Building a Winning Sales Force
Powerful Strategies for Driving High Performance
Authors: Andris A. Zoltners, Ph.D., Prabhakant Sinha, Ph.D., Sally E. Lorimer
Pub Date: March 2009
Print Edition: $39.95
Print ISBN: 9780814437568
Page Count: 496
e-Book ISBN: 9780814410424
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Incentives that Work to Motivate Salespeople in Tough Economic Times
Tips for Successful Mixing and Matching Sale Force Rewards
Incentives help sales leaders set expectations that reflect company goals and hold salespeople accountable for results. Typically associated with commissions and bonuses, they reinforce a sales-driven culture and attract high achievers. However, incentives can lead salespeople to focus on the wrong customers or products. Designing a successful incentive program requires blending financial analysis with art and intuition about how salespeople will respond to a mix of motivators. Here are a few creative ideas and cost-effective tips for redesigning your incentive offerings:
- Select performance measures with impact. Successful selling is about more than sales revenue. Gross margin, market share, and customer satisfaction are some of the other measures that can be used to determine incentive pay. The criteria for a reward can be based on the absolute numbers achieved, growth over the previous year, the percentage of goal attained, or ranking versus peers. After exploring a range of measures, choose three or four. Using just a few measures makes an incentive plan simple and clear, which helps salespeople stay focused and motivated.
- Shift your pay mix in favor of salary and sales force development. The company motivates and controls its salespeople by adjusting product commission rates or offering special bonuses. To truly invest in your salespeople, consider a pay mix with more salary and a moderate level of incentives—between 20 and 35 percent of total pay. This will allow sales managers to take advantage of the power of incentives, while actually managing—coaching, monitoring, advising, and guiding—salespeople. Increasing salary can actually save your business money in the process of developing a strong, skilled, motivated, and loyal sales force.
- Stop rewarding past performance. Too often, veteran salespeople keep on earning enviable incentive pay for simply maintaining large, comfortable accounts. To re-motivate seasoned sellers and save substantial money, start paying your veterans based on their current performance. Tie incentives to new business development or sales revenue increases over the last year or six months. If your company has the resources, offer to repay sales pros for their past efforts in exchange for “selling back” some of their accounts to the company. Divide and assign these accounts to ambitious new recruits, with a strict limit on the number of active accounts a salesperson can have at any one time.
- Motivate experienced salespeople with recognition and fresh challenges. Tie criteria for coveted honors such as membership in the President’s Club to true performance, not just years with the company. Celebrate strong sellers with a special lunch, certificate, ribbon, or profile in the company newsletter. At the same time, re-energize your veterans with fresh challenges. Different customer assignments, added selling responsibilities, new product introductions, new promotional programs, and occasional special assignments can all be highly effective sales performance incentives.
- Motivate novice salespeople with personal investments in their future. Ongoing feedback and appreciation, along with frequent opportunities for training, learning, and development, encourage salespeople to continually grow in their jobs. Regular career planning meetings with managers keep salespeople motivated and focused on their future with the company. When a salesperson feels valued and secure in a company, especially in an uncertain sales climate, that’s a powerful incentive to achieve winning results.
Adapted from BUILDING A WINNING SALES FORCE: Powerful Strategies for Driving High Performance by Andris A. Zoltners, Prabhakant Sinha, and Sally E. Lorimer (AMACOM 2009).
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