B2B sales is both challenging and rewarding. Between the psychology of each interaction, the art of persuasion, and the compensation, sales can be an exciting and fulfilling job.
At times though, the recurring rejections, high sales quotas, long sales cycles, and unexpected product pivots can wear on salespeople. Also, it’s hard for sales reps to stay motivated when individual or team performance falls short of expectations. This cycle can turn into a slippery slope as disengaged employees are more likely to underperform.
In some instances, disengaged salespeople may resign or a manager may terminate them. Average turnover rates are alarming for many organizations.
Data from a 2015 Bridge Group study shows that average sales rep turnover is 34 per cent among 342 software as a service (SaaS) companies surveyed.
Among those employers, one in 10 had sales rep turnover rates above 55 per cent.
Aside from the productivity loss and replacement costs when sales staff leave, a rotating door of salespeople can dampen team morale. Generally, the most successful sales teams have strong employee retention because they have highly motivated sales reps.
Below, we explore different strategies to motivate sales teams so you can build, scale, and grow your business sustainably.
Traditionally, managers use incentives to motivate salespeople and disincentives to discourage underperformance.
Positive reinforcers include:
Negative consequences include:
Bonus limits or forfeiture
Reassignment to less-favorable sales territories
Mandatory workshops to refresh product knowledge or sales skills
While these tactics worked decades ago, modern sales teams require a different approach to keep staff engaged and productive. To answer the question of “how to motivate a sales team,” sales leadership needs to understand the social science behind motivation.
Forward-thinking brands need to think beyond motivation strategies tied to extrinsic rewards and punishments, explains business analyst and best-selling author Daniel Pink. “Traditional management is fine if you want compliance. Twentieth-century motivators do work but only in a narrow band of circumstances.” The narrow band of circumstances Pink refers to are basic, straightforward tasks that require little flexibility, critical thinking, or problem-solving abilities.
Enterprise sales and B2B sales do not fall into the narrow band. Today’s sales situations require a mastery of three key elements:
Business and sales acumen
Pink points to numerous studies over the past 40 years showing that rewards tied to behaviour or contingent motivators can decrease performance on tasks that require cognitive skills.
Gradually, companies should shift away from motivating salespeople with only extrinsic rewards, such as perks, prizes, and cash. Instead, managers should focus more on intrinsic rewards.
Before further explaining intrinsic rewards and how to motivate your team, let’s make it clear that compensation plans matter.
Pink advocates paying employees enough so that they don’t worry about money. A 2010 study from Princeton University found that happiness does, to some extent, have a price. And that price is $75,000 per year. Any income beyond that point, while nice, does not have a material impact on a person’s emotional wellbeing. While we should shift the $75,000 salary benchmark to account for inflation and cost-of-living, the underlying fact remains that more money isn’t the solution for happiness. Instead, other factors drive people and can cause them to feel engaged or disengaged on the job.
When managers allow individuals to focus on tasks in a way that matters to them, the outcomes are greater than within the traditional reward system.
Pink asserts businesses have largely ignored the past 40 years of social science research on how to motivate sales teams. Learning the value of intrinsic motivators “is one of the most robust findings of social science and also one of the most ignored,” emphasizes Pink. “The solution is not to do more of the wrong things . . . to entice with a sweeter carrot or threaten with a sharper stick.”
The question of how to motivate people, especially how to motivate salespeople, has long been a puzzle. To make a meaningful impact, Pink insists, requires the use of intrinsic motivation. The three principles of motivation Pink advocates are:
Sales teams feel a greater sense of ownership and motivation when businesses give their employees more flexibility to decide these factors.
Priorities: Allow salespeople to focus on higher-impact projects and avoid micromanaging them.
Schedules: If possible, give sales reps the freedom to set their hours as long as they get the work done.
Goals: Set personal performance benchmarks that avoid placing excess or undue pressure.
Work habits: Give employees the opportunity to adjust where and how they do their work as needed; for instance, allow them to telecommute.
While scheduling autonomy may be difficult in a call center or customer service setting where employees need to cover hours, you can increase autonomy in other areas. For example, you may want to allow sales or customer service reps to establish their own goals and choose metrics.
The second tenet of sales motivation is mastery. When a salesperson or team has a slump, it may indicate an underlying skills gap. One way to motivate your sales team is to proactively provide them with training and tools to help them succeed.
When companies invest in resources that make selling easier, sales reps are more likely to feel fulfilled at their jobs and outperform their peers. Companies may benefit from providing staff with these resources.
Courses that cultivate critical thinking skills
Coaching and trainings that enhance business and sales acumen
Sales enablement resources such as marketing collateral, case studies, and contract templates
Technology that saves sales reps time, builds better presentations, analyzes customer data, and configures complex quotes
As sales reps become better equipped to handle all types of sales scenarios, they find more opportunities to deliver value at each customer touchpoint. They also have the bandwidth to focus on higher-impact aspects of the sales funnel. The right sales skills can be taught. Therefore, sales organizations must commit to empowering their staff with better skills and tools and more effective closing techniques.
As companies invest in sales automation and enablement, reps have more time and headspace to pay attention to crucial customer details, signals, and needs. They may be able to tweak their sales pitches and tap into more effective sales closing techniques.
For the best results, both managers and salespeople should have the opportunity for mastery. In the book Cracking the Sales Management Code, sales expert Jason Jordan explains that the biggest problem of mastery comes when sales managers are not equipped with the skills to help their sales teams set and meet the right goals.
”With extremely rare exception,” teaches Jordan, “the best sales managers we’ve encountered are unconsciously competent scientists. They hold formal meetings with formal agendas on formal schedules. They set rigorous expectations for their salespeople and track progress against those goals with equal rigor. They manage by analysis rather than anecdote and by measurement rather than gut. They are continuous-improvement experts with action plans galore.”
Before sales managers can solve the problem of how to motivate sales teams, they must be disciplined, experienced, and competent sellers themselves. A great sales manager can motivate sales reps to master the skills needed to achieve.
The last key to motivating people is purpose. Largely, says Pink, people achieve more when they serve a mission larger than themselves. As a company, seek to define a purpose beyond profit. Your purpose may be to deliver the best product or service for your customer or tangibly create value for the end-user.
Embrace values such as excellence, service, and teamwork. A sense of purpose becomes even clearer when companies team with charitable organizations.
Foster a business environment of cooperation and friendly competition to ensure everyone lifts each other while striving for excellence. Gamifying performance can help a culture strive for a larger purpose. Some companies use their CRM dashboards to track personal goals for department-wide or organization-wide contests, which brings people together and solidifies relationships. When companies use gamification to help charity, sales incentive programs take on a purpose higher than increasing the bottom line.
To help boost motivation, managers should train salespeople to set effective goals. When done right, setting goals increases motivation and achievement. Motivated people target specific objectives, which improves motivation. Just as confidence breeds more confidence and success leads to more success, achieving goals snowballs into further accomplishments.
The trick is to teach sales reps how to start the goal setting and achievement cycle. First, it’s important to set the right kind of objectives. Sales leaders should help their teams determine realistic goals that account for:
Required ramp up time
A strategically staggered pace
The smartest goals focus on behaviour you can control. Consider your sales funnel, for instance. Imagine that with every 100 calls, your team generates 20 sales leads, six make it to the proposal stage, and you convert two into paying customers. To increase your sales, you can focus on increasing your outbound call volume. Assuming conversion rates at each stage of the funnel remain the same, you can double your sales if you double your outbound calls. Among some sales reps, the linear growth here can be motivating because they know additional hard work can pay off.
For effective goal setting, your goals must be:
Specific rather than broad
Time-limited to create urgency and accountability
Achievable, which factors in the resources at your disposal
Measurable so you can quantify the results
Goals can have unintended negative consequences. Jason Jordan explains that choosing the wrong metrics and goals “creates a culture of inspection.” If leadership and employees focus too intently on the wrong goals, they create an atmosphere of “compliance and anxiety.”
Instead, companies should let their sales team choose their targets (autonomy), train sales managers to coach instead of inspecting progress (mastery), and sponsor initiatives to serve their customers or community (purpose).
Intrinsic rewards, the motivations that come from within, are the secret to motivate sales teams. Business practice, however, doesn’t often mirror the research. “There is a mismatch between what social science knows and what business does,” argues Pink. Money is important to salespeople, but if your company wants to do well, money or any other carrot shouldn’t be your sales team’s only motivator.
In setting goals and using CRM dashboard metrics to monitor objectives, organizations need to avoid creating a culture of anxiety and inspection over numbers. Skilled sales leaders should understand how to train their sales force to establish effective goals and achieve sales.
Sales reps are motivated by autonomy, mastery, and purpose. When companies put them in a situation where they have some control over their circumstances, they can excel at their tasks, find a larger purpose, and help sales flourish.