Sales Management and Motivation

Solving the “How do I motivate my salespeople?” riddle is the central theme of sales compensation for many in sales management.

The tactics used typically default to a “carrots and sticks” approach, or one that relies on extrinsic motivation. In this classic command-and-control environment, cash is king, sales management’s role is to light a fire under their salespeople, and sales compensation provides the levers that are pulled to motivate salespeople and drive the needed behaviours.

However, more and more companies are now re-thinking this approach to motivation. Their reasoning is linked to one or more of the following themes:

Motivation vs. Manipulation: While sales management may speak confidently about their ability to motivate, salespeople may see a different m-word in play: manipulation. Within any command-and-control environment, the use of extrinsic motivators further reinforces the already clear delineation between superior and subordinate. Even though the attempts are not malicious, extrinsics feed an “us vs. them” mentality, and undermine a salesperson’s capacity to identify with company goals. At a certain level, these efforts can be perceived as demeaning.

No Root Cause Analysis: When results are trending down, sales managers often reach for extrinsic levers like contests or special incentives. And while behaviour may change (or appear to change) for the duration of the program, no effort is expended to identify and address the root cause of the problems originally encountered. As a result, sales management can be caught in an endless and inefficient cycle of “results are down – let’s run a contest – results are down – let’s run a contest”.

Cash is Not King: Study after study demonstrates that cash is not a primary motivator, even with salespeople. It is very important in terms of recruitment and retention, but can not drive consistent behaviour on a transaction-to-transaction basis. And finally –

They Never Really Worked Anyway: If extrinsic motivators were the answer, sales compensation would be easy. Need to increase sales of “Product B”? Just increase the commission rate and watch the orders roll in! The bottom line is that extrinsic motivators can not deliver results on a sustained, reliable or predictable basis.

The emerging approach to motivation is best captured by re-stating the central theme of sales compensation as: “How do I build a motivated sales force”. This represents a significant philosophical shift towards actively harnessing the power of intrinsic motivation, or of an individual employee’s internalized commitment to success.

Command-and-control is displaced by coach-and-mentor. Sales management’s role is not to light fires under salespeople, rather to provide the tools, training and resources salespeople need to be successful.

From a sales compensation perspective, this approach requires a coherent, well-communicated plan that is aligned with company objectives and provides a competitive base salary. Other must-haves include an attractive overall earning opportunity, thorough documentation, salesperson-friendly administrative and payment processes, and transparent quota-setting practices.

In general terms, sales management’s orientation should be towards providing a strong employment value proposition, and on creating the conditions where salespeople have the confidence to fully engage in the process of selling. As the saying goes, “You can lead a horse to water, but…”