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How to Retain and Motivate Sales Reps: Money versus Happiness

All sales leaders want to motivate reps to high levels of performance and retain their top earners. What’s the secret to success in these areas?

To find out, you might start by asking sales reps what they want in exchange for their hard work. And one of the first things they’re likely to say is higher commissions and bigger bonuses.

In some ways, this makes sense. Everyone wants a stable income and to be able to provide for themselves and their families. And because salespeople are competitive, they typically appreciate benchmarks to measure how they’re doing, and money is an easy indicator to look at. If they’re making $10k more this year than last year, they feel like a success. If they can finally afford to buy big-ticket items (cars, clothes, gadgets) they feel like everyone else knows they’re a success, too.

It is one thing to be motivated by money, but it’s another to use money as a means to happiness, fulfillment, and meaning. While sales reps don’t always talk about these things, these factors have a big influence on their decision to stay with your company or start looking around for the next opportunity.

Science suggests that, past a certain point, money does not make us any happier. This video from AsapSCIENCE points out that people generally adapt quickly to higher levels of income. Research has shown that, in North America, income beyond $75,000 has no impact on our levels of daily happiness.

If you believe that part of keeping reps motivated means keeping them happy, then maybe it’s time to stop relying so heavily on cash as an incentive.

Reps will always appreciate your help in getting to the next level financially. But if you help them learn to define success and happiness outside of money, that creates a valuable dynamic of trust and support. Those qualities can actually become your competitive advantage — companies that have deeper pockets to pay blowout commissions will be less of a threat to poaching your reps.

In fact, there is evidence to uphold the idea that money is not the greatest long-term strategy for keeping reps around. The fact that money can be fleeting might be something that older and wiser reps learn to understand on their own — Peak Sales Recruiting points out that, over the course of a sales rep’s career, research has shown that higher earners report lower levels of interest in more money.

Money comes and goes, but the value of strong relationships never fails. As a sales leader, what steps are you currently taking to motivate and retain your reps, beyond using money?

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Insight for More Excellent Sales Management in 2013

This week Inc.com announced that bad managers cost the economy $360 billion in lost productivity annually. Hopefully, your sales managers aren’t making any personal contributions to this statistic. Either way, we thought it couldn’t hurt to assemble some collective insight for better sales management as we move into 2013.

ONE: Understand the skill set of a good sales manager, and fill the role accordingly.

Many sales managers were promoted from the position of sales rep. This isn’t a great idea. In fact, Peak Sales Recruiting says there are at least six basic reasons to NOT promote a top-performing rep to a position as manager. Jonathan Farrington, a globally recognized sales thought leader, agrees — as he points out, the successful attributes of a sales manager usually don’t align with the successful attributes of a top performing rep. Make sure you’re hiring sales managers based on management skills, and not solely on a track record of sales success.

TWO: Make sure your sales managers are practicing good coaching habits. 

A pre-call briefing, a ride-along to observe the sales call, and a post-call coaching session are all best practices for coaching recommended by Norman Behar at Sales Readiness Group. Are your sales managers actively involved in these activities? Or are they too busy running from one fire to the next as the end of each month and each quarter looms large? If your managers don’t know how to coach (or are simply not making time for it), you’re almost certainly cultivating discontent among your reps. So perhaps it’s no surprise that research from Oracle (quoted by Chuck Penfield at the most recent Sales & Marketing 2.0 Conference in San Francisco) has indicated that 89% of sales reps want more coaching from their managers.

In a Sales 2.0 world, managers who aren’t invested in coaching are going to lose out on the rewards you can reap by combining science with soft coaching skills. According to PI Worldwide President and CEO Nancy Martini, who also spoke at the Sales & Marketing 2.0 Conference, the ability to combine analytics with coaching holds unprecedented opportunities for sales managers to build more effective and productive sales teams that generate higher revenue. Clearly, coaching is a vital aspect of sales management and should not be ignored.

THREE: Make sure sales managers aren’t letting underperforming reps linger.

Christopher Cabrera, CEO of Xactly Corporation, recently blogged about his company’s joint research project with MIT which is examining data related to about 200 million transactions handled by Xactly each month. One early takeaway from initial analysis is that sales managers are probably hanging on to bad sales reps for longer than necessary. To quote from Cabrera’s post:

Our hypothesis is that many managers, if on the borderline of attaining their quotas, tend to keep low-performing salespeople on the books for too long. Those managers would rather keep underperformers on the books to generate even a few sales rather than the guaranteed zero sales they’d get if they fired the bottom tier.

This can obviously be a difficult call for a sales manager to make — and an even more difficult conversation to have once the reality sets in. But after you’ve done all you can to give lagging reps a leg up, it’s better to face the problem head on than to sweep the problem under the rug.

FOUR: Embrace the virtual meeting.

Based on her in-depth survey of 150 managers, Yael Zofi, founder and CEO of AIM Strategies told Selling Power magazine that “virtual teams are here to stay.” In fact, at least 70 percent of those she surveyed reported seeing a rise in virtual teams. Obviously, the virtual element of management has some very basic implications for process and operations. For example, take your weekly sales meetings. Are your sales managers holding frequent and regular meetings with field sales reps, no matter where they’re located? Your sales managers should be using video conferencing tools (like PGi’s iMeet, for example) to facilitate more effective and collaborate meetings, no matter where meeting participants are located.

Incidentally, if sales managers are already making use of video conferencing for meetings with reps, then it stands to reason that reps can use the same technology to meet with customers and prospects as well. That sets up your sales manager to increase team productivity and possibly win rates.

In the end, a bad sales manager adds up to a dysfunctional sales team populated by unhappy reps. And unhappy reps will only stick around for so long — the same Inc.com infographic shows that 65% of employees said they’d take a new boss over a pay raise.

Consider, too, that the workforce is fast becoming populated by Gen Y workers, who tend to prefer feedback from coaching and collaborative work environments. An investment in upping your standards for sales managers will put you on the path to success now and for years to come.

What are your best practices for sales management? Share your thoughts in the comments section. 

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Stop Hiring the Wrong Sales Reps

According to Peak Sales Recruiting, the cost of adding the wrong salesperson to your team can total nearly seven times the annual salary for the position. Yikes!

How can sales leaders mitigate the danger of making an unwise hiring investment? One of the best ways to find out what’s really behind a stellar resume and great interview skills is to talk with people the rep has actually worked for or with.

That’s why some companies are now using confidential electronic surveys to gather feedback on candidates from multiple sources (such as managers, peers, and direct reports).

Many sales leaders might have felt burned in the past by glowing recommendations that turned out to be pie-in-the-sky endorsements, but the confidential nature of such surveys inspires candid feedback, say the folks at SkillSurvey. They have long believed that traditional phone reference checks are outmoded and insufficient to give sales managers a truly objective look at a candidate’s past performance.

Their automated survey is designed to provide a “360-degree” assessment of a candidate’s behaviors, skills and developmental needs — and the confidential request for feedback works: more than 85 percent of references respond to a reference request when the request guarantees anonymity.

When soliciting feedback from references, SkillSurvey asks about a candidate’s:

  • Ability to consistently meet or exceed sales goals.
  • Persistence when faced with objections or other setbacks.
  • Competencies in managing post-sale relationships.
  • Determination in locating qualified sales opportunities.
  • Ability to leverage technology (like CRM) for productivity.

To learn more about how how to efficiently and accurately assess potential sales hires for your team, join us on Wednesday, October 25 (2-3 PM Eastern) for a live Webinar, “How to Avoid the High Cost of a Bad Sales Hire.” Selling Power founder Gerhard Gschwandtner will be hosting, and panelist Jack Kramer, Vice President of Field Operations at SkillSurvey, will be sharing insight and expert tips.

 

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5 Important Blog Posts for Sales Leaders

Busy week with your sales team? We thought so. Here are links to five great blog posts you might have missed in the past week, related to topics especially important to sales leaders (including compensation, motivation, social selling, Sales 2.0, and the new B2B buyer cycle). Happy reading!

Blog Post #1: The smart way to motivate, reward, and compensate sales reps (via Sales 2.0 Conference blog)

Have transparent payout information. Salespeople shouldn’t worry if last week’s deal will be in their paycheck or not. If they can see the deal is credited toward their payouts, they can focus on the next one. According to Zuora, it’s a “dispute killer.”

Blog Post #2: Know your B2B buyer cycle (via Sales 2.0 Conference blog)

Here are three basic questions that sales leaders should be able to easily answer about today’s buy cycle:

  1. How well can your sales team build relationships with customers via a variety of channels?
  2. How well does your sales process map to the buy cycle?
  3. How empowered are your reps to have compelling and relevant conversations with qualified prospects online?

Blog Post #3: Saying goodbye to the good old days of selling (via Selling Power blog)

I have always believed that selling is an art. Today, however, no sales leader can afford to ignore science. Sales 2.0 and technology solutions are making the art of selling measurable in actual numbers. And that is going to have a huge effect on the way we lead sales teams in the years to come.

Blog Post #4: Communicating value to prospects (via Heinz Marketing blog)

Many companies include examples of the problem in their sales presentations, and wonder why prospects don’t immediately light up.

Your prospect isn’t going to buy unless the cost of changing is lower than the cost of doing the same. Isolated, anecdotal evidence doesn’t change that value equation. But communicating the scope of the problem very well may.

Blog Post #5: The effect of social on enterprise selling/thoughts on Marc Benioff’s keynote at Dreamforce (via Sales 2.0 Advocate blog)

As your customers, employees and partners become increasingly connected online, this raises some interesting questions, opportunities and risks in regards to trust:

  • Will we have some kind of open and universal access to ratings and reviews for B2B sales and service professionals as we now see on consumer Internet sites for professionals like doctors? Will enterprise products – and the companies that produce them – be subject to a proliferation of eBay or Yelp-like reviews?
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VPs of Sales: Challenge Your Managers to Think Differently About Sales Productivity

status-quo.jpgNo one ever said that you had to be an Einstein to run sales, but his thoughts do apply: “Insanity is doing the same thing, over and over again, but expecting different results.” Yet many sales leaders seem to accept living with the insanity of sales ineffectiveness, or sales enablement programs that lack focus.

These sales leaders don’t know how to challenge their HQ team to change the status quo. If you run sales, take this as an opportunity to challenge your team to think differently. Here are five questions to ask.

1) “Tell me your plans for onboarding and sales training/enablement?”

What’s the first thing that your marketing and product managers will mention? If they respond with something about new product capabilities, it’s backwards. We guarantee the results will be out of alignment, and will not be well received by the field sales team.

Bottom line: if you don’t have a single sales-led definition of the strategy and the outcome, go and get one.

2) “Whose journey are we on?”

Progressive sales teams don’t just think about sales process; they start by thinking about their buyer’s journey. At a minimum, it’s a progressive engagement model. Properly adapted, it’s a sales culture change that matches 2012 reality and means better selling results, less waste, and a far better way to organize your training and content.

Bottom line: if you don’t have a well defined buyer’s journey, and then properly map your sales process to it, then get your top field sales practitioners in the room with your sales ops and marketing leadership and develop one.

3) “Do John and Jane know when to ‘go/no go’?”

Do your average sales reps understand what they need to discover and discern, and how this relates to the key “go/no go” decisions they need to make at each stage in the buyer’s journey? Sometimes the best decision might even be to disengage and nurture for the future. Top performing reps intuitively get this and mediocre ones don’t. Therefore, mediocre reps struggle, believing every deal is worth winning. Again, it’s simple. Knowing what you need to know and what you don’t at each stage for “go/no-go” can dramatically improve your sales effectiveness.

Bottom line: get your best reps into a room and ask them to map their “go/no go” decisions against your buyer’s journey. Then bake this into your sales process and ask your sales managers to instill this discipline into their forecast calls.

4) “What sales capabilities are we missing?”

Play “find the missing sales capabilities” with your best people. When critical sales capabilities are not well developed, they prevent your team from engaging, closing bigger deals, or compressing the sales cycle. A hint: less is more.

Bottom line: identify the top three sales capabilities that are the common denominators within your best performers. Then ask your sales managers – does our sales enablement address these? It doesn’t? Perhaps it’s time to send you to pasture.

5) “How well do we coach?”

You probably have multiple levels of sales management. Ask yourself: “What impact do these coaches have on our overall selling effectiveness, and where are my coaches?” Hard experience as professional coaches has taught us that any program where we can’t find committed manager-coaches is flawed.

Bottom line: get your top coaches into a room and ask them how they’re improving performance and how can you help. Document the responses, coach the lesser coaches, and bake it into the performance review process. John Wooden would approve.

Steve Crepeau
Steve Crepeau and Jeremy Barnish are panelists on the “Challenge Your Company to Think Differently about Sales Enablement” breakout session at the Sales & Marketing 2.0 Conference this October in San Francisco. For a copy of his book, Effective Enterprise Sales Enablement, email him at screpeau@truesalesresults.com.