In 1960, two brothers scraped collectively $900 and acquired a failing pizzeria in Michigan, launching what would turn into a cautionary story about gross sales incentive applications gone incorrect. Inside months, one brother traded his half of the enterprise for a beat-up Volkswagen, leaving Tom Monaghan alone along with his ambitions.
By 1965, with three shops beneath his belt, Tom confronted a naming disaster. He couldn’t legally maintain utilizing the unique title, DomiNick’s, so an worker prompt “Domino’s.” The emblem? Three dots, one for every retailer. Tom figured he’d add a brand new dot for each location.
After opening retailer quantity 5, he properly reconsidered that plan.
As a result of what occurred subsequent wasn’t simply progress—it was an explosion that will educate gross sales leaders in all places an important lesson concerning the double-edged sword of highly effective incentives.
How One Gross sales Incentive Program Almost Destroyed a Billion-Greenback Firm
Right here’s what America seemed like within the early Nineteen Eighties: Microwave ovens have been revolutionizing kitchens, Federal Categorical was making in a single day supply an expectation, and People weren’t simply consuming sooner—they have been dwelling sooner.
Domino’s match completely into this new rhythm, however Tom Monaghan wished extra. In a transfer that bordered on harmful, he made a promise so easy it might outline the corporate for many years:
“Pizza Delivered in 30 Minutes or It’s Free.”
It wasn’t nearly pizza. It was about certainty. And America purchased it—actually.
Inside a yr, gross sales exploded. From 200 shops in 1978 to over 2,500 by 1985. Over 5,000 by 1989. Each retailer turned a velocity manufacturing unit with slimmed-down menus, cookie-cutter layouts, and drivers who may as nicely have been sitting behind the wheel with engines already operating.
Rivals couldn’t sustain. However right here’s the brutal fact about velocity: you don’t see the hazard till it’s too late.
The Hidden Risks of Efficiency-Based mostly Compensation
Right here’s what each gross sales chief wants to know: Highly effective gross sales incentives, pushed too far, create unintended penalties that may destroy firm tradition. This precept, that when metrics turn into targets, they stop to be good metrics, would show devastatingly true for Domino’s.
At first, the cracks have been small. A supply driver rolling a cease signal right here, a rushing ticket there. However this wasn’t a system constructed to reward endurance—it was constructed to reward velocity at any price.
Inside Domino’s shops, the stress wasn’t delicate. Drivers have been anticipated to race the clock. In the event that they missed the 30-minute mark, some franchises made them pay for the order out of their very own pockets. The message was clear: make it quick, or make it up your self.
Rolling stops turned operating purple lights. Neighborhood shortcuts changed into dangerous maneuvers by means of heavy site visitors.
What clients didn’t see—and what Domino’s executives refused to acknowledge—was that they’d created a ticking time bomb. Velocity wasn’t only a enterprise mannequin anymore; it had turn into a lifestyle that decided each worker’s habits, and sensible gross sales leaders perceive this connection between incentives and tradition.
By the late Nineteen Eighties, insurance coverage corporations raised Domino’s premiums by 15-20 p.c. Reviews surfaced of accidents tied to supply drivers dashing to satisfy the 30-minute window.
Then got here the story that modified every little thing: A Domino’s driver in St. Louis ran a purple mild, colliding with one other automobile. Inside that automotive was Jean Kinder, whose life was completely modified. The jury awarded her $78 million in punitive damages.
In 1993, Domino’s formally ended the 30-minute assure in america.
Right here’s what most gross sales leaders get incorrect about incentives: they don’t simply form what individuals do—they form who individuals turn into.
Sound acquainted? It ought to. As a result of this similar sample performs out in gross sales organizations each single day.
5 Warning Indicators Your Gross sales Incentives Are Backfiring
Take Wells Fargo’s aggressive cross-selling objectives within the mid-2010s. Supervisors advised bankers to open extra accounts, promote extra merchandise, and hit quotas—or else. Staff did precisely what they have been advised, opening faux accounts and forging signatures. Wells Fargo didn’t create fraudsters; they created an incentive system that made fraud really feel like survival.
There’s a reputation for this phenomenon: the Cobra Impact. When a metric turns into a goal, it ceases to be a great metric.
Listed below are the warning indicators your gross sales incentives want fixing—purple flags that point out you’re prioritizing exercise over outcomes, enabling moral shortcuts, and creating feast-or-famine income patterns:
- Staff focuses on exercise over outcomes – Extra calls and emails don’t matter in the event that they’re not creating significant prospect conversations
- Quick-term wins at expense of buyer relationships – Discounting closely to hit month-to-month numbers whereas sacrificing long-term worth
- Excessive turnover amongst prime performers – Your finest individuals go away as a result of the system rewards the incorrect behaviors
- Moral corners being lower to hit numbers – When quotas turn into extra necessary than integrity
- Feast-or-famine income patterns – Inconsistent outcomes month to month as a result of the main target is on fast fixes, not sustainable processes
Design Gross sales Compensation That Drives Sustainable Progress
One of the best compensation techniques reward main indicators and sustainable behaviors, not simply outcomes. Domino’s discovered this lesson the laborious method, however they didn’t simply bury their story—they modified course totally. Within the late 2000s, they made a shocking transfer, publicly admitting: “Our pizza isn’t superb.” They confirmed actual buyer complaints, took the hits, then started working. Their inventory climbed from $8 in 2008 to over $300 inside a decade.
They discovered to construct higher incentives that reward the fitting behaviors and align with long-term success.
Right here’s methods to construct incentives that drive sustainable success:
Give attention to Main Indicators, Not Simply Outcomes. As an alternative of solely rewarding closed offers, reward the actions that create offers: thorough discovery calls, correct qualification, and relationship-building actions that compound over time.
Reward High quality Over Amount. One well-qualified alternative constructed by means of real relationship-building is price greater than ten tire-kickers. Incentivize salespeople to stroll away from dangerous suits and make investments time in prospects who match your supreme buyer profile.
Align Quick-Time period Actions with Lengthy-Time period Objectives. If buyer retention is essential to your enterprise mannequin, ensure your compensation plan doesn’t punish salespeople for taking time to make sure correct onboarding and implementation.
Construct in Security Valves. Create mechanisms to catch unintended penalties earlier than they turn into systemic issues. Common suggestions loops and administration oversight can forestall small cracks from changing into main fractures.
Make Values Seen in Your Metrics. If integrity, buyer success, and teamwork matter, discover methods to measure and reward these behaviors alongside income manufacturing.
The Backside Line
Whether or not you’re operating a gross sales group or delivering pizzas, the precept stays the identical: if you need higher outcomes, construct higher incentives.
Your incentive system is both your best asset or your best legal responsibility. The selection is yours, however the penalties—good or dangerous—are inevitable.
As you design your subsequent compensation plan or set your subsequent group objectives, bear in mind the Domino’s dilemma. Velocity with out knowledge is simply recklessness with a deadline.
The query isn’t whether or not your incentives will form habits—it’s whether or not they’ll form it within the course you truly wish to go.
Don’t simply transfer quick. Study when to hit the brakes.
An necessary a part of growing a excessive performing gross sales group and making a collaborative work setting is hiring the fitting salespeople. Obtain our FREE Final Gross sales Interview Information and learn to supply, recruit, rent, and retain prime gross sales expertise.
