Tweet

Money is a Short Term Fix: Motivate Sales Reps the Right Way

Guest post by: Greg van der Linde

Article Overview: Executive Summary: Sales leaders who wish to temporarily solve motivational issues use monetary rewards. However, long term behavioral change is created by challenging sales reps, offering praise, recognition, and the opportunity to grow and expand their sales career.

Money is a Short Term Fix: Motivate Sales Reps the Right Way

Effective Motivation is a Great Investment

Motivated sales reps not only provide a greater return on investment and require less attention, they also allow sales leaders to increase their personal productivity level. When sale leaders and reps are working at the optimal level, sales organizations are more successful. Therefore, sales leaders must expand motivational tactics and opportunities beyond emphasizing money because:

• Money is Not the Strongest Motivator
• Money Merely Drives Activity
• The Focus Must be on Praise and Recognition
• Learning and Growth is Stimulated by Challenging Sales Reps

Money is Not the Strongest Motivator

Contrary to popular belief, money is not the strongest motivating factor. While it may be the most common, it is not the most successful. Yes, when presented with the opportunity, sales reps will execute the task needed to acquire the monetary reward. However, each sales rep is unique and as such has a distinctive set of priorities and personal aspirations that need to be addressed. Sales leaders must focus on the motivators that will inspire sales reps to increase their effort and performance. (See Motivation - Quick Start Bundle)

Motivation is necessary in order to push sales reps to perform and meet their full potential. When used properly, motivation is a personalized mechanism for sales reps, and can be used to spur both short and long term behavior. By developing and implementing a wellrounded, customized incentive plan, reps will be motivated to:

• Improve their performance
• Remain dedicated
• Welcome coaching and feedback opportunities

Money Merely Drives Activity

Money is only effective when used in the short term to spur current actions. It is an attention getter, as any sales rep will gladly take an extra payout for completing a said task. This is why so many sales leaders use money as a motivator. However, this type of reward does not change a sales rep's desire to further develop. It will not improve their current skills, and they will not experience growth. Short term activities will be achieved, but the odds of long term success are not improved.

If money is used as motivation once, it must be continuously used as an incentive to elicit the desired performance from reps. Therefore, SLiA Group advocates ensuring that sales reps are fairly compensated for their time, role, skills, and experience in addition to being given the opportunity to earn an attractive commission. When adequate compensation is provided, money becomes less of a motivating factor and there will be fewer disgruntled reps.

Examples of money motivators are:

• Additional commission for an increased number of closes within a given timeframe
• Bonuses for deals closed at the end of the quarter
• Cash for most appointments
• Overselling products

Sales reps will not grow and refine their skills if money is the main source of motivation. All they will be thinking about is their next bonus. The problem with this approach is that the emphasis is placed on the activity rather than the behavior. Activities can always be completed through incentives, but improvements are achieved by increasing motivation. Any result can be achieved once, or even twice. Consistent results are achieved through effective behavior.

If sales leaders can offer motivation in other areas that focus on developing their reps' behavior (e.g. coaching, training, skills development), the likelihood for growth and long term success, rather than short term activity gain, will be increased.

The Focus Must be on Praise and Recognition

While monetary motivation can be used periodically to stimulate activities, it cannot be the main source of motivation for a sales team. Sales leaders who focus on praise, recognition, and development will achieve better results. This will lead to long term success, because instead of offering short term activity gain, the focus is on the rep's growth and development. As this culture develops and reps receive praise and recognition, their sales behaviors, and thus their performance, will improve.

Desired praise and recognition differs for each rep. Therefore, sales leaders must createincentive programs that utilize a variety of motivators. To understand these motivators, sales leaders need to:

• Develop personal knowledge of their sales reps
• Always collect feedback
• Create a variety of motivators and follow through with them

An effective incentive program that includes various motivation techniques can be createdby using a reward hierarchy.(See Motivation - Quick Start Bundle)

• Thoughtful Rewards: Based on a rep's contribution, impact on company culture, and customer service, etc. Examples include handwritten thank you notes, public recognition at a sales meeting, or a phone call from the CEO.
• Effort Rewards: Most calls, referrals, sales in a period of time, etc. Examples include gift cards, movie passes, or an iPod.
• Yearly Rewards: Salesperson of the year, most improved numbers, personal development, etc. Examples include additional vacation time, annual award, or a paid training program.

Learning and Growth is Stimulated by Challenging Sales Reps

The best method by which to motivate sales reps is to challenge them with the opportunity to expand their skills. Creating a sales culture that is both challenging and rewarding will help them thrive.

The following are sample opportunities which will motivate sales reps:

• Training seminars/personal development programs based on skills of interest
• Career opportunities
• Status recognition
• Contribution to upper management meetings
• Job shadowing

Sales reps thrive when they are challenged. Sales leaders who motivate by raising the bar of expected sales behavior will see a positive change in their sales culture. The right motivation programs will increase performance, employee and buyer satisfaction, and, result in less rep turnover. Motivating based on factors other than financial rewards will yield returns much greater than money. It will create a well versed and skilled rep for sales leaders to use to their advantage in the future.

Bottom Line & Business Impact:

While money motivates activity, having the right culture has the greatest impact on increasing motivation. Money is the easy fix; however, it often does not produce the sales leader's intended result. Focusing on motivation tactics beyond offering money has the largest impact on rep performance and their ability to generate greater revenue more often.

Related Articles
  Should You Train Unmotivated Sales Reps?
  Exclusive Short Term Revenue Focus, Long Term Business Issues
  THE TRAINING GAP
  Pros and Cons of Using Independent Sales Reps
  How To Hold Sales People More Accountable
  Manage Your Salespeople by Working Smart, More Stack Rankings
  Tips for Working with Independent Sales Reps
  Sales Management Training Tips: Coaching the Talented-Slacker
  Preparing to Handle Independent Sales Reps
  What "Better Questioning and Listening Skills" Do Sales Reps Really Need?
  The 5 Secrets of Motivating Your Sales Team
  Build Your Salespeople’s Strengths And Use Them As Launch Pads For Better Sales Success
  Making your new product launch a success
  What to Expect When Dealing With Independent Sales Reps
  How To Motivate Salespeople The Easy Way
  Communication Breakdowns
  A New Year in the Pharmaceutical Industry
  Sales Training - short term or long term success?
  How to Sell A Pencil - And Your Product Or Service
  Three Interviewing Mistakes - And How To Avoid Them

Article Tags: compensation, driving behavior, incentives, motivating a sales team, motivating sales reps, rewarding performance, rewarding sales reps



Related Forum Posts
Online Sales and Marketing vs Traditional - Hi Evan, I am noticing that many of the posts in the Sales/Marketing section deal with online marketing, SEM and and SEO and Affiliates. I was wondering if it might be a good idea to separate that section into two; 1) Online Sales and Marketing; 2) Traditional Sales and Marketing
Re: Online Sales and Marketing vs Traditional - [quote="ltrahan":31w9r2iz]Hi Evan, I am noticing that many of the posts in the Sales/Marketing section deal with online marketing, SEM and and SEO and Affiliates. I was wondering if it might be a good idea to separate that section into two; 1) Online Sales and Marketing; 2) Traditional Sales and Marketing[/quote:31w9r2iz] I second the request...
Re: Which would you start: a Blog or Online Community? - It is a difficult decision to make. Lets start it this way - What are you more interested in? Money? or Friends? or Both? If its purely Money, then Blog might be an appropriate answer. But consider this - It will be people (visitors) that will bring traffic to your blog and then Money will follow. This will be possible after a time and during this time it will be your friends who will be the starters. If you are looking for friends only, then its true that not many will be interested in knowing how you have beaten them in the game or the other way round. So it will be preferable to have a Forum where they can share ideas with you and others. But you can share your insider knowledge with them and invite comments from your Blog. You can also put up information on what others (including your friends) don't know about Tennis. The blog you create can provide News, Inside Information and also Techniques that can be used by the new entrants in the world of Tennis.
Re: How do you budget your life? - Here is my financial management categories for today: 15% Long Term Savings; 10% Home Expenses; 45% Business and Marketing charges; 10% Friends (Meeting); 20$ Scientific and Law Books. But this will change when it is August or September. Orxan
Making Money in 2011 - Hello forum members! As we draw closer to the new year I thought it would be appropriate to change the title of our forum category "Making Money in 2010" to "Making Money in 2011" - I'm looking forward to some interesting discussions and wish everyone a prosperous New Year!


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Making the Most of Your Trade Show Experience

The Right Job - Part Five 'Compensation'

Get Your Business on Google Places

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.