Part V

SALES FORCE
LEADERSHIP

Chapter 11:

Motivating
Salespeople
What is Motivation?

 Drive to initiate an action.

 The intensity of effort in an
action
 The persistence of effort over
time.
Reasons for Motivating
Salespeople

 Frequent rejection
 Physical separation from company
support
 Direct influence on quality of sales
presentation
 Indirect influence on performance
What Goals are Most
Important?

Expand Visibility 43.9%

of Sales

Increase 66.1%
Sales Revenue

Enhance Company
31.9%
Credibility

Build the Brand 29.8%

0 20 40 60 80
How Successful Were You at
Reaching Your Goals?

Expand Visibility 35.7%

of Sales 64.7%

Increase 27.9%
Sales Revenue
72.1%

Enhance Company 41.9%

Credibility
58.1%

Build the Brand 31.8%

68.1%

Most Successful Least Successful

 Maslow’s Hierarchy of
Needs
 Intense job challenge, full potential,
Self-Actualization full expression, creative expansion.
 Achievement, respect, recognition,
responsibility, prestige,
Self-Esteem independence, attention,
importance, appreciation.
 Belonging, acceptance, love,
Love-Belonging affection, family and group
acceptance, friendships.

 Security, stability, dependency,

Safety-Security
protection, need for structure,
order, law, tenure, pension,
insurance.
Physiological
 Hunger, thirst, reproduction,
shelter, clothing, air, rest.
An Exercise to Determine
Your
Motivational Needs
To perform the exercise, read through the following statements…check those which are most
important in motivating you to do your best work. Select the ten most important
statements.

629 Job security

847 Being trusted to do my job the way I think it should be done.
333 Participating in work group conversations.
311 Having adequate shelter to protect from the elements.
836 Having a job which allows me time with my family.
151 Having an opportunity for personal growth.
937 Socializing with my friends.
743 Being considered for an advancement opportunity.
431 Working with other people.
819 Having children.
458 Doing something meaningful with my life.
757 Being in a position to contribute new ideas.
828 Having an associate that looks out for my interests.
735 Including other people in what I do.
949 Being selected for an exclusive award.
234 Being involved with work associates in social and recreational activities.
616 Being sexually satisfied.
146 Having a responsible person tell me when I’ve done a good job.
539 Having an active part in work related social activities.
341 Knowing that other people respect me and my work.
132 Acceptance as a work group member.
Your Score
To Determine Results:
The statements are divided into five categories
intended to represent the five levels in Maslow’s
Hierarchy of Needs. The second digit in each
statement number indicates the category. These
categories are:

4. Physiological,
5. Safety-Security,
6. Love-Belonging,
7. Self-Esteem,
8. Self-Actualization.

Count up the number you have in each category then

calculate the percentages for each category. The
categories with the highest percentages would be
your personal motivational drivers.
Maslow’s Needs & Related
Sales Force Motivators
Maslow’s
Hierarchy
Of Needs Motivators
SELF-  Challenging tasks calling for creativity
ACTUALIZATION

ESTEEM  Recognition programs

BELONGING  President’s Club $1 million

SAFETY &  Job security and fringes

SECURITY

PHYSIOLOGICAL  Cash wages and bonuses

Chinese Culture
Hierarchy of Needs

Self-actualization
in service to
society

Safety

Physiological

Affiliation (belonging)
Maslow’s Hierarchy

U.S. SALESPEOPLE’S RESPONSES

Number Percent Number Percent
847 86% 431 51%
955 80% 654 40%
341 74% 722 39%

352 66% 836 37%

256 63% 458 37%

559 57% 853 37%
757 54% 718 34%
Comparison of Motivators and Hygiene
Factors Percentage Frequency
Low High
Satisfaction Satisfaction
40 30 20 10 0 10 20 30 40

Hygienes
 Policies
 Tech. Supervision Motivators
 Salary  Achievement
 Interpersonal Relations  Recognition
 Working Conditions  Work Itself
 Responsibility
 Advancement
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?
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?
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?
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?
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?
Overlap of Ages on Career
Stages
Proportion
Career
of
Concerns Sales Force
Exploration 14%

Establishment 29%

Maintenance 42%

Disengagement 15% Age Range

20 30 40 50 60 65
Giving Status to
Salespeople
 Compensation
- exceed first-line managers

 Job Title
- no cost but considerable payback

 Company Car Upgrade

- salespeople spend much time in car
reminds them of their value.

 Car Phone –
- justified on a purely business basis
Giving Status to
Salespeople
 Field Sales Council
- meet president for 1/2 day open-ended discussion
on field marketing conditions - report back to field
meetings the results

 Outside Secretarial Support

- or more exclusive central.

 Published Success Stories

- high form of recognition

 Task Force Assignments

- e.g., review of all paperwork.
Expectancy Theory
Example

Suppose you had 360 points accumulated in a particular class

and you needed 450 points to get an “A” for your final grade.

You only have the final left to take (worth 100 points). Plus, you
really didn’t put the effort into studying for the other exams for
this class, but you were in the B to B+ range.

Also suppose, if you get an “A” for the course, your GPA hits
the 3.5 mark, which now makes you eligible to get an interview
with a prestigious firm.
 Expectancy Theory System

EFFORT PERFORMANCE REWARD

EXPECTANCY INSTRUMENTALITY VALENCE

Likelihood increased Likelihood greater Importance of receiving
effort will lead to Performance will lead More of certain rewards
greater performance to more rewards
Expectancy Theory System
 A more complete theory
 Focuses on process of motivation
 Maslow & Herzberg focus on only one aspect of
the process: reward importance
 Systematic approach with multiple reasons for a
lack of greater effort
 Indicates where management should direct its
attention to sales force as a whole or to an
individual
 What may account for a lack of greater effort in
an individual salesperson?
Role Perceptions
 Sales is a boundary spanning
position
- you must be responsive to expectations of multiple
people.
Sales
Company Customers Family
Manager

SALESPERSON’S ROLE PERCEPTIONS

Expectations What do others expect me to do?

Ambiguity How sure am I about what others expect?

Accuracy Is what I think what they really expect?

Does meeting expectations of one person mean not
Conflict meeting the expectations of another?
Role Perceptions

 Typical Sales Job Activities

 Where is their potential for
the following:
– Ambiguity
– Lack of Accuracy
– Conflict
 Typical Sales Job Activities
Job Dimension Activities Activities
SELLING FUNCTION Plan Activities Prepare Presentations
Develop leads Make Presentations
Prospecting Identify Overcome Objections
Decision- Makers Introduce New Products
WORKING WITH ORDERS Write orders Find last orders
Expedite orders Handle shipping problems
Handle back orders
PRODUCT SERVICING Learn about product Train customers
Test equipment Supervise repairs
Supervise installation Perform maintenance
MANAGING INFORMATION Receive feedback Provide technical information
Provide feedback
SERVICING THE ACCOUNT Stock shelves Count inventory
Set up displays Promote local advertising
ATTENDING CONFERENCES Sales conferences Product exhibitions
Client conferences Training sessions
TRAINING/RECRUITING Recruit new reps Train new reps
Travel with trainees
ENTERTAINING Parties Dinner
Drinks Lunch
TRAVELING DISTRIBUTION Out-of-Town In-Town
Sell through Train
Establish relationships Credit
Self-Management

 How do these self-management techniques

relate to the motivation theories -- Maslow,
Expectancy, etc.?
 How will career stages affect this process?
 Devise a self-management technique for taking
more complete class notes.
 Devise a self-management technique for
making more sales presentations for a key
product group- e.g., PCs
 What is the role of management in self-
managing?
A Self-Contract

 Clear detailed description of behavior

targeted
for change.
 How behavior is to be observed, measured
and recorded
 Detail of criterion for reinforcement
 Designates the reinforcement
 Stipulates the negative consequences of
not fulfilling contract
 Sets timing for delivering reinforcement
 Example of a Self-Contract
Date:
Goal: Increase the number of accounts by 10% in the coming year
Agreement
Self: I agree to call on at least three prospective customers each week throughout
the year.
In my call report I will note each new contract made. At the end of the week this
information will
be transferred to a chart posted on my office door.
Consequences
If the contract is kept:
After calling on a new customer I will reward myself with a steak dinner and bottle of
fine wine.
Each week I call on three or more new customers I will reward myself by playing a
round of golf
on Saturday morning. For every new account I secure I will reward myself by playing
an extra
round of golf on Sunday.

If the contract is broken:

If I fail to contact at least three new customers during the week, I will spend Saturday
morning
in the office prospecting for new customers.

Bonus clause:
If I exceed the goal of increasing the number of accounts by 10% before the year is
out, I will
Why Use Quotas

 Help motivate salespeople.

 Direct where to put effort.
 Provide standards for
evaluation.

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 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 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?

Goal Theory Postulates

 Difficult goals, if accepted, will lead to

greater performance than moderate or
easy goals
 Difficult and specific goals, if accepted,
will lead to even higher performance
than general, “do your best” or no goals.
Goal Theory Additional
Factors
 Feedback is necessary for goals to be
effective
 The goal must be personally embraced
 A person who is confident in his/her
ability will outperform someone who is
not confident.
Who am I?

I lost my business (1831)

Defeated for state legislature. (1832)

Failed again in business (1833)

Suffered an emotional breakdown. (1836)

(1838)
Lost election for: speaker
(1840)
elector
(1843 and
congress
1845)
vice-president
(1856)
Elected President 1860
Sales Force Experiment
Percent of Salespeople at or Over
100%
Month Adjusted Non Adjusted
January 44% 57%
February 28% 45%

March 46% 57%

April 55% 56%

May 54% 57%

June 52% 60%

July 53% 60%

Sales Force Experiment --
Conclusions

 Most Universal salespeople are “quota

achievers” not “dollar maximizers”.
 When given a more easily attainable
quota, motivation declines so much they
will be less likely to make lower than
higher quota.
 Set quotas at challenging levels and
attach great significance to attainment
 What salespeople say will likely differ
from what they do.
Incentive Program
Decisions
 What is difference from regular
compensation such as commission?
 Key decisions
− Goals Rules
− Timing Awards
− Participants Publicity
− Theme Cost
 What is difference between
Incentive and Recognition programs
Types of Incentive Awards

Used by 168 Firms

Percentage of
Type of Award Firms Using
Cash 59%
Selected Merchandise 46%

Merchandise Catalog 25%

Travel 22%
Figure 13-7:
Use of the Various Types of
Quotas
60%
Sales Volume
Quota 55%

32%

Profit-based
14%
Quota

28%

14%
Activity Quota

Large firms’ Sales > $40M Small firms’ Sales < $40M
Experiential Exercise
Develop an incentive program for the following company. The report of
the program should include a statement of the purpose of the program,
its budget, and the specifics of the program such as theme, prizes, rules,
timing and publicity.

ABCO Inc. is located in Dallas, Texas. Its sales last year were
$25,750,000 with pre-tax profits of approximately $400,000. Growth has
been steady over recent years, averaging about 10 percent a year.
ABCO manufactures and markets vinyl binders, loose-leaf products, and
index tabs. These products are used as manuals, price books, and
advertisements by their clients. The bulk of ABCO’s sales are to
industrial companies. Some of their major customers include EDS, 3M,
Dr Pepper, and Xerox. Sales in the first half of the year are usually
around 65% of total sales, while sales in the last quarter are usually
about 15-20% of total annual sales. The margins (net sales minus cost
of goods sold) on these products are approximately 40% on average.
The margins are this high because the products are custom designed for
the customer. Depending on the product line and customer situation,
ABCO’s selling cycle will vary from two weeks to three months.
Experiential Exercise
The sales force consists of six women and three men. They are all
located in the Dallas/Fort Worth area with exception of one of the men,
who is located in Oklahoma City. They range in age from 25 to 48 years
old. Two of the men and one of the women have been with the company
since its inception 15 years ago. All of the people are college graduates.

The compensation plan consists of a base salary plus commission on

sales over 90% quota. All salespeople are expected to make quota.
Their average income is $42,000, though this ranges from a high of
$68,000 to a low of $21,000. Commissions are expected to be
approximately 40% of their income.

ABCO has never had an incentive program in the past having relied on
commissions as an incentive.
NOTE:

 The following slides are not

discussed in the instructor’s
note, but can be used to
supplement the ideas
presented in this chapter.
 Chapter 13

Why the
concern
for sales
force
Motivation Tools
motivation?
What are
the different
theories of Self-
Quotas
Incentive Recognition
Management programs Programs
motivation?
 Figure 13-5:

Model of Motivation
Valence
Importance of receiving
more of certain rewards

Effort Performance Rewards

Expectancy Instrumentality
Likelihood that increased Likelihood that greater
effort will lead to performance will lead
greater performance to more rewards
Figure 13-6:
Self-Management Techniques
TECHNIQU
E METHOD TOOLS
Self- Observe and record Can use diaries,
monitoring behavior. counters, tally sheets,
charts.
Goal setting Establish behavior Should be specific and
change objectives. with a short time
horizon.
Stimulus Modify antecedents to May involve introducing
control behavior. or removing cues.

Consequence Modify antecedents to May involve

management behavior. reinforcement,
punishment, or
Rehearsal Systematic practice of May be overt or
extinction.
desired behavior. visualized.

Self- Specify the May involve public

controlling relationship between commitment.
behaviors and their
consequences.
Steps to Greater
Motivation
1. Define what you want.
2. Inform a special person of your goals.
3. Do something.
4. Don’t let failure deter you.
5. Break down problems into pieces.
6. Set deadlines.
7. Turn work into play.
8. Associate with people who motivate
you.
 Career Stage
Figure 13-4:

Characteristics
Exploration Establishment Maintenance Disengagement

Career  Finding an appropriate  Successfully  Holding on to  Completing

Concerns occupational field. establishing a what has been one’s career.
career in a achieved;
certain reassessing
occupation. career, with
possible
Motivational  Learning the skills  Using skills to  Developing  Establishing a
redirection.
Needs Job required to do the job produce results. broader view of stronger self-
well.  Adjusting to work and identity outside of
Related  Becoming a working with organization. work.
contributing member greater  Maintaining a  Maintaining an
of an organization. autonomy. high performance acceptable
level. performance
level.
Personal  Establishing a good  Producing  Maintaining  Acceptance of
Challenges initial professional superior results motivation, career
self-concept. on the job in though possible accomplishments.
order to be rewards have
promoted. changed.
 Facing concerns
about aging.
Psychologic  Support  Achievement  Reduce  Detachment from
al Needs  Peer acceptance  Esteem competiveness the organization
 Challenging position  Autonomy  Security and
 Competition  Helping younger organizational
colleagues life.
Figure 13-1:
Sales Forced Needs and Ways to Fill
Them
Sales Force
Needs Company Action to Fill Needs
Status  Change title from “salesperson” to “area
manager.” Buy salespeople more luxurious
cars to drive.
Control  Allow salespeople to help plan sales quotas
and sequences of calls.
Respect  Invite salespeople to gatherings of top
executives. Put pictures of top salespeople in
company ads and newsletters.
Routine  Assign each salesperson a core of loyal
customers that are called on regularly.
Accomplishm  Run short-term sales contests. Schedule
ent sales meetings in exotic locations.
Stimulation
Honesty  Deliver promptly all rewards and benefits
promised.
Figure 13-2:
Summary of Classic Motivation
Theories
THEORY AUTHOR DESCRIPTION
Hierarch of Abraham  Physiological, safety, belonging, esteem, and self
needs Maslow actualization needs are ranked in a hierarchy from lowest
to highest. An individual moves up the hierarchy as a
need is substantially realized.
ERG theory Clayton P.  Hierarchically classifies needs as existence, relatedness,
Alderfer and growth needs. Like Maslow, suggests that people will
focus on higher needs as lower needs are satisfied but,
unlike Maslow, suggests that people will focus on lower
needs if their higher needs are not satisfied.
Motivation- Frederick  Argues that intrinsic job factors (e.g., challenging work,
hygiene Herzberg achievement) motivate, whereas extrinsic factors (e.g.,
pay) only placate employees.
Theory of David  Proposes that there are three major professional needs:
learned needs McClelland achievement, affiliation, and power. A high need for
achievement and affiliation has been related to higher
sales force performance. A high need for power has been
related to higher sales manager performance.
Equity theory J. Stacy Adams  Proposes that people will evaluate their treatment in
comparison to that of “relevant others” and that
motivation will suffer if treatment is perceived to be
inequitable.
What Makes Great
Salespeople?
CHARACTERISTI
C DESCRIPTION
The Competitor  This person not only wants to win, but derives
satisfaction from beating specific rivals -- another
company or even colleagues. They tend to
verbalize what they are going to do, and then do
The Ego-Driven  it.
They are not interested in beating specific
opponents, they just want to win. They like to be
considered experts, but are prone to feeling
slighted, change jobs frequently, and often take
The Achiever  things tooof
This type personally.
person is almost completely self-
motivated. They usually set high goals and as
soon as they hit one goal, they move the bar
higher. They like accomplishment, regardless of
who receives the credit.
The Service-  Their strengths lie in building and cultivating
Oriented relationships. Winning is not everything to this
person, but they do respond to feelings of
gratitude and friendship from other people.