I hear this very often, "Dave, your assessment said that Joe was not money-motivated but I disagree.  It seems like Joe is in here every month asking for more money."

Me: "Tell me about that."

Client: "Well, he says he isn't earning as much as he's worth, so he hits us up for more salary or demands an increase in commissions."

Me: "So, what you are saying is that he is demanding that you pay him more money."

Client: "That's right."

Me: "In my experience, a money-motivated salesperson simply sells more to earn more.  That's the motivated part of money-motivated.  It seems that rather than doing that, Joe is asking you to give him more money.  He feels entitled, but isn't doing anything about earning it.  It's like he's on welfare and you're the government."

Client: "Ouch. Thanks."

Money motivation tends to be very confusing to people but there is a huge distinction between being motivated to perform versus feeling entitled to more money.  What do you have on your sales force?

There will be a couple of opportunities to hear me and other top sales experts this month (January 2012).

On Monday, January 23 at 2PM ET, I will be on a panel along with Tom Ziglar (Zig's "kid") and Lisa Cramer.  Host Michael Nick will be discussing the Future of Selling and it should be a very insightful 45-minute teleconference.  You can learn more and register here.

On Wednesday, January 25 at Noon ET, I will be on a panel with 3 other sales experts when host Dave Stein, CEO of ESResearch, discusses Sales Leadership Strategies in a Virtual, Mobile and Social World.  Stein will host additional panel discussions on a variety of topics during January and February.  To register for my session, click here.  For information and/or to register for the other sessions, click here.

This is my final post of 2011 so as my holiday gift to you I have included links to original articles I have written for other sites, links to some articles on this site, and links to two recent interviews.  All in all, there is enough material here to more than make up for the 10 days I won't be writing!

What are the Best Answers to Sales Interview Questions? is a terrific guide to the questions you should be asking, as well as what to look for in your candidates' answers.  I wrote this article for task.fm.

I also wrote How Do You Best Select a Candidate to Hire? and How Do You Manage Salespeople in a Startup Environment? for task.fm

Speaking of interviews, here are two interviews that were recently conducted with me:

Aaron Ross interviewed me for his Predictable Revenue Blog where the topics included sales process, music and fatherhood.  There is an article and the interview is here on audio.

Brendan Cournoyer interviewed me for OpenView Labs where the topic was Which Sales Competencies Matter Most? A transcript of the interview and audio are both on the page.

I wrote six articles for the Alister Paine blog.  They include: 

The Key to Driving Revenue 
How to Close More Business
Incentivizing Your Sales Force 
How to Predict and Prevent Sales Turnover 
What to Do With Your Useless Sales Pipeline
The Pros and Cons of Hiring Green Salespeople.

2011 was a terrific year.  My Blog won the Gold for Top Sales & Marketing Blog of 2011, my article, Money Motivated Salespeople a Dying Breed (there were two follow ups to that article; The Offer is here and Non-Stop Sales Motivator is here) won the Silver for Top Sales & Marketing Blog Post of 2011, Objective Management Group won the Gold for Top Sales Assessment Tool of 2011, and I was a finalist for Top Sales & Marketing Thought Leader of 2011.  Thanks to the panel of expert judges for their decisions and to all of the readers that lended their support with the popular vote.

Have a great holiday!

Have a wonderful holiday and I'll be back in two weeks with more to disucss.

Yesterday, I began a discussion about sales longevity or, if you prefer, turnover.  What are the factors that lead to turnover and how much of that can be predicted?  Start with yesterday's article on How Long Will a Salesperson Stick?

Get ready for a discussion that is backed by data - more Science of Sales Force Management stuff!  Speaking of science, my guest on this week's episode of Meet the Sales Experts, Lee Levitt, had a lot to say about Pipeline Coverage and Shape, metrics and 5 powerful tips for Sales Force Effectiveness.  Click here to listen to the show.

Salesperson Longevity - What Did We Find?

I mined the data and it wasn't easy!  Some of the factors I expected to see just didn't materialize. For example, I assumed that money motivation would make a difference.  Wrong.  Not even a tiny difference. A money motivated salesperson is not even 1% more likely to stick than one who isn't motivated by money.  I assumed that salespeople who were paid mostly on salary might tend to stick around longer than their colleagues who were paid mostly by commission.  Wrong.  I thought that there was a chance that stronger salespeople stuck around longer than weaker salespeople.  Wrong again.

So what did I learn?  Here are the Top Five Factors to Predict Sales Turnover / Longevity

The most important factor in predicting sales longevity is --- EXPERIENCE!  Salespeople with at least 5 years of sales experience are far more likely to stick than those without 5 years of experience.

Factor #2 has little to do with the salesperson but everything to do with Sales Longevity.  It's how closely sales management will manage the salesperson.  Salespeople who were not closely managed simply didn't stick around as long.  I had to draw a conclusion relative to whether the turnover was voluntary or involuntary. I concluded that salespeople who were more or less ignored and also under performing likely reached a point where the company gave up and terminated them. I also concluded that salespeople who performed but were ignored probably left on their own.  But whether or not you agree with my conclusions, don't miss the bigger point.  Closely managing your salespeople leads to sales longevity in your company.

Factor #3 is the compensation plan.  Salespeople who are compensated mostly by commission are more likely to stick than salespeople who are compensated mostly by salary.  Why? Salaried salespeople and those with limited bonus opportunities, reach a point where they need more money.  Does this contradict the money motivation finding?  No.  This is need versus want.  They'll leave when they need more money.  Money motivated salespeople simply want more money and sell more to earn it.

Factor #4 is a reverse factor finding.  Huh?  Objective Management Group (OMG) has a powerful finding called the Figure it Out Factor or FIOF.  It's a score that accurately predicts how quickly a new salesperson will ramp up in their new positions.  A score of greater than 75 identifies candidates in this group.  Well, these same salespeople, the ones who will ramp up more quickly, are LESS likely to stick!  Yes, they'll have an immediate impact, but they will tend to not have sales longevity in your company.  Salespeople with low FIOF scores are the ones who are most likely to stick.  Slow starters, big finishers!

Factor #5 is another reverse factor finding.  OMG has another score called Sales Quotient (SQ) which allows companies to rank their hirable candidates. Strong salespeople have SQ's over 135 and the elite have scores over 145.  But these real strong salespeople - A Players - aren't the ones who are most likely to stick.  Rather, salespeople with SQ's between 110 and 130 - B Players - have the greatest sales longevity.

Summary:The good news is that there are five specific factors that allow us to predict sales longevity.  The bad news is that these factors are inconsistent with the factors that allow us to identify and predict who the top performers will be.  So it raises a new question.  Should you be striving to hire A Players - those with high Sales Quotient and Ramp up Scores or should you be hiring for Sales Longevity - B Players who will stick around longer?

Verne Harnish, the Growth Guy, and I had this very discussion  over email this morning.  He said, "small companies can do both".  He said that "entrepreneurial firms should go after experience - we don't have time to ramp up someone - let the big companies train!" He also said that "companies should go for A players with more than 5 years of experience", something that  both Neil Rackham (SPIN Selling and Rethinking the Sales Force) and Brad and Geoff Smart, (Topgrading) have been saying right along.  However, our data shows that only 16% of the A players with experience stick for more than two years. And that brings us back to the original question. 

What do you think - A's or Longevity?  Should the answer be a direct relation to the length of your sales cycle?  Should you go for longevity when you have a long sales cycle and for A's when you have a short sales cycle? We're interested in what you have to say!

Arno was kind enough to point my attention to this great video presentation from Dan Pink on the science of motivation. 

Dan uses science, examples and case histories to tell us that almost everything we thought about motivation is wrong....or is it?

He never mentioned sales, selling, the sales force and salespeople specifically, but we do know that he said this:

"When the focus and goal are clear - incentives work great."  

That condition is certainly in play for incentive programs, contests, rewards and awards.  And it's in play for many compensation plans too.  But are the focus and goal always clear?  When salespeople take our assessments, one of the questions asks by how much they exceeded or missed their quota or goal.  The data shows that a significant percentage of salespeople don't have a goal or a quota!  He also said:

"When you don't want the worker focused, and you want them thinking on the periphery, then incentives don't work."

That condition is certainly in play for new companies and start-ups who are finding their way, finding a market, finding partners, and have no existing revenue stream.  A salary is the appropriate way to compensate the first salespeople on board in this scenario.

If we look at the data from the 450,000 salespeople who have been assessed by Objective Management Group, the percentage of findings which show lack of money motivation (especially among higher income earners) has been increasing each year.  It's not that they aren't money-motivated anymore, as much as they aren't as money-motivated as they were earlier in their career, when their money-motivation got them to their current income level.

The bottom line for your salespeople is that everyone is different.  Everyone is motivated by different things and for those who are clearly motivated by money, and where you have a clear goal and focus for them, their compensation should and must be commission-based.  When you have people who are motivated more by recognition, awards, competition, time-off, public service, or philanthropy, your compensation program should be flexible enough to compensate them in an appropriate manner too.

If you found this article helpful, you might find these articles on the subject of sales motivation helpful too:

The Future of Selling - Understanding This Crucial Sales Competency is More Important Than Ever

I was in New Orleans speaking at the Gazelles Coaches Summit, a prelude to the Fortune Magazine Sales Summit. I was asked a question about cultural differences with the Sales Force Evaluation: Is the lack of Money Motivation on an entire sales force in Ireland a cultural difference? My questioner went on to say that the good people of Ireland, when asked if they would like a cup of tea, need to be asked three times before they'll say yes - even though they really want that cup of tea.

The Money Motivation issue has only three possible outcomes:
1. Everyone is money motivated
2. Some of them are money motivated
3. None of them are money motivated

It shouldn't surprise you to learn that #2 is the most common finding and we can break that finding down even further:
1. Most of them are money motivated
2. Most of them are not money motivated
3. About half of them are money motivated

I frequently see American sales forces where none of the salespeople are money motivated yet I am never asked if it's a cultural issue.  You may recall this post about the Japanese sales force where the sales engineers all lacked Commitment. When an entire American sales force has a Commitment problem I am never asked if it could be a cultural issue so why the cultural questions?

Let's pretend that you just learned that none of your salespeople are motivated to earn more money (the actual finding is "not motivated to earn more money" as opposed to "not money motivated"). Wouldn't you be thinking, "That's impossible - There has got to be a mistake"? You would, but what kind of mistake would lead to a finding like that? If the finding was true it would mean that you hired the wrong people, so maybe the assessment is invalid.  And if you are in another country you would ask, "Could this be a cultural difference?"

What is really going on?

The Money Motivated finding is usually directly related to compensation. When an entire sales force is Not Motivated to Earn More Money, I can guarantee that the compensation is all or mostly salary. Who will take an assignment like that? Salespeople that put a premium on a sure thing, prefer to be associated with a large company, or are risk-averse. Those people would probably not take a position where a large part of their income is derived from commission. Conversely, when the entire sales force is Motivated to Earn More Money, the compensation plan is usually weighted more heavily toward commissions. So the all or nothing findings are more indicative of the company's compensation plan than anything else.

So when is the finding more meaningful?

Let's say we have 10 salespeople on a compensation plan that's weighted more toward commission. 8 of the 10 show up as Money Motivated and 2 don't. In this scenario, the 2 who aren't motivated to earn more money could be problematic when it comes time to develop them and attempt to improve their performance. Or, let's take the same sales force of 10 on a compensation plan weighted more heavily toward salary and 8 of the 10 show up as Not Motivated to Earn More Money. The other two? It would be worth changing their compensation in order to provide an opportunity to earn more if they sell more.

Back to Ireland and the Culture.

Chances are, this sales force simply has a group of people that aren't motivated to earn more money working on a compensation plan weighted toward salary. If it was merely a case of not honestly answering the questions, then we would have to question all of the findings. Because Money Motivated was the only finding that was challenged, it is safe to say that culture had no impact on the finding.

(c) Copyright 2009 Dave Kurlan