How to Motivate (and Avoid Demotivating) Sales Staff
This month Ifti examines one of the key drivers in sales success – Motivation, and explains how to properly motivate a sales team to achieve your objectives.
Before we get into how motivation of a sales team works, I’d like to share a personal experience from my days out in the field.
Many years ago as a hospital sales representative, I was tasked with introducing a new product at Basingstoke General Hospital in the UK. Over a three month period I worked hard to sell this product to the customer, engaging in all the activities I now know to be account management: meeting with key consultants (decisions markers), their registrars (influencers), the SHO’s (users), pharmacists (both influencers and payers) and so on. Finally, after weeks of hard work and customer engagement, I received confirmation of first usage of the product!
I was of course very pleased with this result, and in my weekly debrief with my area manager, he was equally pleased with this success. Congratulating me on a job well done, he said “I know you’ve put a lot of work into this and I know the impact it will have on your family. Take your wife out for a good meal at a nice restaurant and send me the bill.”
After 25 years, I still remember this and I’ve often tried to figure out why. I was highly motivated by this experience, but surely other more significant experiences that came later on should be more memorable? I was well paid, the incentive schemes were generous and I made much more money from them. What made this event stand out? Finally I concluded:
- It was the personal recognition I received
- The reward was equally personal (the manager decided, not company policy or incentive)
- It was proportional to the level of success
- It was appropriate given the work carried out
- It was timely
I do believe that the action of the manager was instinctive as opposed to calculated, but the right thing to do is instinctive if you know your team. How well do you know your team?
Sales professionals sometimes forget that what motivates sales people is the same thing as motivates all people. To motivate your sales team, first think of the basics before thinking of the incentive plan! I am sure that everyone will be aware of the Maslow’s hierarchy of needs, nevertheless I include the obligatory diagram below:
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For those who are unaware, this is essential reading for anyone interested in motivating others, here is a link to get you started.
Briefly, Maslow states there is a hierarchy of needs, only when the base needs are satisfied, can the higher needs become evident. The model is relatively simple and I have found it useful in practice. The main challenge with the model is that there is no absolute, for example the security needs of one salesperson can differ greatly from another. Thus the model can only be used on a one to one basis and not for any group of individuals. However, I have found it useful to build a profile of each team member and to decide on a motivational strategy for each individual. It is important to understand that individuals can go up and down the hierarchy of needs depending on the changes in their environment. For example, a salesperson in the “belonging” phase may drop into the “security” category if there are redundancies in the company or even the market.
A more focused study on work and motivation was carried out by Herzberg in the USA with over 200 office workers and led to a simpler observation of motivators and demotivators. Although the sales environment is not the same as for office workers, the study gives a nice platform to start your deliberations.
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In my opinion, the above two theories are enough for any sales manager to understand some of the underlying factors for motivating sales teams and I am sure it is no revelation to any manager, the more time you spend with your team, the better you know them. The better you know your team, the greater your chances of making the right motivational decisions.
The study by Herzberg also points to a reality, “supervision” accounted for 5 times more demotivation than motivation. On our training programs for new managers, we make them aware that their capacity to demotivate is greater than to motivate. Sales managers must, like doctors, therefore take the Hippocratic Oath “first do no harm.”
All the above is focused on sales motivation from a personal level. What if you want to motivate the whole sales force? The Herzberg study found that company policies and administration are the biggest source of demotivation! What if your job is to manage managers, sales processes or sales incentives? Is the best you can hope to be is ‘not demotivational?’ Surely not?!
In my experience, the key to ensuring motivational programs are effective is to make sure that the ‘hygiene factors’ are met and the administration, incentives and processes are directly linked to the motivation factors of achievement, recognition, advancement, and growth.
In the pharmaceutical sales world, hygiene factors essentially mean that you have to offer working conditions and remuneration that is competitive to your competition. Not to do so will mean difficulty in recruiting and retaining the right calibre of people. The resulting compromise in the calibre of the staff usually demonstrates the false economy. It will require more effort to train this group and will inevitably result in lower than expected sales.
I appreciate that it is not always possible to offer a competitive salary or even a competitive package. Good sales people are driven to achieve and love recognition; it is possible to attract these people by having a clear and demonstrable career path. The demonstrable part is critical because I have yet to come across a company that says they recruit sales people and expect them to stay in the same role until they retire or leave. If this is you, then you can expect a high turnover.
How to link administrative, incentive and sales processes to achievement and recognition?
This is an extremely large topic and goes to the heart of the business. It is not possible to generalise this issue and each company division needs to fully consider whether it’s sales processes support or hinder the purpose for which they are set. From a sales person’s perspective, the biggest reason for failure of these systems is a lack of clarity. The reasons for why something needs to be done can be completely hidden and thus become demotivational.
For sales programs a good program manager should define exactly what needs to be done to get a sale with his product in his market. These defined activities should be linked to appropriate rewards. Defining these activities is no simple task, given the complexity of markets, competitors, and product mix from territory to territory or country to country.
In reality sales incentives schemes will not be acceptable to management unless they are absolutely linked to sales, logical but flawed! This position is logical because the extra funds for incentives have to come from the increased sales. However, the flaw is: sales is not only a lagging factor, it is also multifactorial.
What does this mean? Sometimes the right activity in this cycle will result in increased sales only in subsequent cycles. It is possible that these lagging sales will not be rewarded because the targets are likely to change. Multifactorially, the sales person may do everything right but due to factors outside his/her control; the sale may still be stalled. In cases where the incentive plans are focused only on sales, they will become demotivational.
A compromise is often needed! I have found in practice a mix of activities (quality and quantity) and sales targets works. The percentage of sales to activities depends on how well you are able to define the activities. If you know exactly what type of activity (and its frequency), then you can have 60% activity 40% sales target performance. If there is great variation in activity, then this can be reduced. If you absolutely have no objective way of defining what activities lead to sales, in my experience a balance of 20% for activities and 80% for sales has worked well. This will still allow a focus on the right sales behaviours without compromising sales efforts which are not yet understood.
The most demotivational thing for a sales person is a lack of definition. Even though salespeople love freedom, a lack of clarity in what is expected of them can lead to confusion and demotivation. Be as clear as possible about what you want the sales person to do and demonstrate this by rewarding appropriately.
To conclude this article my experience in motivation says:
- Know your teams and what they want
- Know your product and market, to allow you to conclude what needs to be done
- CLEARLY communicate what you want
- Reward openly and as often as possible, the behaviours you want repeated
- Keep any incentive programs simple
I hope that the reader finds this article informative. If you have any questions or comments you can share them in the comments form below. Alternatively should you require further details of any of the strategies I would be more than happy to send additional information. Please feel free to contact me for any comments, feedback or requests on Ifti.firstname.lastname@example.org
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