How To: Motivate Your Sales Staff
Selling is a tough job—tough on the ego, tough on the energy level—which explains why sales reps are often some of a company’s highest-paid employees. But even a fat salary is usually not enough to combat steep competition, finicky customers and grumpy prospects.
“If compensation were a sufficient motivator, your people would already be performing,” says sales consultant and executive coach Mark Palmer. Instead, it is critical to identify what excites your people—maybe it’s cash, certain gifts, prestige, peer recognition or job satisfaction. But there is one unifying quality of all leading sales reps: “They want to be on top, and they want to be unique,” Palmer says. “They want to win.”
However, it’s critical to find ways to ignite an entire department, not just identify your leading sellers, says management consultant Doug Johnson. “Otherwise, the top three or four people work like crazy to win, and the rest of the people who are just regular good salespeople—not superstars—figure they can’t compete so they just give up,” Johnson says. “You have to create a program that allows everyone to win at some level.”
Consider these strategies to fire up your sales force:
⇒ Make commission a driving force. To get the results you want, shake up your commission structure. If you want to push a new product, offer a higher cut for that model. Make sure staff members are encouraged to land the big fish with proportionally big payoffs. Johnson once worked for an insurance company where the receding commission structure discouraged sales reps from going after the big, tougher-to-sell policies. The midsized policies were the reps’ sweet spot, and cost the company lots of lost, big, profitable policies.
⇒ Build winning teams. Creating sales teams—in which there is an incentive for each member to support, mentor and encourage the other members—has proven valuable in many ways.
⇒ Build in peer pressure. Publicly posting sales, margins and conversion rates lights a flame under everyone.
⇒ Get the whole company behind the sale. After all, the whole organization’s survival depends on the sales department’s success. Announce contests and campaigns to the whole firm. Encourage supporting departments—such as customer service, engineering and marketing—to be supportive of the sales staff’s efforts.
⇒ Find out what motivates. Ask your sales team what they want. Experiment with different bonuses and prizes. Often, cash is king. Sometimes highly luxurious items that are reluctant self-purchases might be big winners. Other times, less tangible prizes—such as the ability to telecommute once a week—can resonate with staff.
Mark Faust, business consultant and author of Growth or Bust: Proven Turnaround Strategies to Grow Your Business, advises clients to award performers with a day off, which might include a golf course pass. “Giving a vacation day is one thing, but a vacation day that includes the fee for the pay lake or greens fee is another,” Faust says. “They are being paid to fish or golf, and they have to do it—they aren’t stuck at home with a ‘honey do’ list or just a boring day off.”
⇒ Keep it frequent. The key to successfully motivating sales staff is to build a strategy into the daily work. Small but frequent tokens of accomplishment might include a can of soda for making a daily quota, or an early out on a Friday for a week well-done.
Another of Faust’s ideas: “hour power coupons” granting a contest winner a pass to play games in the company break room or hit the gym in the middle of the workday. “The key is to give them out in multitude and frequently, and let the rep choose the exact time,” Faust says. “The one hour off has an excellent ROI, since the employee returns to their desk refreshed and hits the ground running.”
Company: Mosaic commercial printer, Cheverly, Md.
Source: Joel Zelepsky, senior vice president of sales and marketing
Number of Sales Reps: 15
Strategy: Contests in which everyone wins, inspiring the entire company to support the sales team
Evidence of Success: 20 to 25 percent annual sales growth
I’m a big believer in not giving just money—I want to give my team memories to treasure through unique experiences.
Each of the last five years we’ve had motivating contests with a different theme each year. The program is announced at the annual companywide barbeque, which helps get the entire company behind the sales guys. Once he makes his goal seven out of 12 months, each sales rep can walk into my office and take a special prize off the wall. One year the theme was the “Heavy Hitter’s Club,” and I bought one authentic Louisville Slugger for each salesman laser-engraved with his name, and mounted them on a professional rack in my office. Other years the prizes were personalized professional race car steering wheels, and $400 professional-quality NFL jerseys for the salesman’s favorite team, customized with his name and birth year.
As the months wear on, the peer pressure builds, but it also encourages a team effort. Sales guys mentor those lagging behind, but people from other parts of the company become part of the enthusiasm, too, as they walk by the window of my office and see the remaining prizes. Guys from the bindery or print shop will come by and ask the sales associates what they can do to help our guys earn their prize. Quite honestly, these are prizes that any one of our 150 employees would love to have.
On top of that, I’ve found that instead of cash prizes, sales associates are often more motivated by a choice of services like 50 weekly gourmet meals, or a year’s worth of housecleaning. These serve as a weekly reminder of their accomplishment, and also treat the employee to something they probably would not buy for themselves. I cannot tell you the mileage I got out of the gourmet meals—the wives absolutely loved it. Plus, when a guy is making $200,000 and you give him a $5,000 bonus, he’s like, “Whoop-de-doo.”
This year our “Prospector” program is focused on getting new business, and the cash prize is based on a percentage of new business. The twist is there is no ceiling on how much their bonus can be. They can’t believe we did that. It’s exciting.
Company: Hagie Manufacturing, large farm equipment maker, Clarion, Iowa
Source: Travis Stallkamp, business development manager
Number of Sales Reps: 25
Strategy: 100 percent commission team selling, a share in margins, a bonus based on market share
Evidence of Success: Doubled revenue since 2007
Almost all of our sales staff are on 100 percent commission, which works really well for us. Our machines sell for between $180,000 and $400,000, which means they are low-volume, but the demands on margin are high. If the sales staff doesn’t sell, they don’t eat. Our guys are top-dog, A-game players, and in our industry cash is king. It’s good old-fashioned capitalism and just the way our guys are.
In recent years we’ve moved toward team selling—three people to a team, each member works towards a combined goal, and they split the commission equally. When it comes from profiting from employees, there is a huge psychological factor. It can be very difficult for salespeople working alone away from the office. These teams create synergies—they’re like little businesses within businesses—and their results far exceed those working alone. Plus, our office had fewer questions and phone calls since the sales staff had each other to turn to.
We use the human drive to be the best by publishing team rankings monthly—including margins. These margins are a big deal—when we sell a machine, we have to take trades of used equipment, and the team is responsible for reselling it. We pay them 50 percent of the profit, so they have a huge vested interest in selling it, and selling it at the best margin.
We’ve seen a jump in sales since implementing a bonus system based on market share. Again, everything is cash, though once in a while, for an especially well-done job, we’ll give someone a vacation to Hawaii for him and his wife. It’s just something extra to tell them the company cares about them as individuals.
Source: Steve Riddell, COO
Number of Sales Reps: 25
Strategy: Initiated a bonus system designed to improve overall performance, including gross sales
Evidence of Success: Since launching the program, conversion rates jumped from an average of 27 percent to 36 percent, and revenue improved by about $2 million, directly attributed to the new bonus program
We sell window blinds over the Internet, and 30 percent of our sales are to customers who call in because they’re not finding what they need online. A year and a half ago we moved from a flat salary structure to a base-plus-incentives structure, and it’s had a huge effect on our conversion rates.
We never want to use incentives and compensation to fix what is broken, but rather to take our sales to the next level. Before, the company gave kudos to the salesperson with the most revenue, but we found that person was just taking the most calls and cherry-picking callers who were most likely to buy.
Our program is designed to improve overall behavior, as well as results. Our bonus system is based on revenue, dollars sold per call, conversion rate and the quantity of calls. When supported by training, the sales associates’ skills improve, their behavior improves, and performance goes up.
Our competitions have several components. Our Red Bull Club gives a Red Bull energy drink to every person who makes $7,000 sales in a day and at least a 36 percent conversion rate. That qualifies them to win a cash prize of at least $40, which also requires they take 24 calls per day, average $150 per call, and have a 40 percent conversion rate—as well as show up for their shift on time. Sales associates are paid $10 per hour, but some make as much as $60,000 per year.
Also, sales results are posted every single day before the entire company. Since the prizes don’t go to the same person over and over, each person focuses on their daily performance and competes against themselves. You have to look at sales as a holistic and constant process. Periodic contests do not change behavior, and they don’t improve results long term.