How to Motivate Your Sales Team Financially
How do you motivate your sales force in your Enigin Distributorship or Enigin Partnership? Is with money - bonuses or rewards?
Increasingly research suggests that, for most of us, receiving more money would not make us perform any better in our jobs. We are not coin-operated, in that sense. But it is accepted that in sales, money does motivate productivity.
The question is often the balance of how to motivate with money. A recent research paper by Harvard Business School professor Thomas Steenburgh and Yale School of Management’s Doug J. Chung and K. Sudhir attempted to explain the best combination of incentives - salaries, commissions and bonuses - that kick sales people into maximum overdrive.
They discovered that compensation design is an important issue. Get this wrong and bonuses can cost you sales.
Just ask Jared Franklin, president, of Chase Technology Consultants in Boston. He blogs on BNET about how his sales bonus system made employees complacent after receiving big payments.
The researchers outline a compensation scheme that spreads out rewards and keeps interest high among the sales team throughout the sales cycle. Here are two of their key findings:
- Quarterly bonuses increase sales force productivity when combined with annual rewards. Monthly bonuses, however, aren’t as effective. “In the absence of quarterly bonuses, a failure in the early periods to accomplish targets caused agents to fall behind more often…,” according to the researchers.
- Top performers tend to dial back after meeting their quotas, so overachievement commissions are effective at keeping them selling.
Comments are closed!