Sales team motivation is a combination of staff incentives used to engage and drive the behavior of sales reps within an organization. It plays a key role in creating a healthy culture and positive environment. And as a part of your sales compensation plan, it’s the driver behind your overall performance.
Keeping sales reps motivated and engaged is critical at any time. It helps reach your goals and plays a large part in retaining top sales reps. But it’s even more important in today’s fast-paced climate—when change is around every corner, and Forrester reports that 65% of organizations face unwanted sales rep attrition.
Why is sales motivation so important?
The answer is simple: motivated teams perform better, and reps that are engaged and well-compensated are less likely to leave their current role. Top sales teams that address engagement in their everyday work outperform teams by an average of 20% in sales, according to a recent Gallup Poll.
Unmotivated, disengaged sales teams often go hand-in-hand with poor overall performance, which can derail sales goal attainment. For sales reps specifically, workplace motivation aims to enhance their performance on the sales floor, leading them to generally work harder and smarter. Thus, this allows organizations to complete tasks efficiently, properly, and on deadline—all of which positively impact the organization’s bottom line.
Types of Sales Team Motivation
Maintaining high levels of sales performance requires a balance between the right incentives and pay mix. Typically, sales organizations implement workplace motivation with a combination of monetary and non-financial incentives.
Monetary sales team motivation is the most traditional incentive. It’s designed to motivate sales reps with financial rewards. The most common tactic is to use 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. The most widely-used non-financial incentive is President's Club, which allows sales reps to enjoy additional perks for meeting and exceeding quota often at an offsite location at the company's expense.
However, given today’s unique circumstances, travel to offsite locations and large gatherings aren’t a possibility. So what can you do to provide non-financial motivation? Here are a few ideas:
- Career and skill development through online events and courses
- Health and wellness app subscriptions (like Calm or Grokker)
- Equipment upgrades and support to set up a home office
A Real-World Example of Workplace 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 excellent, 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?
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, 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
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 just 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.”
Motivating Sales in any Situation
Getting sales team motivation right is an on-going job. It’s even more important in today’s world, when stressors exist both in the workplace and in reps’ personal lives. Like your sales plans, you need to continuously analyze and adapt motivation techniques to fit the changing circumstances facing your sales team. This helps maintain a high level of motivation and ensures you’re consistently on the best path to reach your company goals.
You can start by getting deeper visibility into sales rep performance. With over 15 years of real-world data, Xactly Insights helps you highlight performance trends and identify reps at risk for turnover more quickly. This allows you to monitor behaviors, gauge engagement more effectively, and take action to rectify any problems sooner.
Discover more ways to improve your sales planning and motivation in Forrester Consulting’s latest research, “Unleash Your Growth Potential With Continuous Planning.”