Motivating Sales People To Sell
by Guest Writer Roger Koopman
What makes a good sales person tick? What combination of rewards and incentives will bring out their best performance?
What can companies effectively do to motivate their sales people to sell, while avoiding the peaks and valleys that so often accompany sales achievement?
Every sales organization asks these kinds of questions - and when production levels are down, revisits these issues over and over again.
We re-examine what we're doing, and try to fine tune our "systems" to extract a little more horsepower. By the time we're finished tweaking and tinkering, we often end up right back where we began!
What's Wrong With This Picture?
To find out I spoke with some of Gallatin Valley Montanas' most progressive companies, and asked them to share with us their formulas for success. Some of their answers may surprise you.
But first, I looked within my own organization, and asked my client services manager, Rich Powell, for some words of wisdom.
Rich joined my staff in April, after a successful career in sales and business management in the highly competitive environments of Seattle and Honolulu.
While Rich isn't opposed to commissions and profit shares, he made an important point. In the long run, professional sales people are far more motivated by their "belief" in the work they do, than in any particular combination of bonuses, commissions and other incentives.
Ultimately, sales people sell because they love to sell - and love what they sell. They see themselves as part of a dynamic, upward process.
They identify strongly with their customer, and with the product or service they provide. They believe in the importance of what they are doing, and see their jobs as having value and purpose.
A now-retired sales consultant for a daily newspaper trips to mind. Fred was a delight to work with - a real "pro".
He instilled in his customers, the confidence that he truly cared about their interests, and would go the extra mile to serve their needs. No hype. No pressure. Just excellent service, built around integrity and credibility.
In my opinion, he was the consummate professional sales person. And guess what? Fred earned no commissions; we worked on a salary basis only.
What motivated Fred was not "turning that next deal" or adding more commissions to his monthly tally. He was driven by his professional attitude, his love for his work, and an intense desire to serve his customers well.
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Commissions: The Good, The Bad, The Ugly
This is not an argument against paying sales commissions, but it is an acknowledgement that for most forms of sales, commissions are an option, not a necessity.
The bottom line: if the employee you hired is not a true salesperson, no amount of commissions will make them into one.
Techniques can be trained, but basic personality factors are essentially unalterable. These personality traits are the single strongest prediction of one's likelihood of success in the field of sales.
What makes commissions and performance bonuses so tricky, are the unintended consequences associated with poorly thought out policies.
One of the biggest pitfalls is the tendency of individual sales commissions to create negative competition within a sales organization, leading to resentment, secrecy and plummeting morale.
These side effects are even more pronounced when contests are added to the equation. Employers want to foster teamwork and open communication.
Instead, they may end up with sales people who are disgruntled and de-motivated, fighting over customers and devising subtle methods of cheating the system.
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Some Creative Ways Successful Companies Do It
Successful companies have found creative ways to harness the competitive, incentive driven nature of good sales people, with a minimum of negative backfires.
For Mary Brown, Director of Western Region Sales Operations for Right Now Technologies, this includes ingenious approaches that reward individual performance while building camaraderie and teamwork.
For example, the company will sometimes sponsor raffles for trips or special merchandise. The more a sales person achieves, the more "chances" they get in the raffle - yet everyone who produces has a shot at winning.
Often, Mary provides non-monetary incentives that are fun for employees and their families. A video camera. A mountain bike. A weekend at Big Sky (a local resort).
Or she may provide extra days off if sales quotas are met - to be used at the employees discretion.
The point is, great companies like Right Now use innovation and creativity to stay ahead of the employee motivation curve.
By developing incentive programs that are exciting and unifying, the company and the employees both win.
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What Can A Small Business Do?
To the century-old Owenhouse Hardware (an institution in downtown Bozeman, Montana), a different creative approach is taken.
As manager Larry Bowman explains, the key to retailing is to serve with excellence, every customer who walks through the door - whether they are buying a riding lawn mower or a package of thumb tacks.
Commissions and bonuses based on individual sales numbers tend to counteract the Owenhouse philosophy, and prompt sales personnel to "push" large ticket items and compete over customers.
Larry has tried a number of things over the years, but is convinced that for his type of business, incentives should be provided to all personnel (both full and part time), based on store-wide performance parameters.
Currently, the company is giving to each employee, credit toward in-store purchases based on monthly improvement in average ticket sales. The credit is computed daily, and entered on a calendar where everyone can see their collective progress.
As with most incentive programs, it's difficult to objectively measure its success. Larry isn't sure how many employees are knowingly motivated to boost average sales, but at the very least, the program focuses everyone's attention on the worthy goal.
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Alan "Fish" Fishburn, manager of the Mini-Nickel, has his own philosophy about employee incentives. Fish strives to build a sense of family among his staff, recognizing that "there's more to a job than a paycheck."
Failure isn't part of Fish's vocabulary, and when the office has a poor month, there's no finger pointing or blame-taking.
But in the good months, he likes to reward the whole staff, by taking them and their families out to dinner, bowling on Saturday night or some other enjoyable, bonding activity.
Individual rewards are certainly part of Fish's program, too. But very often these bonuses are given spontaneously, when the person least expects it, rather than being a routine and predictable thing.
He also believes that sales people respond better to targets that frequently change, rather than settling in on a regular system of rewards and bonuses that become a standard part of their pay.
Most importantly, Fish believes in the concept of mutual trust. He doesn't sweat the little things or keep his sales force on a time clock.
He's strictly results-oriented, building maximum flexibility into his company policies - from minding kids (and occasional pets) at the office, to cheerfully giving time off when it's needed.
In the end, it's not about money, says Fish (although he pays significantly higher than most others in his industry). "If you need to continually bribe a person to sell, you've probably hired the wrong person.
What motivates the true sales person the most is pride in their work and the positive feedback they get from their customers. And feeling empowered and valued by the company for which they work."
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The Last Word On Motivating Sales People
Obviously, employee incentive programs are not a one-size fits all proposition. As these successful companies demonstrate, different approaches work best in differing situations.
But one conclusion I've come to is that "motivating sales people" is a contradiction in terms. Sales people - if they ARE sales people - are already motivated.
The challenge employers face is channeling that motivation, and maintaining it at peak levels, week in and week out.
Creative, well-conceived commission programs and bonus plans can certainly help in this regard.
But ultimately, the most important factor lies within the heart and soul of your business itself.
If a sales person identifies with the culture and mission of your company, and feels a sense of ownership in your company's future, then you will most likely have a loyal, motivated employee whose consistent performance levels will help you reach for the top!
Return to the "How to Build a Business" Directory
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Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your Business Or Service In A Small Town, and The Small Town Advertising Handbook: How To Say More And Spend Less. He is also a seminar and workshop presenter and trainer. He may be reached at 406-585-0219 or PO Box 271, Bozeman, MT 59771-0271
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