My childhood room was filled with trophies, plaques and photos of my achievements. While I was on a fair share of winning teams, I didn’t expect to win an award if my team didn’t perform well. The norm today is to give a trophy to every kid on the team — even the losing team — but I’m not convinced this is a good way to build character and sportsmanship. After all, someone has to lose.

Recently, a local firm approached me, asking me to apply for a local technology business award. The application fee was $2,500 and I was a shoe-in. However, being asked to self-nominate and pay for my company to win an award set off alarm bells. It also made me think through a series of questions: Who evaluates these awards, and are they valuable tools that enhance your brand or just revenue-generating devices for the awards’ firm?

Over the years, my company has been fortunate to win a variety of industry awards. Some we’ve applied for and others we’ve received through nominations. Awards motivate my team and enhance our reputation. Yet, given that I don’t believe in awards for just showing up, I don’t want my team to become reliant on the little hit that winning an award gives. If the team is always working for awards, it misses the real point, which is working for our customers.

If I’m feeling iffy about how to select awards and whether they are truly valuable or not, I know other entrepreneurs and business owners feel the same. The dilemma requires an objective look at the pros and cons of industry awards:

Pros

1. Credibility. Awards help raise your profile and, regardless of the source, they look impressive.
2. Marketing and PR. Awards give you an excuse to send out a press release and reach out to your clients and customers.
3. Morale boost. Your team gets a real boost from being acknowledged for their hard work. As a company, an award gives you the excuse to celebrate; you’ve received outside confirmation of your firm’s quality.
4. Competitive advantage. Can your competitors say they have won awards? Awards differentiate your company from others. You can mention awards in proposals and other write-ups about your company.

Cons

1. It takes time to apply. Industry awards sometimes have lengthy application processes. With no guarantee for ROI, I have to weigh the amount of time it takes to complete the application against other ways my team or I could be using that time.
2. Evidence gathering. Part of the lengthy application process usually means getting quotes from clients and statistics that show our successes. I’m conflicted as to whether to put this point in the pros or cons column because I do see value in gathering this information for proposals and other marketing efforts. I also think reaching out to clients at any time can reinforce your relationship and help you in the long run. Again, the deadline can also be a positive motivator; just get it done! The work itself, though, and the amount of back and forth frequently required to get client approval of a case study or endorsement is time-consuming.
3. Morale decline. Just as an award can be a boost to the team morale, not getting an award can be a setback to a team.

I think it all comes down to credibility. Does the award give you more credibility with clients and prospects? Is the firm giving the award credible? Is it credible when you nominate yourself versus when you are nominated by someone else?

The awards I see being more credible come from established organizations or publications — my employee was nominated by her peers in an industry publication and my firm was highly rated by our customers. I also see value in awards based on facts — my firm sold the most software or did the most services within an industry space. Awards that have a defined vetting process also seem more legitimate to me, as opposed to the awards that are simply solicitations.

Here are some tips to quickly research the awards most appropriate (and credible) for your company:

• First look at the organization offering the award. Have you ever heard of them? Organizations like Chambers of Commerce, industry publications or industry trade groups are good options.
• Look at the award categories being offered. If there are an exorbitant amount of obscure categories being offered, don’t ignore the alarm bells you hear.
• Look at companies who have won or applied in the past. You want your company to be in the presence of other great companies. That doesn’t mean you will know all of them (my firm isn’t a household name), but you should recognize some.

Here’s my bottom line for our firm: when time allows, we apply for credible awards. However, we will not “pay-to-play.” While I don’t begrudge other business owners who decide to apply for every award that comes along, the best advice I can give is to find a way that makes sense to you and your clients/customers. After all, we have to differentiate ourselves to grow our businesses. Just remember to proceed with your eyes open. Today, success can often depend on transparency, and getting a trophy for something you didn’t earn won’t hold long-term meaning, for you or your clients.