What is Sales Team Motivation?
Sales team motivation is a combination of incentives used to engage and motivate members of a sales organization. Most often, this includes monetary and non-financial incentives. Sales team motivation is key to successful organizations. Keeping reps motivated is extremely important, especially when only 53% of reps hit their quota in 2017 and only 69% hit their revenue goals.
Unmotivated, disengaged sales teams often go hand-in-hand with poor overall performance, which can derail sales goal attainment. For sales reps specifically, sales team motivation aims to enhance their performance on the sales floor, leading them to generally work harder and smarter. Thus, this allows sales organizations to complete tasks efficiently, properly, and on deadline—all of which positively impact the organization’s bottom line.
Types of Sales Team Motivation
Sales teams can be motivated in a number of ways. Typically, sales organizations motivate reps with a combination of monetary and non-financial incentives.
Monetary sales team motivation does exactly what it's name says—motivate sales reps with financial incentives. The most common monetary incentive tactic lives in your sales compensation plan as your sales commission structures. These perform best as tiered commissions, which encourage reps to hit revenue milestones (each with a higher commission rate); thus, motivating them to meet and exceed quota.
Other examples of monetary motivation include:
- Bonuses (read more on the difference between bonus vs. commission)
- Sales Performance Incentive Funds (SPIFs)
- Management-Based Objectives (MBOs)
Non-financial sales team motivation engages reps with non-monetary incentives. Often, these are tangible gifts that reps either compete to win or work towards throughout the fiscal year. Perhaps the most popular non-financial incentive is president's club. As a member of president's club, sales reps get to enjoy additional perks for meeting and exceeding quota (often in an offsite location at the company's expense!).
Other examples of non-financial incentives include:
- Entertainment tickets (concerts, sporting events, etc.)
- Airbnb/travel vouchers
- Electronics (iPad, eReader, etc.)
- Spa/Massage days
Why Motivate in the Workplace?
The answer is simple. Motivated sales teams perform better. The right incentives and pay mix have a huge impact on performance, and companies need to realize that to succeed. In fact, top sales teams that address engagement in their everyday work outperform teams by an average 20% in sales.
A Real World Example of Sales Team Motivation
Consider for a minute the classic example of General Electric and their 900 smokers.
Quitting what many believe to be a terrible habit in smoking offers powerful “incentives” in the form of reducing the risk of cancer and emphysema, preserving white teeth, reducing the severity of colds, and so on. All in all, there are some very good, compelling reasons for putting the cigarette down, right?
But, would you believe that the ultimate motivator in getting these employees to quit smoking was cash? And not even boat loads of it?
General Electric's Motivation Strategy
Kevin Volpp, director of Pennsylvania School of Medicine’s Center for Health Incentives, discovered that to be the case in a popular study.
In it, the 900 smokers were split into two groups, and both groups were given the exact same information on how to best go about quitting smoking. In addition, though, the second group was also promised $100 if they completed a program built around quitting smoking altogether. To sweeten the deal, this group would also receive $250 if they were able to refrain from smoking for six months, and another $400 for being free of tobacco for another six months on top of that.
At the end of the day, the total incentive package for the second group amounted to $750 if they finished the program and quit smoking for a year—not a huge chunk of change, but a decent enough amount to go along with those other benefits like whiter teeth, more pleasant breath, smoke-free clothing, and of course, better health.
And I’m not downplaying the difficulty involved in quitting smoking. If it were easy, we wouldn’t be talking about a study around what it would take to get people to stop such a hazardous activity.
The Results According to drug-free.org:
“About a year after the study began, 14.7 percent of the incentive group had successfully stopped smoking, compared to 5 percent in the control group. Checked again 15 to 18 months after the study's start, 9.4 percent of those in the incentive group remained abstinent, compared to just 3.6 percent of the control group.”
And, if you’re wondering about how many people quit smoking per year outside of the study (at the time of the study), only about 2 to 3 percent of smokers quit every year.
Taking Steps to Motivate Strategically
Incentives must be a part of every workplace as a tool to drive better performance. Without strategic incentives, companies will fail to reach their corporate goals. To put it simply, it’s not that some companies don’t understand the importance of motivation. Rather, their viewpoint on incentives must shift.
Rather than looking at incentive compensation as a financial expense, companies should embrace it as an investment in their largest asset—their sales team. This sets your sales organization up with a strategic mindset. Along with data-driven planning and automation, companies can then create a strategic sales plan that sets them up for sales success.
Want to learn more about strategic sales planning? Download our Complete Sales Planning Handbook.