To address the myths, misperceptions, and misunderstandings about how to fire up sales professionals, let’s start with the most prevalent misguided sales manager tips for motivating sellers.
Maybe you’ve heard that:
- All salespeople are money motivated.
- If you want to sell a new product, you’ll have to add extra spiffs or incentives for sellers.
- The more commission you offer, the more sellers will sell.
- You can spot top sales talent by how money-motivated they are.
- If a salesperson is not money motivated, they’re not “hungry” enough to be at the top.
- Contests and competitions make salespeople sell more.
- A public leaderboard makes salespeople work harder because everyone wants to be on top.
- Awards like a President’s Club appeal to and drive the best salespeople.
- To succeed, you need to hire self-motivated salespeople.
- Good sales managers create a sales culture to keep sellers pumped up all the time.
Money. Spiffs. Contests. Leaderboards. Awards. Go-Team-Go. You’ve probably seen it all and tried most of it. You’ve probably noticed, too, that there are some sellers who don’t seem motivated despite all those efforts.
When asked to boost revenue or focus on a new sales initiative, many sales managers’ Pavlovian response is to come up with an added incentive for sellers. Here are some classic examples:
- A SaaS provider developed an innovative extension. In phase one of the launch, to capitalize on being first to market with this innovation, they wanted to blitz current customers with a special, limited-time offer to add the new features for a very low price. The Sales VP decided to incentivize sellers, too, in an effort to accelerate adoption of the new feature by current customers. He set up a contest and offered a lucrative bonus for every upsell.
- A medical equipment CRO was concerned about the low retention rate on the sales team, especially in one regional office. The sales director there said that turnover was due to stronger competition for talent in this marketplace. The CRO responded by revising the comp plan to give sellers – even new hire sellers – an easier pathway to a six-figure income.
- An energetic sales manager with experience in a fast-paced, B2C, transactional call center was hired to work in a more sedate B2B setting with an inside sales team. She decided to infuse the culture with more energy and added an electronic leaderboard, a bell in the center in the sales floor (to be rung with every sale), and a traveling trophy for Sales VIP of the week. She also implemented morning stand-up meetings to recognize and rally sellers.
In all three scenarios, the solutions – which were meant to motivate sellers – backfired badly. The SaaS company ended up with internal competition and very low profitability after their blitz. Even worse, the sour taste this left for sellers slowed down sales when the full launch to bring in new customers came in phase two. The new comp plan offered in one region caused a ripple effect of issues in other regions and did nothing to improve retention (which was only resolved when management training and moves occurred). The energetic sales manager was stunned that her fun additions were rejected. Sellers refused to ring the bell, barely tolerated the stand-up rah rah meetings, and eventually draped the leaderboard in a sheet.
Why didn’t these tactics work to motivate these sellers? What did these well-intentioned sales leaders do wrong? In short, they just didn’t understand what it is that motivates people.
True or False? All Top Sellers Are Money Motivated
Meta-analysis from 92 quantitative studies, reported in HBR by Tomas Chamorro-Premuzic, found that “Association between salary and job satisfaction is very weak… There is less than 2% overlap between pay and job satisfaction levels.”
This study did not find that salespeople were any different from people in other jobs. Other studies, like one from Objective Management Group drawing from data in 150,000 salesperson assessments, underscores that sellers are not exclusively money motivated. In fact, fewer sellers are money motivated today than in the past. OMG reported “50% fewer salespeople are money motivated today as compared to the findings from 2007.”
You might be thinking, “yeah, but the BEST sellers are money motivated, right?”
There is no data to support that. In fact, the “best” sellers often are not the ones who are paid the most (because they have less experience/tenure, carry fewer “gravy train” accounts, and/or have territories/categories that are less lucrative than others). Despite earning less, some sellers consistently post strong performances. Despite earning more, some sellers post lackluster or inconsistent numbers.
What’s more, if all sellers were money motivated, would they stay with your organization? Chances are pretty good that there are other companies that pay more, and if you’re hiring money-motivated sellers you will always be at risk of losing them to competitors who can out-bid you for talent.
And… do you really want people on your team who are solely money motivated? That money-only focus is the root cause of all the prevailing negative stereotypes about the sales profession! If sellers aren’t, at least in part, motivated to help customers and represent your company well, look out. You’re setting yourself up for some costly blowback when it comes time to renew customers. Of course, by then, your money-motivated sellers will likely be somewhere else wreaking similar havoc.
Something else to consider – motivating with money is not sustainable. How many new, bigger, better incentives can you offer? What will you do when there’s an economic downturn or any external factor that affects sales and commissions? If it’s only about the money, you have to make sure there’s always going to be plenty of it.
So if it’s not money, what is it that motivates sellers? To answer that question, let’s first talk broadly about all employees vs. sales professionals.
In The Why of Work, Dave Ulrich reports that “Non-financial rewards like work flexibility, growth opportunities, access to valued relationships, and positive work environments are frequently at least as important as money in shaping employee meaning.”
These intangibles appear to be even more important for Millennials. CNN Money reported that more than two-thirds of recent grads said they’d rather work for a company that has a “positive social atmosphere” even if it meant accepting lower pay.
Employees leave workplaces where they do not feel valued, connected, and like they can make a positive contribution. Additionally, they want to see opportunities for future growth and learning experiences that prepare them for the future. You can access hundreds of studies and data points about this compilation of research.
Now, back to sellers. Turnover among salespeople, according to a Salesforce Work Study, found that 39% of salespeople do not feel appreciated at work and 70% leave because of poor relationships with their managers. In other words, research about retention and job satisfaction for sellers closely mirrors research with all employees.
If you’d like to hear more about what does (and what doesn’t) motivate sales people, check out this webinar “Not All Salespeople Are Money Motivated and Other Myths about Pay.”
True or False? The Best Sellers Are Self-Motivated
Elsewhere, sales manager tips for motivating sellers usually include a tip to only hire self-motivated sellers. Hiring people who are self-motivated isn’t a bad idea… But that’s not enough, and even the most self-motivated sellers can be affected by external factors.
If you want to hire self-motivated sellers, you’ll need to look a little deeper than their self-assessment of characteristics. Using behavioral interviewing to identify this trait and understand what it looked like in practice for this particular individual.
Be sure you’re not confusing self-motivation with other traits like resilience. Self-motivation means taking the initiative to undertake or continue an activity or task without another person’s prodding or supervision. Resilience means the ability to recover quickly from adversity or disappointment.
Motivation is the state or condition of having a strong reason to act or accomplish something. When we describe others as self-motivated, it means that they do not need an external influence or motive to do something. But that’s completely contrary to what we’ve set up for sellers!
Are we expecting sellers to be BOTH money-motivated (an external influence) AND self-motivated (not needing an external influence)? If we want to hire and retain people who are self-motivated, why do we condition them to be externally motivated with commissions, spiffs, bonuses, contests, awards, recognition, and other incentives?
This is confusing for sellers who may be conflicted by their own self motivators and the ones you’re using to apply pressure or induce action. Worse yet, all those external motivations may be interfering with self-motivation. Here’s why.
This table breaks down the four types of motivation. The first distinction is between external motivation (extrinsic) and internal or self-motivation (intrinsic). Then we must layer in another distinction because some motivators are positive (good outcomes) while some are negative (bad outcomes). This is commonly known as “carrot or stick,” a metaphor to illustrate using rewards or punishments to induce desired behaviors – think of the two ways, carrot or stick, you could get a donkey to pull a wagon.
The four options for motivation, then, are:
- Positive, extrinsic. The carrot or other incentive. This is heavily used in sales.
- Negative, extrinsic. The “or else” ultimatums, real or implied threats and consequences.
- Negative, intrinsic. Personal experiences or distaste, perception of something unpleasant.
- Positive, intrinsic. Personal satisfaction, values, enjoyment derived from experience.
Successful sellers will tell you that they have a strong, intrinsic motivation for working hard and making sales. They take pride in the work, they believe they are helping others, they see success as a personal triumph that is deeply satisfying to them, they have something they want to do with money earned, or they value some other aspect of sales success.
Unsuccessful sellers will tell you that there’s something in the environment or nature of the work that is intrinsically unmotivating. They feel inauthentic, pushy, or dishonest. They feel pressured to do things they don’t believe are right. They are not comfortable making cold calls.
No amount of extrinsic motivation will overcome these internal drivers. The best a sales manager can do is understand and leverage those personal drivers. Helping people see how their own long-term interests and intrinsic motivations are reached will make them more self-motivated.
Incidentally, research shows that the strongest type of motivation is intrinsic and positive. Too much extrinsic motivation can erode intrinsic motivation. As reported in Fast Company,
Emerging research suggests that it is better to focus solely on intrinsic motivation, because deriving any motive whatsoever from external incentives could decrease performance. Yale’s Amy Wrzesniewski and her team followed 11,320 West Point military cadets and assessed their motives for attending the academy over a 14-year period. The researchers made a startling discovery: Cadets who entered West Point because of internal motivators were more likely to graduate, become commissioned officers, receive promotions, and stay in the military compared with those who entered due to external motives. Those cadets who entered with both strong internal (e.g., a desire to lead others) and external (e.g., to get a better job and make more money) motives, however, did not exhibit that same likelihood of success.
This research specifically calls out financial rewards:
“Helping people focus on the meaning and impact of their work, rather than on, say, the financial returns it will bring, may be the best way to improve not only the quality of their work but also–counterintuitive though it may seem–their financial success,” observed Wrzesniewski and her co-author Barry Schwartz.
Yes, you read that right. An emphasis on extrinsic rewards – including financial incentives – can diminish intrinsic motivation and have an adverse impact on sales performance.
Hiring people who are self-motivated is fine. Keeping them self-motivated is another matter.
True or False? Sales Managers Are Responsible for Motivation
There is some truth to this one. Sales managers can tap into intrinsic motivation and magnify it. Or they can overplay attention to extrinsic motivation and diminish the more powerful intrinsic motivators. And, yes, they can allow environments and/or conduct interactions that are downright demotivating.
There are six drivers of workplace morale that surpass pay. All six are related to something that a sales manager can control. This is based on a study by CultureAmp, and similar findings are affirmed by other studies.
Three of the six workplace morale drivers are related to your ability to convey a positive outlook.
- My manager inspires confidence.
- My manager shows faith in me.
- My manager communicates an inspiring vision to me.
The other three factors pertain to the employee’s feeling that the employer is invested in him or her. Of course, the manager is the gatekeeper who makes access possible and communicates the employer’s offerings.
- Good career prospects are evident and achievable.
- The company is making it possible for me to make a meaningful contribution.
- There are appealing opportunities for learning and development.
You may be tempted to challenge this research because it is not exclusive to salespeople. If so, please note that it’s also not exclusive of salespeople. Let’s face it, before they took a sales role, these were just people with the same motivations and interests as any other people.
Sales managers can drive workplace morale and motivation by remaining mindful about these drivers. You can also consider how to intrinsically motivate salespeople.
Unlike extrinsic motivation like bonus plans where everyone has a shot at earning extra moolah, intrinsic motivation isn’t tapped into by a one-size-fits-all approach. It must be individualized.
The only way to tap into someone’s own, personal, intrinsic motivation is by getting to know them. Understanding what “makes someone tick” and what they are working for is essential for truly leading people (vs. merely managing sales).
Genuinely caring and getting acquainted isn’t the same as trying to find someone’s “hot buttons” so you can manipulate them. This is a bit like selling. Before asking anything from your buyers, you took time to discover what their needs were and what would be of value to them. That way, you could offer them the right solution and link it to what they valued so they, too, could see the potential.
You’ll do the same here to motivate members of your sales team. You’ll understand what matters to them and link your requests to that on an individual basis. With one seller, you’ll talk about how transitioning to the new CRM will make them more efficient and able to get home earlier each evening for time with the family. With another seller, you’ll describe how transitioning to the new CRM will make it easier to capture data that improves customer service. You’ll be personalizing your pitch to address the values and needs of each individual.