COMMENTS
Hi Dave,
The book Freakonomics also talks about incentives (both positive and negative, hidden and clear). It is a great book, as is The Great Game of Business by Jack Stack (talks about company wide incentives).
When I look at '07 in the rearview mirror, my company hasn't had the growth we've wanted in our core accounts. I'm thinking of paying extra commission on the growth of these core accounts in '08. Any comments on this idea?
The activity levels bear out that our team finds it easier to stay in front of smaller accounts. I hope we'll be motivating the team in the right direction (like Schilling might be motivated to do extra running to keep the lbs off).
I think dollar incentives work better for salesfolk than they do for veteran baseball players, but there's always a currency to incent people in any field.
It's been my experience that sales departments have a higher concentration of people who are incented best with money. While I liek Freakonomics a bunch, it does, I believe, fall into the cult of Economics, a world view that too often falls into a fallacy that people-as-a-whole are most incented by $$ (perhaps true, perhaps not), ergo every individual is best motivated that way (clearly false).
In Schilling's case, the $2 million may work as an incentive, not because $2MM makes any material or ego satisfaction difference in his life, but because it's an indicator that his employer cares deeply about it -- since Schilling has great pride in his work, he cares, among other motivations, not only that he's effective, but that his employer knows, too. So, as I said, the $2 million is likely to work to some degree, but not because of the cash value.
I think we agree that it's almost always worthwhile to create incentives for individuals, as long as the currency the incentive delivers is a prime motivator for the talent.
The Red Sox are smart to insist on incentive alignment and Schilling is smart to want to play ball under these rules. I'm suprised baseball players get away with what they do b/c the numbers are so obvious.
Your statement "activity levels bear out that our foks find it easier to stay in front of smaller accounts" - is very telling.
Large companies tend to have more sales people calling on them, their executives tend to be busier and more under pressure, often they have more sophisticated buying cycles and mainly, if you blow the first meeting by wasting their time, you are unlikely to get back inside.
The reason smaller accounts are easier to "meet" with is twofold: Small business people often meet with salespeople to get a free education, and they want to hear about their competition.
To meet with a C level officer at a large company often takes more than 60 days, dozens of calls, emails and snail mail packages. Once the appointment is aquired, how long does your team spemnd "prepping" for this appoitment? 90% of all sales people spend less time prepping for the appt than they did preparing a cold call script. An executive knows IN THE FIRST 5 MINUTES if he is going to give you "just 15 minutes of his time" or the whole hour. These aren't doctors, they don't block off their calendars in 15 minute increments - if they take an appt, they block an hour. If you are kicked out early chances are - you spent the first 5 minutes talking about golf, talking about yourself, or failing to ask the right questions. Find an annual report and calculate the $ per hour for the CIO of Home Depot, Morgan Stanley, etc. Then figure out if his/her time is well spent listening to most of your sales calls. beccak@mindspring.com for more info