Motivating Salespeople

Brendan Sigler

Motivating Salespeople

Central Idea

The article “Motivating Salespeople: What Really Works” describes the different tactics used by management to increase sales amongst salespeople.  The authors group salespeople into different segments just like marketers do to different companies. There are stars, core performers and laggards. They then discuss different ways to increase sales with the different groups and how it may affect other salespeople.

Reasons

This article was written for managers of marketers that want to increase the sales amongst different groups of salespeople. While offering incentives to salespeople seems like an obvious way to increase sales, it may not affect the salespeople that need targeted. For example, offering a multi-tiered system can promote more competition from core performers of your organization by offering them a chance to make more money by selling more than the quota determined by a business. However, the authors state that it may not improve sales from the laggard group as they do not care about moving up to the next tier and stars will not benefit much either because they always assume they will be in the top tier of sales.

Another reason this article was written was to show managers that different people are motivated by different incentives. While offering more vacation seems to be a good way to motivate sellers, some salespeople may not care as much about vacation as they do making more money or intrinsic motivation through friendly company competition.

Major Points

• Motivate Core Performers

Core performers usually make up a majority of salespeople in a firm and thus need to be rewarded for their efforts. Overachievement commission rates are one of the most important to core performers. The multi-tier approach of payment is a good way to motivate these sellers. Offering only two tiers was proven to discourage core performers because a majority of them cannot make the top tier and as a result are less likely to continue trying as hard if they know they will not make it. Adding in multiple tiers helps this problem by giving salespeople a chance to earn more money as they sell more without discouraging core performers.

Offering prizes can also motivate core performers but this must be done very carefully. Prizes would normally go to stars but if multiple prizes are offered for different groups of salespeople then there is an incentive to sell more. This can also create competition between the salespeople which, if done without ruining corporate culture, can motivate core performers to move into the star classification.

• Motivate Laggards

Quarterly bonuses was found to be a way to increase productivity of laggards. These bonuses were found to be a good way to keep constant or increased performance from laggards. Laggards needed a constant bonus to keep them performing at a reasonable level. This constant gratification received is very important.