Part V SALES FORCE LEADERSHIP
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Transcript of Part V SALES FORCE LEADERSHIP
Part V
SALES FORCE LEADERSHIP
Part V
SALES FORCE LEADERSHIP
Chapter 11:Chapter 11:
Motivating Motivating SalespeopleSalespeople
What is Motivation?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 Reasons for Motivating SalespeopleSalespeople
What Goals are Most What Goals are Most Important?Important?
0 20 40 60 80
Expand Visibilityof Sales
IncreaseSales Revenue
Enhance CompanyCredibility
Build the Brand
43.9%
66.1%
31.9%
29.8%
How Successful Were You at How Successful Were You at Reaching Your Goals?Reaching Your Goals?
35.7%35.7%
64.7%64.7%
27.9%27.9%
72.1%72.1%
41.9%41.9%
58.1%58.1%
31.8%31.8%
68.1%68.1%
Expand Visibilityof Sales
IncreaseSales Revenue
Enhance CompanyCredibility
Build the Brand
Most Successful Least Successful
Maslow’s Hierarchy of Maslow’s Hierarchy of NeedsNeeds
Self-ActualizationSelf-Actualization
Self-EsteemSelf-Esteem
Love-BelongingLove-Belonging
Safety-SecuritySafety-Security
PhysiologicalPhysiological
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.
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 security847 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.
An Exercise to Determine An Exercise to Determine Your Your Motivational NeedsMotivational Needs
To Determine Results: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:
1. Physiological, 2. Safety-Security, 3. Love-Belonging, 4. Self-Esteem, 5. 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.
Your ScoreYour Score
Maslow’s Needs & Related Maslow’s Needs & Related Sales Force MotivatorsSales Force Motivators
Maslow’sMaslow’sHierarchyHierarchyOf NeedsOf Needs MotivatorsMotivators
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
SafetySafety
PhysiologicalPhysiological
Affiliation (belonging)Affiliation (belonging)
Self-actualizationSelf-actualizationin service to in service to
societysociety
Chinese CultureChinese CultureHierarchy of NeedsHierarchy of Needs
Maslow’s HierarchyMaslow’s Hierarchy
U.S. SALESPEOPLE’S RESPONSESU.S. SALESPEOPLE’S RESPONSESNumberNumber PercentPercent NumberNumber PercentPercent
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%
HygienesHygienes Policies Tech. Supervision Salary Interpersonal Relations Working Conditions
40 30 20 10 0 10 20 30 40
LowLowSatisfactionSatisfaction
MotivatorsMotivators Achievement Recognition Work Itself Responsibility Advancement
Comparison of Motivators and Hygiene Comparison of Motivators and Hygiene Factors Percentage FrequencyFactors Percentage Frequency
HighHighSatisfactionSatisfaction
Career StagesCareer Stages
Does everyone go through these stages?
What can be done to address the concerns of salespeople at each stage?
Exploration StageExploration Stage
Motivational Needs– Learning the skills required to do the job well.
Manager Role?
Exploration StageExploration 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 StageEstablishment Stage
Motivational Needs– Use skills to produce results, increase job autonomy
Manager Role?
Establishment StageEstablishment 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
Maintenance StageMaintenance Stage
Motivational Needs– Develop a broader view of work and organization,
maintain a high level of performance
Manager Role?
Maintenance StageMaintenance 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 StageDisengagement Stage
Motivational Needs– Establish a stronger self-identity outside of work,
maintain performance level
Manager Role?
Disengagement StageDisengagement 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 Career Stage Effects on SatisfactionSatisfaction
Select Research Findings: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?
AgeAge RangeRange
20 30 40 50 60 65
Overlap of Ages on Career Overlap of Ages on Career StagesStagesCareerCareerConcernsConcerns
Proportion Proportion of of Sales ForceSales Force
Exploration 14%
Establishment 29%
Maintenance 42%
Disengagement 15%
Giving Status to Giving Status to SalespeopleSalespeople
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
Giving Status to Giving Status to SalespeopleSalespeople
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.
Expectancy Theory Expectancy Theory ExampleExample
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 SystemExpectancy Theory System
EXPECTANCYEXPECTANCYLikelihood increasedeffort will lead togreater performance
INSTRUMENTALITYINSTRUMENTALITYLikelihood greaterPerformance will leadto more rewards
VALENCEVALENCEImportance of receivingMore of certain rewards
REWARDREWARDPERFORMANCEPERFORMANCEEFFORTEFFORT
Expectancy Theory SystemExpectancy 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 PerceptionsRole Perceptions
SALESPERSON’S ROLE PERCEPTIONSSALESPERSON’S ROLE PERCEPTIONS
ExpectationsExpectations What do others expect me to do?What do others expect me to do?
AmbiguityAmbiguity How sure am I about what others expect?How sure am I about what others expect?
AccuracyAccuracy Is what I think what they really expect?Is what I think what they really expect?
ConflictConflict Does meeting expectations of one person mean not Does meeting expectations of one person mean not meeting the expectations of another?meeting the expectations of another?
CompanyCompany SalesSalesManagerManager CustomersCustomers FamilyFamily
Sales is a boundary spanning position- you must be responsive to expectations of multiple people.
Role PerceptionsRole Perceptions
Typical Sales Job Activities
Where is their potential for the following:
– Ambiguity
– Lack of Accuracy
– Conflict
Typical Sales Job ActivitiesTypical Sales Job ActivitiesJob DimensionJob Dimension ActivitiesActivities ActivitiesActivitiesSELLING FUNCTION Plan Activities
Develop leads Prospecting Identify Decision- Makers
Prepare Presentations Make Presentations Overcome ObjectionsIntroduce New Products
WORKING WITH ORDERS Write ordersExpedite ordersHandle back orders
Find last ordersHandle shipping problems
PRODUCT SERVICING Learn about product Test equipmentSupervise installation
Train customers Supervise repairsPerform maintenance
MANAGING INFORMATION Receive feedbackProvide feedback
Provide technical information
SERVICING THE ACCOUNT Stock shelvesSet up displays
Count inventoryPromote local advertising
ATTENDING CONFERENCES Sales conferencesClient conferences
Product exhibitionsTraining sessions
TRAINING/RECRUITING Recruit new repsTravel with trainees
Train new reps
ENTERTAINING PartiesDrinks
DinnerLunch
TRAVELING DISTRIBUTION Out-of-TownSell throughEstablish relationships
In-Town TrainCredit
Self-ManagementSelf-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-ContractA 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-ContractExample of a Self-ContractDate:Goal: Increase the number of accounts by 10% in the coming year
AgreementSelf: 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.
ConsequencesIf 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
Why Use QuotasWhy Use Quotas
1. Help motivate salespeople.2. Direct where to put effort.3. Provide standards for evaluation.
1. Sales volume1. 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 QuotasVarious 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?
Goal Theory PostulatesGoal 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 Goal Theory Additional FactorsFactors
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? 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: speakerelectorcongressvice-president
(1838)(1840)(1843 and
1845)(1856)
Elected PresidentElected President 18601860
Sales Force ExperimentSales Force Experiment
Percent of Salespeople at or Over Percent of Salespeople at or Over 100%100%
MonthMonth AdjustedAdjusted Non AdjustedNon 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 -- Sales Force Experiment -- ConclusionsConclusions
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 Incentive Program DecisionsDecisions
What is difference from regular compensation such as commission?
Key decisions Goals Rules
Timing Awards
Participants Publicity
Theme Cost
What is difference between
Incentive Incentive and Recognition Recognition programs
Types of Incentive AwardsTypes of Incentive Awards
Used by 168 FirmsUsed by 168 Firms
Type of AwardType of AwardPercentage ofPercentage of
Firms UsingFirms Using
Cash 59%
Selected Merchandise 46%
Merchandise Catalog 25%
Travel 22%
Figure 13-7:Figure 13-7:
Use of the Various Types of Use of the Various Types of QuotasQuotas
60%60%
55%55%
32%32%
14%14%
14%14%
28%28%
Sales Volume Quota
Profit-based Quota
Activity Quota
Large firms’ Sales > $40M Small firms’ Sales < $40M
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 ExerciseExperiential 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.
Experiential ExerciseExperiential Exercise
NOTE:NOTE:
The following slides are not discussed in the instructor’s note, but can be used to supplement the ideas presented in this chapter.
Motivation ToolsMotivation Tools
Self-Management
Chapter 13Chapter 13
QuotasIncentiveprograms
RecognitionPrograms
What areWhat arethe differentthe differenttheories oftheories ofmotivation?motivation?
Why the Why the concernconcernfor sales for sales forceforcemotivation?motivation?
Figure 13-5:Figure 13-5:
Model of MotivationModel of Motivation
EffortEffort PerformancePerformance RewardsRewards
InstrumentalityInstrumentalityLikelihood that greaterLikelihood that greaterperformance will leadperformance will leadto more rewardsto more rewards
ExpectancyExpectancyLikelihood that increasedLikelihood that increasedeffort will lead toeffort will lead togreater performancegreater performance
ValenceValenceImportance of receivingImportance of receivingmore of certain rewardsmore of certain rewards
Figure 13-6:Figure 13-6:
Self-Management TechniquesSelf-Management TechniquesTECHNIQUTECHNIQUEE METHODMETHOD TOOLSTOOLSSelf-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.
Steps to Greater Steps to Greater MotivationMotivation
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.
Figure 13-4:Figure 13-4: Career Stage Career Stage CharacteristicsCharacteristics
ExplorationExploration EstablishmentEstablishment MaintenanceMaintenance DisengagementDisengagement
Career Career ConcernsConcerns
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.
Completingone’s career.
Motivational Motivational Needs Job Needs Job RelatedRelated
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 Personal ChallengesChallenges
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.
PsychologicPsychological Needsal Needs
Support Peer acceptance Challenging position
Achievement Esteem Autonomy Competition
Reduce competiveness
Security Helping younger
colleagues
Detachment from the organization and organizational life.
Figure 13-1:Figure 13-1:
Sales Forced Needs and Ways to Fill Sales Forced Needs and Ways to Fill ThemThemSales ForceSales Force
NeedsNeeds Company Action to Fill NeedsCompany 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.
Figure 13-2:Figure 13-2:
Summary of Classic Motivation Summary of Classic Motivation TheoriesTheoriesTHEORYTHEORY AUTHORAUTHOR DESCRIPTIONDESCRIPTIONHierarch 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.
What Makes Great What Makes Great Salespeople?Salespeople?CHARACTERISTICHARACTERISTICC DESCRIPTIONDESCRIPTION
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.