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Recently I was speaking with a vice president of sales who explained he was having trouble motivating his salespeople. “They’re just not putting the work in. They’re doing the bare minimum and I can’t seem to do anything to get them going.”
First, when hiring salespeople, you want to hire people who are self-motivated. Just as you can’t teach honesty, integrity, and other key character traits, you can’t teach motivation and you can’t motivate anyone. That said, here are a few ideas to nudge them in the right direction and maybe even motivate them a little.
Keep in mind that the number-one motivator for salespeople is money. While there are some exceptions, the top salespeople — across the board — absolutely have money as their number-one motivator. Of course, your top people also usually come self-motivated too. For the rest of the pack, 90 to 95 percent of them also have money as a top motivator. Because of this, it’s extremely important to structure the pay plan in such a way that the behaviors you want are rewarded with money, and the behaviors you don’t want are not rewarded with money. What gets rewarded gets done. In other words, if you want them chasing new business, pay them handsomely for new business.
While you may need to pay a new sales rep a small base salary or draw until they get going, you want most of a salesperson’s income to come from commissions made on sales. The problem with high base salaries is that if the salesperson is able to live a decent existence just off of the base salary, they’re not going to be motivated to make lots of sales calls. For example, I was working with an insurance agent who was new to sales. He had sold one policy in his first six months and it was to his dad. He would come in a few minutes late and at five o’clock it was like a fire alarm went off— he was out the door quickly. The owner couldn’t figure out why he never seemed motivated to work and wasn’t making any sales. It turned out they were paying him $700 per week salary plus commission. He lived with his parents who also bought him his car and were paying for all his food and everything on the personal side. The agency, in addition to the $700 a week, was paying for his cell phone and gas and other business expenses, including health insurance. So, basically, he had $700 a week to spend going out drinking with his friends. Hmm, I wonder why he wasn’t motivated to work.
Another situation can arise when salespeople get paid on residuals. Once they get to a certain residual income level, these days it’s around $120,000 to $150,000, they go completely into service mode. They stop all new-business activities. Why? They’re comfortable, they’re able to pay the bills and have some money left over. In this case, they need to get paid much less for the residual business, and much more for new business. It’s funny that the salesperson who was servicing their accounts all day, once the pay plan shifts to paying for new business versus old, will completely flip to new business and ignore their customers. Their top-notch customer service, that they demanded their customers needed from them, they now couldn’t care less about. Service goes right out the window. Some will even go as far as saying, “I don’t get paid to service accounts. That’s someone else’s job.” Hmm, short memory.
Sources of Motivation
Ultimately, there are four ways you can attempt to motivate people. External-negative, external-positive, intrinsic, and peer.
My first manager used to use external-negative, or to be more specific he used to say, “If I put a gun to your head, you’d do business.” This is a negative consequence or penalty for not doing something. When motivating underperforming salespeople, a sales manager usually starts with a probation period followed by loss of one’s job for failing to do the necessary work or make quota.
External positive was first and second place in the sales contest in the movie Glengarry-Glen Ross: “First prize: a brand-new Cadillac. Second prize: a set of steak knives.” This is a reward for work done or a goal achieved. This could be $100 for the person who makes the most calls in the next hour or a limo lunch for whoever closes the most business this week. This is not as powerful as the first motivator as generally we respond more to pain but is still a way to get leverage on others. By the way, the third prize in the Glengarry-Glen Ross contest was external-negative: “You’re fired!”
The third motivation source: intrinsic is the most powerful motivation among high achievers. This form has the most potential power and, if strong enough, can be used all by itself. This is the “personal why.” In other words, what are the personal reasons the salesperson needs to be successful? This can be kids and family, it can also be nice cars and houses, or other things money can buy, or it can be darker like someone told them they’d never be successful. You can ask salespeople what their long-term goals are and if they aren’t sure, maybe even make some suggestions: a dream lifestyle, taking care of kids and future generations or parents, to leave a lasting legacy, a combination? Where do they want to be in their career five, 10 or 20 years from now? Ask them: If they had no limits on time or money, what would they have and do with their life? What is their endgame? Do they want to retire and to where?
The final source is peer motivation. This is who the salesperson spends time with personally and professionally. People usually rise to, but rarely above their peer group. “Birds of a feather do flock together.” This also relates to your environment. If you have an office of negative people in which no one is held accountable, any success will be fleeting or completely non-existent. To motivate others, provide a work environment that is successful, positive, and professional and one in which people are held accountable. Have them look at the people they hang out with.
Again, when it comes to motivation, it’s best to hire self-motivated, hard-working salespeople but the reality is, most companies do a poor job of this. Second best is to help them find their intrinsic motivation while also providing some peer motivation by providing a successful, positive, hard-working environment. That said, it’s a good idea to throw in some external-positive motivation from time to time in the form of prizes and rewards. Lastly, you may have to rely on some external-negative motivation as a last resort before you show someone the door.
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