Feature Article - March/April 2009

Sales Success

How To Motivate Higher Returns

By Brian Summerfield

Offer a Wide Range of Incentives

In the Glengarry Glen Ross scenario, all of the salespeople are offered a shot at the same car and set of steak knives. But what if none of them are actually interested in those things? (Clearly, none of them are interested in what's behind door number three.) What if the top sales person at the company is perfectly satisfied with the vehicle and kitchenware he already has?

Now, these kinds of questions likely didn't occur to David Mamet, as the contest was almost beside the point of the movie. But they're worth our consideration. How do you come up with the right rewards for your team? Actually, you don't.

"The main idea is that one size doesn't fit all," Gopalakrishna said. "I think when we have contests, we're looking to get maximum participation. We like to have all of our agents participate, and we put in place one rewards program that we think will appeal to the most people. That typically doesn't work. Different people are doing different things because of where they are in their career and what motivates them at that particular time."

"The biggest advice is to not worry about what to offer, and offer as much as you can," Ryan explained. "The companies that try to determine what's going to motivate people tend to spend a lot of time picking awards when a wide range of awards motivates a diverse audience. In many sales forces, you have multiple generations. It's kind of like determining what Christmas present is going to work well for your entire family. Often, when we look at what people redeem for, we're surprised at what we see. I think you can use images of some of the more dynamic awards—big-screen TVs, for example—as a way to market your program, but if you don't have a wide range of awards, I think you'll spend a lot of time worrying about what motivates your people."

Merchandise in particular is an effective means of reward, he added, not only because it provides a wide array of prizes, but also because of its emotional value.

"In many cases, the non-cash award is viewed by the recipient as being more valuable than cash. One of the reasons for that is salespeople are breadwinners. The cash they receive is something they perceive as being good for household expenses. They don't necessarily get the whole benefit of getting an award, because the cash passes right through them and into their checking accounts. When you look at general rules of thumb, depending on what kind of sales force you have and the weight that overall compensation has to variable pay, you probably want to look at non-cash as being 5 to 15 percent of your variable pay component. I find that when organizations stick to that particular ratio, they're most successful."