Addressing Lagging Sales Team Performance: Tips for Increasing Motivation, Thus Improving Performance

Lagging performance amongst the sales team is a serious concern for many organizations. Often, even though goals have been set, many sales team members still do not reach the target goals. It is not unusual for the case to be that the base salary offered to the sales staff is not motivating them to perform. Although the base salary is part of employee compensation, it is not compensation in its entirety. Compensation also includes any rewards given to employees. There are several additional rewards that can be offered to the sales team in order to increase motivation of the members.

Employee Compensation

Employee compensation is often broken down into two categories: direct financial payments and indirect payments. Direct financial payments include items such as wages, incentives, commissions, and bonuses. Indirect payments include items such as paid vacation time, employer-paid insurance, tuition reimbursement, and employer matching of 401K contributions. Incentive programs to help increase motivation may fall under direct financial payments or indirect payments.

Incentive Programs

Companies with lagging sales team performance should consider implementing a sales team incentive program. There are three types of monetary incentive programs that these businesses should investigate. The first program is a commission based program. Commission can be thought of as performance based income. This type of program would provide a base salary for each sales member plus an additional commission payment based upon a percentage of each net sale. Commission checks could be cut on a monthly basis. A commission based program works well for employees who have a high level of financial motivation.

A second incentive program to consider is a bonus program based on end results, such as revenue or profits. The disadvantage of using a revenue based end result program is that it encourages "a single-minded focus on closing deals at the expense of developing prospect relationships, maintaining workforce cohesiveness, or negotiating for the highest price" (Smith, 2005, para. 5). The disadvantage of using a profit based end result program is that it can encourage "salespeople to gold-plate their offerings" (Smith, 2005, para. 7).

A third incentive program to consider is one based on strategic goals. Companies could "provide incentives based on the number of new customers acquired" (Smith, 2005, para. 10) or the number of sales calls per day. This type of program recognizes the effort made by each salesperson, not just the end result.

Contests

Sales contests are another method of motivating the sales team to improve performance. One suggestion would be to "set up a series of small monthly sales contests and then provide for bigger prizes either quarterly, semi-annually, or annually" (Buntic, 2006, para. 4). Prizes could range from merchandise such as gift cards, restaurant certificates, or televisions, to travel awards such as airline tickets to Hawaii. "A recent Maritz Travel Company survey of 2,100 corporate employees who completed an incentive trip showed that 89% agreed that they kept the travel award in mind while working and 91% agreed the chance to earn the trip pushed them to work harder" (The Light Group, Inc., 2004, para. 5). The sales contest provides both a physical reward and the recognition that motivates many people.

Appreciation

Showing appreciation to employees is an important step in increasing motivation which is often overlooked. Compensation and incentives do play a role in employee motivation, but appreciation is also necessary in order to inspire employees. "Salespeople love praise. They also like to be thanked occasionally. There are lots of ways to show someone that they are a valued part of your sales organization" (Ventrice, 2003, para. 13).

Conclusion

Businesses with lagging sales team performance need to determine what actually motivates the members of their sales team. What do they value most? What will provide the motivation to work hard to reach specific goals? A manager who "asks for the opinions of team members on how to improve sales, asks them what they would like as incentives, shows them respect, and trusts them to do the right thing" (Ventrice, 2003, para. 9) will achieve the desired results. Once the company determines which incentives the salespeople desire most, it can work to develop incentive programs based upon these suggestions.

References

Buntic, T. (2006). "Sales Contests and Incentives Can Help Motivate Your Sales Team." Ezine Articles website. URL: http://ezinearticles.com/?Sales-Contests-And-Incentives-Can-Help-Motivate-Your-Sales-Team&id=275725

Dessler, G. (2005). "Human Resource Management." (10^th ed.).Upper Saddle River, NJ: Pearson Prentice Hall.

The Light Group, Inc. (2004). "The Lightline." Incentive Marketing website. URL: http://www.incentivesmotivate.com/news_2004_summer.shtml#2

Smith, T. (2005). "Motivating Through Monetary Incentives." The Wiglaf Journal website. URL: http://www.wiglafjournal.com/Articles/2005/09-16-MonetaryIncentives.htm

Ventrice, C. (2003). "Increasing sales." Transaction World Magazine website. URL: http://www.transactionworld.com/articles/2003/December/salesMgmt1.asp