Reading Reflection-Motivating Salespeople: What Really Works

Reading reflection-Motivating salespeople: what really works

The article by Thomas Steenburgh and Michael Ahearne discussed about a better approach to make compensation plan. How to compensate salespeople is always at or near the top of the list of problems met by sales executives. A company’s salesforce are made of stars, laggards, and core performers .Thomas Steenburgh and Michael Ahearne suggested that they should be motivated by different facts of compensation plans.

Core performance, as the largest group while always be ignored, is suggested to motivated by multi-tiered targets, which guide them make more efforts, as well as by the contests with low-level prizes that seen equal or even superior to high-level prizes, which inspire them to work and perform better. To motivate laggards group, executives can plan quarterly bonuses to make them stay on track. It is also suggested to motivate them by social pressure from sales bench. When comes to the star group, no ceiling on commissions and overachievement commissions are encouraged to increase stars’ sales.  A contest with multi-winners can also motivate stars to work harder.

After reading the article, I realized that the compensation rewards cannot be neglected. Sales have important impact on revenue, customized compensation plan may generate higher return for companies. I agree that core performance group should be payed extra attention as they are the majority in the sales group. It is important to consider them as a crucial part of compensation plan as the total improving performance makes great impact on the revenue. No cap on the commission is also a good practice. The sales’ productivity is always motivated by salary. My previous working experience in retail was a good example. Different brands had quite different salaries for the same level sales association for the same level brands.  One important reason was the cap on the commission. It led to a big difference in revenue. Brands without ceilings always ranked the top among ones with ceilings. For the prizes of contests, it was important to know what the sales likes as different people may see the prizes differently. Gift-like prizes were always presented in retailing compensation plan as they would use products to incentive sales performance. However, if the products were owned by sales already or were some unmarketable goods, sales may not appreciate that.  In the article, it is suggested that program-induced social pressure on laggard should be implemented. It can be a “Double-edged sword” that motivates laggard to enhance the sales, on the other hand, gives pressure on them. Thus, the plan should be run carefully and align with company’s culture.