A sales contest is a competition designed to stimulate sales efforts by offering prizes to salespeople, distributors, or retailers who meet certain sales goals in a specific time period.
According to the lawinsider.com dictionary, “Sales contest means any contest among associated persons for cash or non-cash prizes that are preconditioned on the achievement of a sales target within a defined period of time with respect to the sale or distribution of any security or type of security. “ This term will not mean any contest among related individuals for all kinds of securities, with the condition that the members maintain records of all these contests, consisting of the criteria for rewarding prizes and the names of the related individuals who take part in such contests.
A sales contest refers to a motivational program where rewards are given to salespersons based on their sales and/or outcomes. This contest can be of three types. They are as follows:
- Team competition- Teams are rewarded collectively for achieving the target.
- Direct competition- The salespersons compete against one another and there is a single winner.
- Goal- Rewards are offered for attaining goals. Here, more than one individual may win.