Part V SALES FORCE LEADERSHIP Chapter 11: Motivating Salespeople

Motivation:

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

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 Salespeople

Individual Needs: Maslow’s Hierarchy of Needs Self-Actualization Self-Esteem Love-Belonging Safety-Security Physiological  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 Sales Force Motivators Maslow’sHierarchy Of Needs Motivators 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 Stages Does everyone go through these stages? What can be done to address the concerns of salespeople at each stage?

Exploration 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 Stage Motivational Needs – Use skills to produce results, increase job autonomy Manager Role? – Provide high rewards for high achievers – Have salespeople recognize success has something other than promotion

Maintenance 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 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 Satisfaction 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?

Age Range Overlap of Ages on Career Stages CareerConcerns Proportion of Sales Force Exploration 14% Establishment 29% Maintenance 42% Disengagement 15%

Figure 13-4: Career Stage Characteristics ExplorationEstablishmentMaintenanceDisengagement Career Concerns 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. Completing one’s career. Motivational Needs Job Related 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 Challenges 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. Psychological 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 Salespeople 1.Compensation - exceed first-line managers 2.Job Title - no cost but considerable payback 3.Company Car Upgrade - salespeople spend much time in car reminds them of their value. 4.Car Phone – - justified on a purely business basis

Giving Status to Salespeople 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: Model of Motivation EffortPerformanceRewards Instrumentality Likelihood that greater performance will lead to more rewards Expectancy Likelihood that increased effort will lead to greater performance Valence Importance of receiving more of certain rewards

A Model of Motivation: Effort-Performance Relationship. Performance-Reward Relationship. Importance of Rewards.

Expectancy Theory System EXPECTANCY Likelihood increased effort will lead to greater performanceINSTRUMENTALITY Likelihood greater Performance will lead to more rewardsVALENCE Importance of receiving More of certain rewards REWARDPERFORMANCEEFFORT

Motivation Tools Self- Management Chapter 11 Quotas Incentive programs Recognition Programs What are the different theories of motivation? Why the concern for sales forcemotivation?

Self-Management  Behavioral Self-Management (BSM).  Self-set goals.

Why Use Quotas 1.Help motivate salespeople. 2.Direct where to put effort. 3.Provide standards for evaluation. 1. Sales volume 1. 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 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: Use of the Various Types of Quotas 60% 55% 32% 14% 14% 28% Sales Volume Quota Profit-based Quota Activity Quota Large firms’ Sales > $40M Small firms’ Sales < $40M

Incentive Program Decisions  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 Recognition Incentive and Recognition programs

Types of Incentive Awards Used by 168 Firms Type of Award Percentage of Firms Using Cash59% Selected Merchandise46% Merchandise Catalog25% Travel22%

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