In most cases, companies use sales commissions and quotas to motivate their sales reps. Essentially, you hit a particular target, and the company pays you an agreed sum of money. This type of motivator is extrinsic and it is a successful lever but intrinsic, non-financial motivators are important too and getting these working together is the real key to infusing energy into your sales reps, increase productivity and get the very most from your sales team.

A strong sense of purpose

Some sales reps are motivated by a strong sense of purpose. They believe in the products and services they are selling and the benefits that they deliver to their customers. They are personally invested and delighted by the satisfaction their customers get from their products and services. Reps who are driven by a strong sense of purpose should be brought into the client feedback loop to champion their clients and provide insight into product and service development. 

Accountability and ownership

When people are involved in setting their own goals, they are more invested and more likely to achieve them. As much as the company will always have its overarching goals for the sales department, it is essential to allow individual reps to create sales goals that are SMART and map out their own plan to achieve success. Having personal targets that are aligned with the company’s goals helps to improve motivation and attainment. 

Autonomy

Whilst management at varying levels is required in most organizations, ‘micromanagement’ is often one of the reasons given when people chose to leave a position. Innovative, fast-moving business are recognizing the importance of self-management – working our clear goals with employees and giving them autonomy to deliver. Giving your sales reps some control over their own time manage, their daily schedules and the tools and techniques they use, without the need for a lot of bureaucracy may enable them to sore. 

The rapport between sales reps and managers

Managers and sales reps should work together to define best ways of work in term of communication, how they intend to handle supervision and feedback. For some reps, having a quick meeting with their manager every day is quite motivating while others find the weekly sit-down more helpful. It’s important to find out what works best for your team and personalizing the approach for each member in order to get the best out of them.

At Commissionly we offer a cloud-based sales commission and sales compensation management web app to help you motivate your sales team by using a commission-based payment structure. With a well-structured commission coupled with non-cash incentives, you can be sure that your sales team will deliver impeccable results.

“Creativity is often the key to devising meaningful recognition programs that have an impact on individual performance and the bottom line.”

While Commissionly is one of the few CRM systems that offer native commission software, we pay careful attention to alternative modes of motivating and compensating sales staff that personify the competitive environment in the UK, Europe and the United States, especially with some sectors reporting talent shortages.

As Accenture summarily puts it “When it comes to motivating people toward great performance, it’s not just about the paycheck.”   Many sales managers have known or suspected this for years, especially in downturned economies when the selling cycle gets longer. Some companies may uncomfortably acknowledge that the number of calls necessary to close a deal has also jumped.   For instance, it is not uncommon to require six or more calls to close a deal in some sectors.

And conversion rates—moving from the initial call to the presentation stage, and then converting proposals to sales—are trending down for some industries, while in others the uptick in the U.S. economy may be moving them in the opposite direction.   Regardless, there will come a point in every small business lifecycle where they will experience some of the pain points above, which has a dramatic effect upon sales force motivation and performance.

“That leads to a situation where you have to know more and sell harder, but where you may be less effective in your overall success rates,” said Accenture. Traditionally higher commission and compensation rates may sound like the most sensible way to keep your sales force stimulated, focused and closing deals.

However, recent research indicates that this may not be the case with your sales force quenching for support in basic areas including sales enablement and tools, reducing quote cycle times, getting better documentation, and developing a product that is differentiated and easier to sell.

Modern authors like Daniel Pink, have also found compelling case studies in the software development industry which support the arguments above noting that one CEO decided to completely eliminate sales commissions after experiencing a protracted increase in commission complexity resulting from salespeople gaming the system and management constantly attempting to plug the holes.

For instance, salespeople would take advantage of early commission schemes by pushing sales into the time period most advantageous for them, by underselling one month to show a bigger gain the following month.   Soon the compensation software consumed large amounts of internal resources as management attempted to fight back, ultimately removing their focus from product and service development.

Frustrated by the process and results, the CEO decided to investigate eliminating sales commissions altogether, receiving at first, mixed and conflicting feedback from his sales force regarding this dramatic proposal:

“When I explained it to Tom [not his real name] he said, ‘It sounds like a really good idea. But James would never like it; he’s solely motivated by money. Remove the commission and he’ll leave.’ James said, ‘Sounds great. But it will never work with Tom. Money is all that drives him.”

Thus, according to Pink, not only were commissioned sales not leading to better performance, it wasn’t even the arrangement salespeople themselves preferred

The CEO decided to remove commissions and instead pay his sales force a healthy salary, which gradually resulted in increasing sales. Of course, this new scheme did have some casualties, with two salespeople promptly leaving. However most stayed and are thriving – including Tom and James, referenced above.

“Rather than relying on carrots [sell more and you can buy the new car] and sticks [don’t sell enough and you won’t be able to feed your kids], we are compelled to make our salespeople’s work more interesting, to set better goals and encourage teamwork,” said the CEO.

The result was collaboration and commitment increased and they became agents for the customer rather than a salesperson. While this strategy may not work in all industries it is worth acknowledging the drawbacks with the age-old use of commission structures.

According to Accenture, financial compensation—though not, strictly speaking, a physiological need—is analogous to the lowest tier of needs in Maslow’s hierarchy. It is basic and important, but it touches upon only one dimension of motivation and a comparatively low-level one at that.

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Creating sales goals can be difficult. Ensuring your targets are realistic enough that they are achievable, while also being high enough to boost efficiency, is a tricky balance to find. 

One of the best ways to encourage employees is to ensure that any and all sales targets are relatable. If employees feel invested in their personal targets, they are far more likely to reach them. Here are a few tips on setting relatable sales goals, which are useful for all sectors and teams of any size.

1. Different people should have different targets

Setting suitable targets for each individual is an important aspect. You can base these on years of experience, previous form and other circumstances. Of course, an experienced salesperson is likely to be able to sell more than a new employee so their targets should reflect this. Personalised targets also allow for greater self-reflection if they fail to meet them. This allows them to see where they can improve in the future. 

2. Give your employees context

Targets are always more relatable if your employees know on what basis they are set. Whether targets are set in line with projected company growth or last year’s figures plus 3%, explain to your staff that they aren’t arbitrary. It also shows how their efforts contribute to the wider company goals too

3. Alter targets upon results

Target setting should be dynamic. If an employee consistently achieves their target, then it’s worth considering setting them a higher target to keep them motivated. If an employee falls behind, then discuss reducing their target; it may make it more realistic and help them stay engaged. It’s important to note targets should still be a slight stretch for employees so they don’t become complacent. 

At Commissionly, we pride ourselves on being the first cloud-based sales commission and sales compensation management web app. We are 100% focused on SMEs. For more information about how we can help your business, contact us today [https://www.commissionly.io/contact-us/].