4♥️ The carrot and the stick: Rethinking sales motivation 

One of the most painful learning experiences of my career as a business leader was understanding how to motivate sales forces and the challenge of keeping sales people motivated and achieving consistent performance.

Problem or challenge

Many leaders rely solely on incentives like commissions and bonuses to motivate their sales team. This approach can be effective with some individuals, but it fails to consider the diverse needs and motivations of salespeople at different stages of their careers.

For example, a salesperson early in their career might be highly motivated by financial rewards, while a more seasoned salesperson might prioritise work-life balance or a sense of purpose.

Complexities

The challenge lies in understanding what truly motivates individual salespeople. A one-size-fits-all approach with just incentives can backfire, leading to a demotivated team and potentially high staff turnover.

Solution

This tip advocates for a two-pronged approach to sales motivation:

• Incentives (Carrot): Incentive programs with commissions and bonuses can still be a valuable tool to motivate your salespeople that are driven by financial rewards. Recognise and reward top performers to encourage healthy competition and inspire others to strive for excellence.

• Minimum standards (Stick): Establish clear and achievable minimum performance standards. This sets a performance bar and ensures salespeople contribute a baseline level of sales activity. Underperformers who consistently fail to meet these minimums may not be a good fit for your team.

Benefits

This approach offers several benefits:

• Improved performance: By combining incentives with clear expectations, your salespeople are held accountable for achieving results while still being motivated by the potential for higher rewards. 

• Differentiation: Incentives and rewards, or the absence of incentives or rewards, that are in line with your employees motivations can result  in a more engaged and effective workforce. 

• Better team fit: The "stick" aspect helps identify and remove salespeople who are not generating a profit for the business. This allows you to focus on and invest in developing high performers.

• Clear communication: Setting clear standards ensures everyone is on the same page about expectations and eliminates confusion.

Why it works

This approach caters to different motivators. Incentives appeal to those driven by financial gain, while clear standards provide a sense of direction and purpose for others. Additionally, weeding out underperformers creates a more focused and productive sales team.

Measurement

Track sales figures, quotas achieved, and employee turnover to assess the effectiveness of this approach. Analyse if the incentive structure is motivating increased sales and if the performance standards are weeding out unproductive team members.

My story, sources and references

As I commented in the introduction this is something I learnt very painfully. My sales origin was working with highly motivated ambitious people. Looking back I realise as CEO I found them pretty easy to motivate. Offer them the carrot of a big income and they would do what was necessary!

It was later in my career when I discovered the carrot didn’t work with wizened old hands who’s ambitions were for an easy life and time on the golf course more than a nice Porsche.  I’m not saying they wouldn’t have liked a Porsche and indeed they played the game of pretending to be motivated by such things. But it was only when I spent quite a few days shadowing them in their roles by sitting with them for the full day I really understood their true motivations. I’m not even sure they realised it themselves!