When Sales Performance Incentives Don't Work

I have often been an advocate of increasing incentive pay and lowing base pay for salespeople in the B2C space. But increasing the portion of income that can be derived from commission won't work for all types of sellers.

Let's look at four different salespeople:

 

> Salesperson 2 is highly skilled at selling, and is also highly money motivated. This person will generally respond well to increased monetary sales incentives.

> Salesperson 4 is not highly skilled at selling, but is highly money motivated. This person will generally not respond well to monetary sales incentives, unless that money motivation motivates the salesperson to develop his sales skills as an intermediary step.

> Salesperson 1 is highly skilled at selling, but is not money motivated. This person will generally not respond well to increased monetary sales incentives.

> Salesperson 3 is not highly skilled at selling, and is not highly money motivated. This person will generally not respond well to increased monetary sales incentives.

Therefore, sales management throwing money at a sales performance problem results in a FAIL for three of the salespeople in our scenarios. Monetary rewards only work for those who are highly motivated to make more money.

Don't get me wrong! I want sales professionals in the business-to-consumer market to earn more money!

To improve the sales of salespeople 3 and 4, management needs to implement sales training that works. To improve the sales of salesperson 1, management needs to identify motivators that will increase performance, as more money clearly will not. It might be: becoming the top salesperson in the organization (ego motivation), being part of a winning team (team motivation), or something else.

If you like this post (or don't) please leave a comment. Skip Anderson is the Founder and President of Selling to Consumers Sales Training. He works with companies and individuals who sell to consumers in B2C, retail, in-home selling, and the financial, real estate, and insurance markets.

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Comments

[Rick S. Pulito]

An interesting point of view, Skip. I have been in the field of behavior change and sales force effectiveness for 25 years, and have never seen the quadrant approach used this way. I like it. In fact, I took the liberty of directing visitors at my blog (http://ideationz.wordpress.com) to your post.
I will be back to visit you again. Pls come by and say "hello" some time!
Cheers,
Rick Pulito

[Dave@davebarnhart.com]

You hit the nail on the head when you said "management needs to implement sales training that works". The problem is that Management in most small- and medium-sized companies doesn't have a clue. Over and over, I hear Managers and CEOs say "If they're hungry enough they'll sell."

"First we must train Management"

[Skip Anderson]

Thanks for your comments Rick and Dave.

Rick, I just visited your blog and subscribed to it. I like you're writing.

Dave, I haven't visited your site yet but will after I hit the POST button for this comment. Your point is very well taken that training of management is often a first step in a successful sales performance improvement initiative. I agree.

Many salespeople are hungry. But only a portion of them are hungry for money. Some are hungry for attention, for recognition, for leadership, to help customers, to be part of a well-functioning team, to be heard, etc. So these sales managers have the hunger part right, but what they don't have right sometimes is the food to feed the hunger: it's not always money.

And, of course, I'm very biased when I say this, but adequate or the correct ales training is also missing element in many of these "if they're hungry enough they'll sell" organizations.

Skip

[makati condos]

What a great point. I agree that not all sales people will be motivated with money. Company's tend to believe that to be able sales people to work more is by increasing monetary incentive. CEO's think that it's the money that works to employees. And I agree when you said "management needs to implement sales training that works."

[Alexander @ Sales Performance]

I agree - First we must train management!

Especially the ones who are involved with small to medium enterprises. These guys quite often become the bottleneck to further growth by being poor managers for not seeking to grow the skills of their salespeople.

To get them to see and acknowledge the error of their ways in such a way as to make them OK with the process, without affecting their ego, is the ultimate key to success here.

It is great reading your posts and comments guys!

Regards

Alexander