Money, Ego, Fear…

Most sales managers agree that motivating the sales team is an important part of their job. Naturally, there are a number of ways in which people might go about this task. Money, ego and fear are considered the primary motivational tools… except for a certain percentage of sales managers who believe it’s up to the sales people to motivate themselves!

For the rest of us, what might be the best choice?

While most agree the most effective approach involves a “healthy” combination of all three methods, the mix will vary depending upon your personal leadership skills, situation and team composition. Here are a few guidelines:

Money – An Extrinsic Reward
Research clearly indicates that compensation alone is not a sufficient motivator of a sales force – or anyone else, for that matter.

For example, as referenced by Richard Bakosh of Accenture, “financial compensation is analogous to the lowest tier of needs in Maslow’s hierarchy; it is basic and important, but it touches upon only one dimension of motivation, and a comparatively low-level one at that.”

Similarly, in a recent newsletter, Conway Management Company points out that the traditional “carrot & stick” approach to motivation – if you do X, then you will get a bonus/commission/spiff (carrot) or, you will get to keep your job (stick) – is not a long-term solution. In fact, studies show that the impact of such extrinsic rewards wears off over time and, sooner or later, the rewards become expected! At that point the rewards no longer motivate, but their absence de-motivates!

Even discretionary rewards or bonuses can backfire. Bakosh cited examples of how inconsistencies or “black box” components of compensation plans served as de-motivators. When sales people became unsure about the criteria associated with their bonus or commission plan, or about how to interpret formulas or components of these plans, they quickly lost trust in both the company and their managers.

Ego – Belief in a Job Well-done
If fundamental motivators such as compensation are at the lower end of Maslow’s hierarchy of needs, then maybe managers should look for motivational strategies at the upper extremities – the areas associated with success. Sales people tend to thrive on success.

Two such areas are the need to belong and feel a part of a group, and the need to be held in esteem and receive recognition.

It is important to recognize that, while the esteem associated with recognition by management is an important motivational factor, the recognition from a peer group is also critical to motivating the sales force. Sales managers can make good use of these motivational tools by publicly recognizing achievement or desired behaviors during sales meetings or team conference calls. This presupposes, of course, that team meetings are a regular component of the sales management system (see related article).

At the top of Maslow’s list we have “self-actualization,” something he often called a “growth need”—“striving to live up to one’s potential,” Barkosh explains. His research revealed two key principles associated with this need:

  • First, people are motivated to satisfy the lowest level of unmet need
  • Second, a satisfied need cannot serve as a source of motivation; for example, a starving person can be motivated by the prospect of attaining food, but a well-fed one cannot

This might indicate that “one’s potential” needs to be a moving target, and that sales managers are better off focusing on promoting success as opposed to carrots and sticks.

Author Jeff Ernst refers to this concept as The New Rules of Sales Enablement, a theory that is based on enabling sales professionals to maintain high levels of motivation by providing the necessary infrastructure and an environment in which they can succeed.

His perspective is consistent with Barkosh’s, which revealed that sales enablement tools such as reducing quote cycle times, getting better documentation and developing a product that is more easily differentiated and therefore easier to sell  were among the things that motivated salespeople the most, because they promoted success.

Along the same lines, it is equally as important for sales managers to promote a belief among sales people that the job can, in fact, be done and that they are capable of doing it and doing it well.

Possibly Zig Ziglar summarized this concept best when he said, “A lot of people have gone further than they thought they could because someone else thought they could.”

Fear  Bottom of the Barrel…?
Finally, we have the concept of using fear as a motivator, which might be looked upon as a double-edged sword.

While the “stick” has proven to be among the least-effective motivational tools, and one that often retains “C players” and repels “A players,” fear of loss can be a strong motivator. This fear is not associated with a form of punishment or ridicule, but is typically associated with “not” achieving a desired level of success. Examples might include the fear of “not” making President’s Club, the fear of losing a customer or the fear of losing the respect of one’s peers or management.

In summary, the research referenced above is consistent with our observations over the past decade. The best motivators are those who recognize financial incentives alone cannot inspire positive attitudes or bring about the behaviors necessary to achieve sustainable growth and staff loyalty; those who are able to incorporate trust, self-esteem, social recognition, strategic communication and enablement into their motivational strategy.

And for those who don’t believe in the importance or effectiveness of motivation, we’ll refer once again to a well known Zig Ziglar sound bite, “’People often say that motivation doesn’t last. Well, neither does bathing–that’s why we recommend it daily


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