Part V SALES FORCE LEADERSHIP

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Part VSALES FORCE LEADERSHIP

• Chapter 11
• Motivating Salespeople

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What is Motivation?

• Drive to initiate an action.
• The intensity of effort in an action
• The persistence of effort over time.

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Reasons for Motivating Salespeople

• Frequent rejection
• Physical separation from company support
• Direct influence on quality of sales presentation
• Indirect influence on performance

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What Goals are Most Important?
Expand Visibilityof Sales IncreaseSales
Revenue Enhance CompanyCredibility Build the
Brand
43.9
66.1
31.9
29.8
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How Successful Were You at Reaching Your Goals?
35.7
Expand Visibilityof Sales IncreaseSales
Revenue Enhance CompanyCredibility Build the
Brand
64.7
27.9
72.1
41.9
58.1
31.8
68.1
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Maslows Hierarchy of Needs

• 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.

Self-Actualization
Self-Esteem
Love-Belonging
Safety-Security
Physiological
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An Exercise to Determine Your Motivational Needs

• To perform the exercise, read through the
  following statementscheck 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.

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Your Score

• To Determine Results
• The statements are divided into five categories
  intended to represent the five levels in Maslows
  Hierarchy of Needs. The second digit in each
  statement number indicates the category. These
  categories are
• Physiological,
• Safety-Security,
• Love-Belonging,
• Self-Esteem,
• 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.

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Maslows Needs Related Sales Force Motivators
Maslows Hierarchy Of Needs Motivators
SELF-ACTUALIZATION Challenging tasks calling for creativity
ESTEEM Recognition programs
BELONGING Presidents Club 1 million
SAFETY SECURITY Job security and fringes
PHYSIOLOGICAL Cash wages and bonuses
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Chinese CultureHierarchy of Needs
Self-actualization in service to society
Safety
Physiological
Affiliation (belonging)
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Maslows Hierarchy
U.S. SALESPEOPLES RESPONSES U.S. SALESPEOPLES RESPONSES U.S. SALESPEOPLES RESPONSES U.S. SALESPEOPLES 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
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Comparison of Motivators and Hygiene Factors
Percentage Frequency
Low Satisfaction
High Satisfaction
40 30 20 10 0
10 20 30 40

• Hygienes
• Policies
• Tech. Supervision
• Salary
• Interpersonal Relations
• Working Conditions

• Motivators
• Achievement
• Recognition
• Work Itself
• Responsibility
• Advancement

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Career Stages

• Does everyone go through these stages?
• What can be done to address the concerns of
  salespeople at each stage?

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Exploration Stage

• Motivational Needs
• Learning the skills required to do the job well.
• Manager Role?

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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

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Establishment Stage

• Motivational Needs
• Use skills to produce results, increase job
  autonomy
• Manager Role?

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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
  somethingother than promotion

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Maintenance Stage

• Motivational Needs
• Develop a broader view of work and organization,
  maintain a high level of performance
• Manager Role?

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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

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Disengagement Stage

• Motivational Needs
• Establish a stronger self-identity outside of
  work,maintain performance level
• Manager Role?

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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)

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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?

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Overlap of Ages on Career Stages
Career Concerns Proportion of Sales Force
Exploration 14
Establishment 29
Maintenance 42
Disengagement 15
Age Range
20 30
40 50
60 65
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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 carreminds them of their value.
4. Car Phone - justified on a purely business basis

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Giving Status to Salespeople

1. Field Sales Council - meet president for 1/2 day
   open-ended discussion on field marketing
   conditions - report back to field meetings the
   results
2. Outside Secretarial Support - or more exclusive
   central.
3. Published Success Stories - high form of
   recognition
4. Task Force Assignments - e.g., review of all
   paperwork.

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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 didnt 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.
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Expectancy Theory System
REWARD
PERFORMANCE
EFFORT
EXPECTANCY Likelihood increasedeffort will lead
to greater performance
INSTRUMENTALITY Likelihood greater Performance
will lead to more rewards
VALENCE Importance of receiving More of certain
rewards
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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?

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Role Perceptions

• Sales is a boundary spanning position- you must
  be responsive to expectations of multiple people.

Company
Sales Manager
Customers
Family
SALESPERSONS ROLE PERCEPTIONS SALESPERSONS 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?
Conflict Does meeting expectations of one person mean not meeting the expectations of another?
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Role Perceptions

• Typical Sales Job Activities
• Where is their potential for the following
• Ambiguity
• Lack of Accuracy
• Conflict

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

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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

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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
  reward myself with a weekend trip to Las Vegas.
• Signed Witness
• Review Date

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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.

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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?

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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.

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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.

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Who am I?
I lost my business (1831)
Defeated for state legislature. (1832)
Failed again in business (1833)
Suffered an emotional breakdown. (1836)
Lost election for speaker elector congress vice-president (1838) (1840) (1843 and 1845) (1856)
Elected President 1860
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Sales Force Experiment
Percent of Salespeople at or Over 100 Percent of Salespeople at or Over 100 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
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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.

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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

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Types of Incentive Awards
Used by 168 Firms Used by 168 Firms
Type of Award Percentage of Firms Using
Cash 59
Selected Merchandise 46
Merchandise Catalog 25
Travel 22
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Figure 13-7 Use of the Various Types of Quotas
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Sales Volume Quota Profit-based Quota Activity
Quota
55
32
14
28
14
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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
ABCOs 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, ABCOs
selling cycle will vary from two weeks to three
months.
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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.
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NOTE

• The following slides are not discussed in the
  instructors note, but can be used to supplement
  the ideas presented in this chapter.

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Chapter 13
Why the concern for sales force motivation?
What are the different theories of motivation?
Motivation Tools
Self- Management
Quotas
Incentive programs
Recognition Programs
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Figure 13-5 Model of Motivation
Valence Importance of receiving more of certain
rewards
Effort
Performance
Rewards
Instrumentality Likelihood that
greater performance will lead to more rewards
Expectancy Likelihood that increased effort will
lead to greater performance
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Figure 13-6Self-Management Techniques
TECHNIQUE METHOD TOOLS
Self-monitoring Observe and record behavior. Can use diaries, counters, tally sheets, charts.
Goal setting Establish behavior change objectives. Should be specific and with a short time horizon.
Stimulus control Modify antecedents to behavior. May involve introducing or removing cues.
Consequence management Modify antecedents to behavior. May involve reinforcement, punishment, or extinction.
Rehearsal Systematic practice of desired behavior. May be overt or visualized.
Self-controlling Specify the relationship between behaviors and their consequences. May involve public commitment.
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Steps to Greater Motivation

1. Define what you want.
2. Inform a special person of your goals.
3. Do something.
4. Dont 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.

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Figure 13-4 Career Stage Characteristics
Exploration Establishment Maintenance Disengagement
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. Completingones 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.
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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.
Accomplishment Stimulation Run short-term sales contests. Schedule sales meetings in exotic locations.
Honesty Deliver promptly all rewards and benefits promised.
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Figure 13-2 Summary of Classic Motivation
Theories
THEORY AUTHOR DESCRIPTION
Hierarch of needs Abraham Maslow Physiological, safety, belonging, esteem, and self 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. Alderfer Hierarchically classifies needs as existence, relatedness, 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-hygiene Frederick Herzberg Argues that intrinsic job factors (e.g., challenging work, achievement) motivate, whereas extrinsic factors (e.g., pay) only placate employees.
Theory of learned needs David McClelland Proposes that there are three major professional needs 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.
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What Makes Great Salespeople?
CHARACTERISTIC 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 it.
The Ego-Driven 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 things too personally.
The Achiever This type of 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-Oriented Their strengths lie in building and cultivating relationships. Winning is not everything to this person, but they do respond to feelings of gratitude and friendship from other people.