Not every employee is capable of selling products or services to potential customers. The selling process requires an employee to possess a particular set of interactive and persuasion skills, as well as a compatible personality profile (garrulous, self-confident, unafraid of rejection, etc.). While some employees enjoy the challenge, most want no part of it and only a minority are neutral about the idea. For those tasked with a selling job, it’s typically a reflection of individual personality that would generate success or struggle.
For compensation practitioners, having the right person involved in the selling process can be more important than the compensation program itself, because dangling potential rewards in the face of the wrong person can be a waste of money and represents lost business opportunity.
It’s All About Motivation
Success in the selling process depends on the right motivating elements aimed at the right employee personality. To do this correctly within a sales compensation program requires the design to take that into account, to focus financial rewards toward whatever engages, whatever motivates the employee to perform in the manner the organization wishes.
Costly mistakes can be made when an organization assumes that all employees will react in the same fashion to the same stimulus.
Have you considered what motivates your sales employees? Chances are that not everyone would have the same answer.
- Money: Everybody’s first response is that all you have to do is offer the opportunity for a cash bonus and the employees are off and running. But in chasing the almighty dollar, employees could also drive your company in the wrong direction – even off a cliff – because they may take the path of least resistance (difficulty) and greatest financial reward. If those activities fail to align with what the company needs to assure business success, money is not only wasted but used to reward behavior that could be detrimental to the company.
Do you really want to reward the sale of a money-losing or low margin product?
- Mission: Especially prevalent with not-for-profit organizations, many employees have a “fire in the belly” belief in what the organization espouses, be it products, services or awareness. This internal value system often provides motivation enough to ensure concerted efforts. In such a scenario, money is deemed less important (though not dismissed) as a motivator. Employees are already motivated by the worthiness of the organizations mission.
Helping others or helping a cause can be reward enough for some employees.
- Brand identification: If you identify with the organization’s offerings and have a belief in what you are selling, you’re already halfway to becoming an effective sales representative. For these employees the ingrained belief in what they sell is already present; they just need a bit of training.
Employees are proud to be associated with a particular product or service. They’re always wearing the logo shirts and are the organization’s biggest fans.
- Self-motivation: Here the employee possesses an internal reserve of self worth that helps to make excellence its own reward. It’s a state in which success in one’s endeavors is self-fulfilling. The reward system for these employees is often a nice addition, but isn’t necessarily the prime motivating factor.
A certain level of performance would be forthcoming, no matter what financial rewards are offered.
- Challenge: The mindset here is the joy of climbing the hill, especially if there’s a pot of gold at the peak. Similar to self-motivation, some personality profiles relish a good challenge, and if you provide a reward for goal attainment, so much the better.
For such employees, the game is always afoot. They enjoy breaking down barriers, solving problems and grabbing for the brass ring.
- Competition: The fierce desire to be better than others; where winning (which means that others lose) is critically important. Note: such employees might not be effective team players.
Sometimes this motivational factor is less about achieving company goals than simply doing better than other employees. Like a loose cannon, these players may have their own definition of winning, which may not be synonymous with yours.
The takeaway point here is to understand what motivates your employees and then to place your rewards in front of them in a fashion that leads and directs their behavior.
If you design your incentive program with the wrong assumptions about what engages your workforce, you’ll risk missing your targets, misspending your financial assets and perhaps not even achieving the required level of success – regardless of the money paid out in rewards.
Designing A Better Carrot
When putting together the elements of your incentive program it would be worth your effort to focus rewards in a manner that recognizes the type of activity and performance you’re aiming for. That sounds like a simple and straightforward concept, yet is all too often missed by plan designers.
- Change in behavior: Providing an incentive opportunity should hinge on performance that you would not ordinarily receive. Don’t waste money paying extra for what you can gain for free.
- Longer term focus: Building relationships is often just as important as making a quick sale. Repeat and additive sales are much easier to achieve than finding a new customer.
- Worthwhile rewards: If the reward isn’t deemed worthwhile (“why should I put myself out for so little?”) the motivational factor will be diminished – leaving you with only employee self-motivation to rely on. In such a case your incentive plan would be viewed as worthless.
- Reasonable targets: If the employees don’t see their performance targets as “reasonably attainable,” their effort and engagement will suffer. They should have an expectation that they can succeed and that they can reach their target. Without that belief, no incentive plan in the world will be able to stimulate the right degree of motivation.
To motivate sales employees to achieve a win-win solution, where they deliver the right performance and achieve financial rewards while the company achieves operational success, you have to push the right buttons. But always be mindful that it’s not as easy as simply waving a dollar bill.
Chuck Csizmar is the Founder & Principal of CMC Compensation Group,an independent global compensation consulting firm whose expertise lies in helping companies manage the effective and efficient utilization of financial rewards for their employees. He also maintains a popular blog on compensation at his website www.cmccompensationgroup.com.