Essay: How to Really Motivate Salespeople

The ideal salesforce of a particular company is expected to make sales that only increase the amount of revenue that the company brings in. The sales that are made are vital to the longevity of any given company. Sometimes the realm of sales can be far to competitive to retain its salesmen over varied periods of time. The turn around rates for salesman are often dismal when morale is low amongst the salesforce. For a salesman, it is vital that morale be high. Customers can sense unhappiness and genuine distaste for the very company a salesman may work for and this is bad for business. The Executives of any corporation are wise to incorporate rewards programs that give employees a reason to work hard for their company.
According to the article entitled, “How to Really Motivate Salespeople” by Doug J. Chung, compensation is a huge issue amongst driven salesmen (Chung, 2015). Each salesman as a responsibility to uphold this includes meeting quotas and increasing visibility (Chung, 2015). However much of the complaints to sales managers from the salesmen below revolved around the idea that there were a multitude of issues that kept them unhappy (Chung, 2015). These issues included quotas that were set too high (Chung, 2015). While some may have been ambitious, these quotas were often set unrealistically high (Chung, 2015). In some cases salesmen were put into an oversaturated market in which they were stifled clientele wise (Chung, 2015). Their limited territories made it hard for them to meet quotas with the opening of new accounts (Chung, 2015).
Looking at the way in which salesmen are compensated is vital to understanding why rewards packages are vital to maintaining high morale amongst its salesmen (Chung, 2015). This is especially important considering the fact that this company’s sales comp system was found to be categorized as fairly basic: Reps typically earned a salary and a commission of around 1% of sales (Chung, 2015).There are companies that have taken the initiative to actively analyze the ways in which sales reps move within their day to day (Chung, 2015). The act of playing around with a particular system’s components to try to initiate better ways to keep reps motivated (Chung, 2015). As a result there will be a substantial boost in revenue (Chung, 2015). It also increases the return on the money that was spent paying sales reps for what ever they needed to boost company visibility (Chung, 2015). An example of this would be the money that is mostly used for the company’s marketing budget (Chung, 2015).
It is necessary that a salesman bring the highest number if clients. This proves difficult when there is low moral amongst the the salesforce (Chung, 2015). For years salesmen were paid commission in an environment when it was often hard to make a sale (Chung, 2015). Economist locked in on this problem, which is often referred to as a principal-agent problem (Chung, 2015). This system typically worked to the benefit of the company because it was simpler to measure the short-term output of a sales rep (Chung, 2015). It would also allow the differentiation between the salesmen that has operated without being micromanaged (Chung, 2015).
In this wave of action there could be the manifestation of needing commission-based pay that would give managers some control (Chung, 2015). The idea is that this would counteract the inability to know if a rep is actually doing their job on the daily (Chung, 2015). This system also takes into account the differing aspects of personality types (Chung, 2015). This demonstrates how sales reps typically have a larger appetite for risk than other workers (Chung, 2015). They are very ambitious when they are motivated and this is why a pay plan that offers upside potential would appeal to them (Chung, 2015). In an effort to boost morale and create and environment that is conducive of brewing stimulated and excited salesmen, the development of a total rewards program is necessary. With this in mind, there are six feature of an effective total rewards program to keep in mind. These features include compensation that benefits a sales rep in the realms of education & training, health & well-being, finance & retirement, and family & life. The company that will utilized for this exploration would be Paychex. Inc. Each of these areas fall under the category of compensation, recognition, benefits, work/ life balance and development which are vital factors of a total rewards program with will work effectively.
Compensation is of principle importance to keep up the morale of a salesman (Sharp, 2018). A total rewards program that includes a base salary would include short-term or long-term incentive pay (Sharp, 2018). This gives much boost to the salesman that is used to only being compensated for what they sell or the quotas they makes (Sharp, 2018). The option of either helps motivate over achievers within the salesforce (Sharp, 2018).
Benefits in relation to how a salesman will be set up in the future falls into the realm of long-term incentive pay (Sharp, 2018). 401k programs and other incentives like having days available for leave of absence, sick and bereavement leave, and vacation time (Sharp, 2018). These are crucial to ensuring that sales reps feel comfortable obtaining the relaxation or even being able to take the time out to celebrate life’s moments outside of working and meeting quotas (Sharp, 2018). These benefits would also include being supplied with the legally-mandated minimum requirements such as Medicare, unemployment, and Social Security which in turn offers sales reps a sense of security regarding their health (Sharp, 2018). A company that can tempt an employee with its compensation must offer what many would deem an attractive benefits package (Sharp, 2018). This package would ultimately aid in setting a particular company apart from competitors (Sharp, 2018). Offers the salesforce a well rounded total rewards system will ensure that there is never a want for salesforce because salesmen will be dying to work for the company with the best total rewards program (Sharp, 2018).
Development if vital to the ambitious salesman (Sharp, 2018). A total rewards program that will ensure that employees are provided with resources that will take them to the next level is vital to ensuring that salesforce is always active and willing to meet quotas on their behalf (Sharp, 2018). Studies have shown that a lack in opportunities in which an employee can take in information in an effort to develop will ultimately result in disillusion with ones work (Sharp, 2018). This often results in salesmen leaving their job which points to embarrassing turn over rates amongst its salesforce (Sharp, 2018). Offering development opportunities that incite growth with ensure that employees don’t jump ship (Sharp, 2018). Tailoring these opportunities to their individual goals for growth gives them something to work towards and also makes them feel as though they are being both heard but also valued (Sharp, 2018). Providing employees with resources such as access to training and other courses will ensure that a company has salesforce that wants to stay (Sharp, 2018). The mission of a total rewards program is maintain employee retention (Sharp, 2018).
When attempting to meet ridiculous quotas, salesmen often find that their lives suffer as a result of working for success (Sharp, 2018). A total rewards packages that ensure that life and work balance is possible will definitely ensure that sales reps aren’t overworked and forced to resign when they are no longer able to work on a company’s behalf (Sharp, 2018). It has been found that more than half of employees within the United States feel as though they are overworked (Sharp, 2018). It has been found that 28% feel this way often or very often (Sharp, 2018). This does damage on the morale of any employee, especially a salesman who is supposed to be excited about their product (Sharp, 2018). A company that offers its employees a manageable workflow while offering a healthy balance between the demands of work and other personal responsibilities is vital to ensuring that the salesforce is happy (Sharp, 2018). A company that offers flexibility offers employees the luxury of being accommodated on their irregular schedules due to their personal family demands (Sharp, 2018). Giving focus to the mental health of its salesforce can do wonders for morale as well (Sharp, 2018). A total rewards package that offers counseling to help employees plan for retirement, and provide thorough overviews for investment options eliminates the stress of figuring out what’s next in the even of job loss (Sharp, 2018).
Within in the total rewards program described the value proposition achieved for current and future employees is based on the idea that salesforce can thrive while also being encouraged to grow and development. A salesman that is accustomed to the limitations of a commission based sales jobs will be begging for the opportunity to benefit from these incentives.
References
Chung, D. J. (2015). How to Really Motivate Salespeople. Harvard Business Review. Retrieved from https://hbr.org/2015/04/how-to-really-motivate-salespeople
Management Study Guide. (2017). Employee Value Proposition – Meaning and its Importance. Retrieved from https://www.managementstudyguide.com/employee-value-proposition.htm
Ruckes, W. (2016). Total rewards for salespeople: 9 trends for 2017. Retrieved from https://www.biworldwide.com/globalassets/us-en/pdfs/employee-engagement/sales-trends-2017.pdf
Sands, S. (2009). Using Total Rewards to Drive Business Performance Improvement. Retrieved from http://www.aon.com/attachments/thought-leadership/Hewitt_Sands_%20UsingTotalRewards.pdf
Sharp, B. (2018). What Are the Components of a Total Rewards System? Retrieved from https://hrsoft.com/blog/what-are-the-components-of-a-total-rewards-system/