Part V

SALES FORCE LEADERSHIP

Part V

SALES FORCE LEADERSHIP

Chapter 11:Chapter 11:

Motivating Motivating SalespeopleSalespeople

Motivation:Motivation:

Learning Objectives:Learning Objectives:

Define motivation and explain sales management concerns with motivation.

Tell how and why individuals needs may differ. Describe a basic model for the motivation

process. Discuss the different types of quotas and the

administrative issues involved in using quotas. Describe how to design incentive and

recognition programs and their limitations.

Chapter Outline:Chapter Outline:

What is Motivation? A Model of Motivation. Quotas. Incentive Programs. Recognition Programs.

What is Motivation?What is Motivation?

Drive to initiate an action.

The intensity of effort in an action

The persistence of effort over time.

Frequent rejection

Physical separation from company support

Direct influence on quality of sales presentation

Indirect influence on performance

Reasons for Motivating Reasons for Motivating SalespeopleSalespeople

Individual Needs:Individual Needs:Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs

Self-ActualizationSelf-Actualization

Self-EsteemSelf-Esteem

Love-BelongingLove-Belonging

Safety-SecuritySafety-Security

PhysiologicalPhysiological

Intense job challenge, full potential, full expression, creative expansion.

Achievement, respect, recognition, responsibility, prestige, independence, attention, importance, appreciation.

Belonging, acceptance, love, affection, family and group acceptance, friendships.

Security, stability, dependency, protection, need for structure, order, law, tenure, pension, insurance.

Hunger, thirst, reproduction, shelter, clothing, air, rest.

Maslow’s Needs & Related Maslow’s Needs & Related Sales Force MotivatorsSales Force Motivators

Maslow’sMaslow’sHierarchyHierarchyOf NeedsOf Needs MotivatorsMotivators

SELF-ACTUALIZATION

Challenging tasks calling for creativity

ESTEEM Recognition programs

BELONGING President’s Club $1 million

SAFETY & SECURITY

Job security and fringes

PHYSIOLOGICAL Cash wages and bonuses

Career StagesCareer Stages

Does everyone go through these stages?

What can be done to address the concerns of salespeople at each stage?

Exploration StageExploration Stage

Motivational Needs– Learning the skills required to do the job well.

Manager Role?– Reinforce accomplishments

– Spend time with salesperson

– Discuss long-term benefits of working for the organization

Establishment StageEstablishment Stage

Motivational Needs– Use skills to produce results, increase job autonomy

Manager Role?– Provide high rewards for high achievers

– Have salespeople recognize success has somethingother than promotion

Maintenance StageMaintenance Stage

Motivational Needs– Develop a broader view of work and organization,

maintain a high level of performance

Manager Role?– Challenge salespeople to use their knowledge in new

ways

– Introduce significant rewards for mastering new challenges

Disengagement StageDisengagement Stage

Motivational Needs– Establish a stronger self-identity outside of work,

maintain performance level

Manager Role?– Maintain focus on personal goals and importance of

organizational citizenship behaviors (e.g., being a role model, assist in other aspects of the organization)

Career Stage Effects on Career Stage Effects on SatisfactionSatisfaction

Select Research Findings:Select Research Findings: All stages are least satisfied with

promotion and pay– However, pay satisfaction is only dimension on which

disengagement salespeople are more satisfied than establishment or maintenance salespeople

Maintenance salespeople are less satisfied with supervision than are establishment salespeople

Disengagement as well as maintenance occurs quite early for some people -- Is this a management concern?

AgeAge RangeRange

20 30 40 50 60 65

Overlap of Ages on Career Overlap of Ages on Career StagesStagesCareerCareerConcernsConcerns

Proportion Proportion of of Sales ForceSales Force

Exploration 14%

Establishment 29%

Maintenance 42%

Disengagement 15%

Figure 13-4:Figure 13-4: Career Stage Career Stage CharacteristicsCharacteristics

ExplorationExploration EstablishmentEstablishment MaintenanceMaintenance DisengagementDisengagement

Career Career ConcernsConcerns

Finding an appropriate occupational field.

Successfully establishing a career in a certain occupation.

Holding on to what has been achieved; reassessing career, with possible redirection.

Completingone’s career.

Motivational Motivational Needs Job Needs Job RelatedRelated

Learning the skills required to do the job well.

Becoming a contributing member of an organization.

Using skills to produce results.

Adjusting to working with greater autonomy.

Developing broader view of work and organization.

Maintaining a high performance level.

Establishing a stronger self-identity outside of work.

Maintaining an acceptable performance level.

Personal Personal ChallengesChallenges

Establishing a good initial professional self-concept.

Producing superior results on the job in order to be promoted.

Maintaining motivation, though possible rewards have changed.

Facing concerns about aging.

Acceptance of career accomplishments.

PsychologicPsychological Needsal Needs

Support Peer acceptance Challenging position

Achievement Esteem Autonomy Competition

Reduce competiveness

Security Helping younger

colleagues

Detachment from the organization and organizational life.

Giving Status to Giving Status to SalespeopleSalespeople

1. Compensation - exceed first-line managers

2. Job Title - no cost but considerable payback

3. Company Car Upgrade - salespeople spend much time in carreminds them of their value.

4. Car Phone –- justified on a purely business basis

Giving Status to Giving Status to SalespeopleSalespeople

5. Field Sales Council - meet president for 1/2 day open-ended discussion on field marketing conditions - report back to field meetings the results

6. Outside Secretarial Support - or more exclusive central.

7. Published Success Stories - high form of recognition

8. Task Force Assignments - e.g., review of all paperwork.

Figure 11-5:Figure 11-5:

Model of MotivationModel of Motivation

EffortEffort PerformancePerformance RewardsRewards

InstrumentalityInstrumentalityLikelihood that greaterLikelihood that greaterperformance will leadperformance will leadto more rewardsto more rewards

ExpectancyExpectancyLikelihood that increasedLikelihood that increasedeffort will lead toeffort will lead togreater performancegreater performance

ValenceValenceImportance of receivingImportance of receivingmore of certain rewardsmore of certain rewards

A Model of Motivation:A Model of Motivation:

Effort-Performance Relationship. Performance-Reward Relationship. Importance of Rewards.

Expectancy Theory SystemExpectancy Theory System

EXPECTANCYEXPECTANCYLikelihood increasedeffort will lead togreater performance

INSTRUMENTALITYINSTRUMENTALITYLikelihood greaterPerformance will leadto more rewards

VALENCEVALENCEImportance of receivingMore of certain rewards

REWARDREWARDPERFORMANCEPERFORMANCEEFFORTEFFORT

Motivation ToolsMotivation Tools

Self-Management

Chapter 11Chapter 11

QuotasIncentiveprograms

RecognitionPrograms

What areWhat arethe differentthe differenttheories oftheories ofmotivation?motivation?

Why the Why the concernconcernfor sales for sales forceforcemotivation?motivation?

Self-ManagementSelf-Management

Behavioral Self-Management (BSM).

Self-set goals.

Why Use QuotasWhy Use Quotas

1. Help motivate salespeople.2. Direct where to put effort.3. Provide standards for evaluation.

1. Sales volume1. Sales volume in dollar or point system Points allow for different weights for different

important products independent of price. Points not affected by inflation. Sales quota may be developed for:

– Total territory sales, and/or– Individual product or product group.

Various Types of QuotasVarious Types of Quotas

2. Profit-based 2. Profit-based quotas are rarely based on bottom line profits Difficult to account for indirect expenses Profits are usually configured as gross margins

minus some load factor

3. Activity-based 3. Activity-based quotas are based on activities directly related to sales volume More directly under control of the salesperson Biggest problem is falsification of call reports Issue of quantity vs. quality of activity?

Figure 13-7:Figure 13-7:

Use of the Various Types of Use of the Various Types of QuotasQuotas

60%60%

55%55%

32%32%

14%14%

14%14%

28%28%

Sales Volume Quota

Profit-based Quota

Activity Quota

Large firms’ Sales > $40M Small firms’ Sales < $40M

Incentive Program Incentive Program DecisionsDecisions

What is Incentive Program?

What is difference from regular compensation such as commission?

Key decisions Goals and Timing. Prizes. Administration Issues.

What is difference between

Incentive Incentive and Recognition Recognition programs

Types of Incentive AwardsTypes of Incentive Awards

Used by 168 FirmsUsed by 168 Firms

Type of AwardType of AwardPercentage ofPercentage of

Firms UsingFirms Using

Cash 59%

Selected Merchandise 46%

Merchandise Catalog 25%

Travel 22%

Recognition Programs:Recognition Programs:

What is Recognition Program. Pace-Maker Conference. Top Honors Conference. Walter Wheeler Award.