Why You Should Care That Sales Motivation Data Correlates Perfectly With Sales Effectiveness

Posted by Dave Kurlan on Tue, Sep 12, 2017 @ 21:09 PM

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What was your reaction when you saw that the water in Tampa Bay was sucked away by Hurricane Irma?  How about when you saw the total eclipse?  Or the Cajun Army rescuing thousands in Houston?  Now, I don't want to equate my news with the enormity of Hurricane Harvey or Hurricane Irma, but when I first saw the data, my reaction was exactly the same.  I said, "Wow - didn't see that coming."

This summer, Objective Management Group (OMG) added and began testing for Altruistic Motivation as one of 3 types of Sales Motivation.  Sales Motivation is one of the 21 Sales Core Competencies OMG measures. OMG had been measuring Extrinsic and Intrinsic Motivation in its Sales Force Evaluations and Sales Candidate Assessments and it recently updated its algorithm for measuring total sales motivation.  You can read more about that here.

Today I was able to look at the 7,500 new rows of data accumulated since this update went live about 8 weeks ago and the data exceeded my expectations.  Take a look at this!

In the table below, you'll see that extrinsic motivation is most prevalent in the top group of salespeople while altruistic motivation is most prevalent in the lowest group of salespeople.  You'll also see the correlation between overall sales motivation and performance.  

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With this data correlating so perfectly, the most important question to ask is, what does it mean?

Recently there have been several articles that suggest we should eliminate commission salespeople and begin paying everyone a salary.  That would REALLY appeal to the bottom 10% with 73% of them being either intrinsic or altruistic.  The majority of the bottom 10%, especially the 35% who are altruistically motivated, should be in customer service.  Customer service doesn't pay as well but that is the role in which they could become top performers by being of service to others.

What do you suppose would happen to the performance of the top 23% when they are faced with being paid the exact same amount as their under performing colleagues?  Say goodbye to their quota crashing performance!

Looking forward, our biggest challenge is that most millennials tend to be intrinsically motivated.  Read this terrific article and look at the data comparing millennials to top salespeople.  While overall motivation is nearly identical in all four groups, millennials have an average Sales Quotient of just 108.  You can see in the table above that a score of 108 puts them in the category of weak salespeople where the overwhelming majority of that are intrinsically motivated.  It's not a stretch to draw the conclusion that the majority of salespeople in the weak category could be millennials.

The best way to incentivize salespeople will continue to be an ongoing topic of discussion.  Those who think that a prospect's interests are best served when salespeople are not on commission are misguided. The reality is that the top two groups of salespeople don't act in a way that makes prospects feel like they are being sold something.  People buy from them because they build relationships, are consultative, listen and ask great questions, and understand the problems that need to be solved.  Weaker salespeople are transactional, rely on presentations and demos, and appear to be more interested in making a sale than solving a problem.  Most of the experts who weigh in on this matter have it backwards.  Like all of the inbound writers who several years ago predicted that sales was dead and inbound was king, these suggestions are nothing more than fake news.

Salespeople who are intrinsically motivated would prefer to be compensated with a salary and perhaps a bonus for performance while extrinsically motivated salespeople would prefer the plan that offered the sky as the limit.

The biggest change for companies is the need to understand how to motivate intrinsics.  Traditional sales motivators like commissions, competition, contests, and awards do not motivate intrinsics. They want to be part of something bigger than themselves, would like to change the world, want to achieve mastery, sell because they love it, and do it for personal satisfaction.  How can you motivate them and more specifically, how can you motivate them to become better as a group than their current state of weak?

Topics: Dave Kurlan, sales motivation, sales compensation, commission sales, sales assessments, altruistic motivation

A Different Look at Sales Compensation

Posted by Dave Kurlan on Fri, Apr 06, 2012 @ 10:04 AM

Sales Commission Calculator resized 600The pros and cons of both commission-based sales positions and salaried positions have been well-documented, so we won't be discussing that in this article.  Let's talk about something other than questioning which compensation plan is best for your company and its salespeople.

Suppose you're eyeing a new gadget; however, this must-have toy will set you back $5,000.  What if you also need to replace a couple home appliances, spend $20,000 on a landscaping project, pay for a funeral, dish out for a European vacation, and endure a new college tuition?  After all of that supposing, the calculator shows that you need to come up with around $75,000 - soon.

With a salaried position, salespeople are essentially on a fixed income - perhaps a more attractive fixed income than a retiree, but fixed none the less.  And these days, with most people living at or above their means, fixed simply becomes another word for broke!  The thought of coming up with $75,000 in discretionary funds is daunting unless a salesperson is the rare exception who has been squirreling away most of his income.  This is the world of the salaried salesperson.  Play it safe, but don't expect any big commission checks.

With a commission-based plan, the salesperson simply makes a decision to step it up.  How much more do they need to sell in order to earn an extra $75,000 this quarter?  Can they do it?  Can they come close?  This is how the commission-based salesperson thinks and functions.  Make a financial commitment to something and then earn the money to pay for it.  Of course, the obvious downside to this scenario is this:  If this salesperson doesn't have a big financial commitment at this time, there is a possibility for a period of complacency where s/he doesn't work as hard until performance finally suffers or the next financial opportunity appears.  While this does happen on occasion, it is an ongoing risk with salaried salespeople.

Even if you see the obvious advantage to commission sales (it doesn't have to be 100% commission-based), you can't easily change from salary to commission.  Why?  Most of your sales force will quit!  If they wanted to work in a commission sales environment, they wouldn't have gone to work for you in the first place...

There is a compromise though.  You can make both groups of salespeople happy.  I wrote this article two years ago to illustrate exactly how you can make this possible.

Sales Force Compensation is just one of many important topics we will discuss at Kurlan and Associate, Inc.'s Sales Leadership Event May 10-11 in Boston.

Topics: Dave Kurlan, sales leadership, sales management training, sales compensation, commission sales, salaried sales

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About Dave

Best-Selling Author, Keynote Speaker and Sales Thought Leader.  Dave Kurlan's Understanding the Sales Force Blog has earned a medal for the Top Sales & Marketing Blog award for six consecutive years.  Dave's Blog earned a Bronze Medal in 2016 and this article earned a Bronze Medal for Top Sales Blog post in 2016. Read more about Dave.

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