy. For help with creative development, as well as management of the programs, Compaq often partners with motivation and marketing services company James Feldman Associates (JFA), Chicago. President James Feldman says that JFA has worked on some 50 programs with Compaq.
When area reseller manager Jill Ballard wanted a Top Gun theme for her North Woods area program, "We took the concept to Feldman, told him our goals, and his company did the creative work," she says. Creative design was the responsibility of Michele Hove, creative director/merchandise director. Among her contributions: cylinders that simulated the sound of a jet takeoff. "JFA also managed the program so that we didn't have to count the points," says Ballard.
Programs must be "very carefully designed for the market," says Feldman. "If we did Top Gun in Chicago, it probably wouldn't work." Most of the salespeople in the North Woods area are male, he explains. In Chicago, it's more evenly divided between male and female, and women wouldn't be as interested in the prizes. Also, he says, "Chicago is more anti-militaristic than Minneapolis."
Companies are looking for return on investment, says Feldman, and the closer you get to the market, the easier it is to get the ROI.