Motivation What is Motivation?? Drive to initiate an action. The intensity of effort in an action The persistence of effort over time.

Motivation

What is Motivation??

• Drive to initiate an action.

• The intensity of effort in an action

• The persistence of effort over time.

Motivation

Reasons for Motivating Salespeople

• Frequent rejection

• Physical separation from company

support

• Direct influence on quality of sales

presentation

• Indirect influence on performance

MotivationDetermining Your Motivational Needs

Second Number to left of statement indicates the category; how many in each:

Number Category

1 Physiological

2 Safety - Security

3 Love - Belonging

4 Self Esteem

5 Self Actualization

Motivation

Maslow’s Hierarchy of Needs• Self-actualization Intense job challenge,

creative expansion• Esteem Achievement, respect,

recognition

• Belonging Acceptance, affection, family

• Safety & security Stability, dependency, protection, structure, pension, law & order

• Physiological Hunger, thirst, shelter, clothing

MotivationMaslow’s Hierarchy -- Salespeople’s responses

Number Percent Number Percent

847 86% 431 51%

955 80% 654 40% 341 74% 722 39%

352 66% 836 37%

256 63% 458 37%

559 57% 853 37%

757 54% 718 34%

Motivation

INDIVIDUAL NEEDS

Maslow’s RelatedHierarchy Sales Forceof Needs Motivators

• Self-actualization Challenging tasks calling for creativity

• Esteem Recognition programs

• Belonging President’s Club $1 mil.

• Safety & security Job security & fringes

• Physiological Cash wages & bonuses

Motivation

Herzberg’s Hygiene-Motivation Theory

• Based on in-depth analysis of engineers

(Transparency 13-7)

• Do these results generalize to salespeople?

Motivation

Career Stages (13-8)

• Does everyone go through these stages?

• What can be done to address the concerns of

management at each stage?

• How can sales managers address the

management concerns at each stage?

Motivation

Career Stage Research Findings

• Hospital Market (13-9): 1984 Study of 250

distributor salespeople with 28 wholesalers of

disposable medical supplies. Commission

compensation plan.

Motivation

Career Stage Research Findings• Job Satisfaction and Career Concerns (13-10)

220 Salespeople -- Large Industrial Organization:

– all are least satisfied with promotion & pay

– pay satisfaction is only dimension on which sales

people are more satisfied than establishment or

maintenance salespeople

– maintenance salespeople are less satisfied with

supervision than are establishment salespeople

Motivation

Career Stage Research Findings

Career Concerns and Age (13-11)

200 Salespeople -- Large Industrial Organization:

• Note proportion of people in each stage

• Note overlap in ages of people in each stage

• Disengagement as well as maintenance occurs

quite early for some people --

Is this a management concern?

MotivationGiving Status to Salespeople

1. Compensation -- exceed first-line managers

2. Job Title -- no cost but considerable payback

3. Company Car Upgrade -- salespeople spend much time in car - reminds them of their value.

4. Car Phone -- justified on a purely business basis

5. Field Sales Council -- meet president for 1/2 day open-ended discussion on field marketing conditions - report back to field meetings the results

6.Outside Secretarial Support -- or more exclusive central.

7. Published Success Stories -- high form of recognition

8. Task Force Assignments -- e.g., review of all paperwork.

Motivation

A Model: Expectancy Theory System Effort Performance Reward

Expectancy Instrumentality Valence

Likelihood Likelihood Importance

increased greater of receiving

effort performance more of

will lead to will lead to certain

greater more rewards

performance rewards

MotivationExpectancy Theory

• A more complete theory

• Focuses on process of motivation

• Maslow & Herzberg focus on only one aspect of the process: reward importance

• Systematic approach with multiple reasons for a lack of greater effort

• Indicates where management should direct its attention to sales force as a whole or to an individual

• What may account for a lack of greater effort in an individual salesperson?

MotivationRole Perceptions

• Sales is a boundary spanning position -- you must be responsive to expectations of multiple people.

CompanySales

Manager Customers Family

Salesperson’s Role Perceptions

• Expectations: What do others expect me to do?• Ambiguity: How sure am I about what others expect?• Accuracy: Is what I think what they really expect?• Conflict: Does meeting expectations of one person

mean not meeting the expectations of another?

13-14

Motivation

Role Perceptions• Typical Sales Job Activities (13-15)

• Where is their potential for the following:

– Ambiguity

– Lack of Accuracy

– Conflict

MotivationBehavioral Self-Management (BSM)

(T13-16)• How do these BSM techniques relate to the

motivation theories -- Maslow, Expectancy, etc.?

• How will career stages affect this process?

• Devise a BSM for taking more complete class notes.

• Devise a BSM for making more sales presentations for a key product group- e.g., PCs

• What is the role of management in BSM??

MotivationA Self-Contract (13-17)

• Clear detailed description of behavior targeted for change.

• How behavior is to be observed, measured & recorded

• Detail of criterion for reinforcement

• Designates the reinforcement

• Stipulates the negative consequences of not fulfilling contract

• Sets timing for delivering reinforcement

Motivation

Role Play 13-1

1. What should be taken into account by top

management when setting sales goals for

next year?

2. Under what circumstances might a 20%

sales quota increase be justified?

3. What is the role of first-line, field sales

managers in setting quotas?

Motivation

Role Play 13-1

4. How should a district manager allocate the district’s quota to individual salespeople; that is, what factors should be taken into consideration?

5. How should the two salespeople’s requests be handled?

6. What problems may exist with this company’s process of setting quotas?

MotivationExpectancy Theory

• A more complete theory

• Focuses on process of motivation

• Maslow & Herzberg focus on only one aspect of the process: reward importance

• Systematic approach with multiple reasons for a lack of greater effort

• Indicates where management should direct its attention to sales force as a whole or to an individual

• What may account for a lack of greater effort in an individual salesperson?

MotivationDetermining Your Motivational Needs

Second Number to left of statement indicates the category; how many in each:

Number Category

1 Physiological

2 Safety - Security

3 Love - Belonging

4 Self Esteem

5 Self Actualization

Figure 13-1: Sales Forced Needs and Ways to Fill Them

Sales Force Needs Company Actions to Fill Needs

Status Change title from “salesperson” to “area manager.”Buy salespeople more luxurious cars to drive.

Control Allow salespeople to help plan sales quotas and sequences of calls.

Respect Invite salespeople to gatherings of top executives.Put pictures of top salespeople in company ads andnewsletters.

Routine Assign each salesperson a core of loyal customers thatare called on regularly.

Accomplishment Set reasonable goals for the number of calls and sales.Stimulation Run short-term sales contests.

Schedule sales meetings in exotic locations.Honesty Deliver promptly all rewards and benefits promised.

Figure 13-2: Summary of Classic Motivation Theories

Theory Author DescriptionHierarchy of needs Abraham Maslow Physiological, safety, belonging, esteem,

and self-actualization needs are ranked in ahierarchy from lowest to highest. An individual moves up the hierarchy as a need is substantially realized.

ERG theory Clayton P. Alderfer Hierarchically classifies needs as existence,relatedness, and growth needs. Like Maslow, suggests that people will focus on higher needs as lower needs are satisfied but, unlike Maslow, suggests that people will focus on lower needs if their higher needs are not satisfied.

Motivation-hygiene Frederick Herzberg Argues that intrinsic job factors (e.g.,challenging work, achievement) motivate,whereas extrinsic factors (e.g., pay) onlyplacate employees.

Theory of learned David McClelland Proposes that there are three major needs professional needs: achievement, afflil-

iation, and power. A high need for achievement and affiliation has been relatedto higher sales force performance. A highneed for power has been related to higher sales manager performance.

Equity theory J. Stacy Adams Proposes that people will evaluate theirtreatment in comparison to that of “relevant others” and that motivation will suffer if treatment is perceived to be inequitable.

What Makes Great Salespeople?

The Competitor This person not only wants to win, but derives satisfactionfrom beating specific rivals -- another company or evencolleagues. They tend to verbalize what they are going todo, and then do it.

The Ego-driven They are not interested in beating specific opponents, theyjust want to win. They like to be considered experts, butare prone to feeling slighted, change jobs frequently, andoften take things too personally.

The Achiever This type of person is almost completely self-motivated.They usually set high goals and as soon as they hit onegoal, they move the bar higher. They like accomplishment,regardless of who receives the credit.

The Service-oriented Their strengths lie in building and cultivating relationships.Winning is not everything to this person, but they do respond to feelings of gratitude and friendship from otherpeople.

Motivation

Herzberg’s Hygiene-Motivation Theory

• Based on in-depth analysis of engineers

(Transparency 13-7)

• Do these results generalize to salespeople?

Motivation

In-Class Exercise 13-1

1. What should be taken into account by top

management when setting sales goals for

next year?

2. Under what circumstances might a 20%

sales quota increase be justified?

3. What is the role of first-line, field sales

managers in setting quotas?

Motivation

In-Class Exercise 13-1

4. How should a district manager allocate the district’s quota to individual salespeople; that is, what factors should be taken into consideration?

5. How should the two salespeople’s requests be handled?

6. What problems may exist with this company’s process of setting quotas?

Why the concernfor sales forcemotivation?

Why the concernfor sales forcemotivation?

What are thedifferent theoriesof motivation?

What are thedifferent theoriesof motivation?

Motivation Tools

Self- Quotas Incentive Recognition management programs programs

Motivation Tools

Self- Quotas Incentive Recognition management programs programs

Chapter 13

MotivationQuotas & Reasons for Use

1. Help motivate salespeople2. Direct where to put effort

3. Provide standards for evaluation.1. Sales volume in dollar or point system

• Points allow for different weights for different important products independent of price.

• Points not affected by inflation.• Sales quota may be developed for:

– Total territory sales, and/or– Individual product or product group.

MotivationQuotas - Standards for evaluation

2. Profit-based quotas are rarely based on bottom line profits – Difficult to account for indirect expenses– Profits are usually configured as gross margins

minus some load factor

3. Activity-based quotas are based on activities directly related to sales volume– More directly under control of the salesperson– Biggest problem is falsification of call reports– Issue of quantity vs. quality of activity?

Motivation

Role Perceptions• Typical Sales Job Activities

• Where is their potential for the following:

– Ambiguity

– Lack of Accuracy

– Conflict

Figure 4Job Satisfaction and Career Concerns

+

Average

-

+

Average

-

+

Average

-

+

Average

-

+

Average

-

Supervision Pay

Promotion Job

Co-Worker

Figure 2Relationship Between Career Concerns and Age

Proportion ofCareer Concerns Sales Force

Exploration 14%

Establishment 29%

Maintenance 42%

Disengagement 15%

Age Range

20 30 40 50 60 65

GIVING STATUS TO SALESPEOPLE

1. Compensation

2. Job Title

3. Company Car Upgrade

4. Car Phone

5. Field Sales Council

6. Outside Secretarial Support

7. Published Success Stories

8. Task Force Assignments

Figure 13-5: Model of Motivation

EffortEffort PerformancePerformance RewardsRewards

ExpectancyLikelihood that increasedeffort will lead togreater performance

InstrumentalityLikelihood that greaterperformance will leadto more rewards

ValenceImportance of receivingmore of certain rewards

MotivationRole Perceptions

• Sales is a boundary spanning position -- you must be responsive to expectations of multiple people.

CompanySales

Manager Customers Family

Salesperson’s Role Perceptions

• Expectations: What do others expect me to do?• Ambiguity: How sure am I about what others expect?• Accuracy: Is what I think what they really expect?• Conflict: Does meeting expectations of one person

mean not meeting the expectations of another?

13-14

TYPICAL SALES JOB ACTIVITIES

Job Dimension Activities

SELLING FUNCTION Plan Activities Prepare Presentations

Develop leads Make Presentations

Prospecting Overcome Objections

Identify Decision- Introduce New Products

Makers

WORKING WITH ORDERS Write orders Find last orders

Expedite orders Handle shipping

Handle back orders problems

PRODUCT SERVICING Learn about product Train customers

Test equipment Supervise repairs

Supervise installation Perform maintenance

MANAGING INFORMATION Receive feedback Provide technical

Provide feedback information

SERVICING THE ACCOUNT Stock shelves Count inventory

Set up displays Promote local advertising

ATTENDING CONFERENCES Sales conferences Product exhibitions

Client conferences Training sessions

TRAINING/RECRUITING Recruit new reps Train new reps

Travel with trainees

ENTERTAINING Parties Dinner

Drinks Lunch

TRAVELING Out-of-Town In-Town

DISTRIBUTION Sell through Train

Establish relationships Credit

Source: Adapted from William C. Moncrief, “Selling Activity and Sales Position Taxonomies for Industrial Sales Force,” Journal of Marketing

Research, August, 1986), pp. 266-67.

Figure 13-6: Self-Management Techniques

Technique Method Tools

Self-monitoring Observe and record behavior. Can use diaries, counters, tally sheets, charts.

Goal setting Establish behavior change Should be specific and with a objectives. short time horizon.

Stimulus Modify antecedents to behavior. May involve introducing or control removing cues.

Consequence Modify antecedents to behavior. May involve reinforcement, pun- management ishment, or extinction.

Rehearsal Systematic practice of desired May be overt or visualized. behavior.

Self-contracting Specify the relationship between May involve public commitment. behaviors and their conse-

quences.

Example of a Self-ContractDate

Goal: Increase the number of accounts by 10% in the coming year

Agreement

Self: I agree to call on at least three prospective customers each week throughout the year. In my call report I will

note each new contract made. At the end of the week this information will be transferred to a chart posted

on my office door.

Consequences

If the contract is kept:

After calling on a new customer I will reward myself with a steak dinner and bottle of fine wine.

Each week I call on three or more new customers I will reward myself by playing a round of golf on Saturday morning.

For every new account I secure I will reward myself by playing an extra round of golf on Sunday.

If the contract is broken:

If I fail to contact at least three new customers during the week, I will spend Saturday morning in the office prospecting

for new customers.

Bonus clause:

If I exceed the goal of increasing the number of accounts by 10% before the year is out, I will reward myself with a

weekend trip to Las Vegas.

Signed

Witness

Review Date

Steps to Greater Motivation

1. Define what you want.

2. Inform a special person of your goals.

3. Do something.

4. Don’t let failure deter you.

5. Break down problems into pieces.

6. Set deadlines.

7. Turn work into play.

8. Associate with people who motivate you.

MotivationQuotas & Reasons for Use

1. Help motivate salespeople2. Direct where to put effort

3. Provide standards for evaluation.1. Sales volume in dollar or point system

• Points allow for different weights for different important products independent of price.

• Points not affected by inflation.• Sales quota may be developed for:

– Total territory sales, and/or– Individual product or product group.

MotivationQuotas - Standards for evaluation

2. Profit-based quotas are rarely based on bottom line profits – Difficult to account for indirect expenses– Profits are usually configured as gross margins

minus some load factor

3. Activity-based quotas are based on activities directly related to sales volume– More directly under control of the salesperson– Biggest problem is falsification of call reports– Issue of quantity vs. quality of activity?

Motivation

INDIVIDUAL NEEDS

Maslow’s RelatedHierarchy Sales Forceof Needs Motivators

• Self-actualization Challenging tasks calling for creativity

• Esteem Recognition programs

• Belonging President’s Club $1 mil.

• Safety & security Job security & fringes

• Physiological Cash wages & bonuses

Figure 13-6: Use of the Various Types of Quotas

14%

14%

55%

28%

32%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Bar 2

Bar 1

Large firms’Sales > $40M

Small firms’Sales < $40M

Sales volumequota

Profit-basedquotas

Activityquota

Motivation

When are Quotas Effective?

Goal Theory• Postulates

° Difficult goals, if accepted, will lead to greater

performance than moderate or easy goals

° Difficult and specific goals, if accepted, will

lead to even higher performance than general,

“do your best” or no goals.

Motivation

Goal Theory

• Additional Factors

° Feedback is necessary for goals to be effective

° The goal must be personally embraced

° A person who is confident in his/her ability

will outperform someone who is not confident.

WHO AM I?

I lost my business. (1831)

Defeated for state legislature. (1832)

Failed again in business. (1833)

Suffered an emotional breakdown. (1836)

Lost election for: speaker (1838)

elector (1840)

congress (1843 and

1845)

vice-president (1856)

Was elected president in 1860.

MotivationSales force experiment --Adjusting Quotas

Percent of salespeople at or over 100% (T13-23) Month Adjusted Not Adjusted

January 44% 57%

February 28 45

March 46 57

April 55 56

May 54 57

June 52 60

July 53 60

MotivationSales Force Experiment -- Conclusions

• Most Universal salespeople are “quota achievers” not “dollar maximizers”.

• When given a more easily attainable quota, motivation declines so much they will be less likely to make lower than higher quota.

• Set quotas at challenging levels and attach great significance to attainment

• What salespeople say will likely differ from what they do.

Motivation

Incentive Programs• What is difference from regular compensation

such as commission?

• Key decisions– Goals -- Rules– Timing -- Awards– Participants -- Publicity– Theme -- Cost

• What is difference between Incentive and Recognition programs

Table 13-2: Types of Incentive Awards Used by 168 Firms

Percentage ofType of Award Firms Using

Cash 59Selected Merchandise 46Merchandise Catalog 25Travel 22

EXPERIENTIAL EXERCISE

Develop an incentive program for the following company. The report of the program should include a statement of the purpose of the program, its budget, and the specifics of the program such as theme, prizes, rules, timing and publicity.

ABCO Inc. is located in Dallas, Texas. Its sales last year were $25,750,000 with pre-tax profits of approximately $400,000. Growth has been steady over recent years, averaging about 10 percent a year. ABCO manufactures and markets vinyl binders, loose-leaf products, and index tabs. These products are used as manuals, price books, and advertisements by their clients. The bulk of ABCO’s sales are to industrial companies. Some of their major customers include EDS, 3M, Dr Pepper, and Xerox. Sales in the first half of the year are usually around 65% of total sales, while sales in the last quarter are usually about 15-20% of total annual sales. The margins (net sales minus cost of goods sold) on these products are approximately 40% on average. The margins are this high because the products are custom designed for the customer. Depending on the product line and customer situation, ABCO’s selling cycle will vary from two weeks to three months.

The sales force consists of six women and three men. They are all located in the Dallas/Fort Worth area with exception of one of the men, who is located in Oklahoma City. They range in age from 25 to 48 years old. Two of the men and one of the women have been with the company since its inception 15 years ago. All of the people are college graduates.

The compensation plan consists of a base salary plus commission on sales over 90% quota. All salespeople are expected to make quota. Their average income is $42,000, though this ranges from a high of $68,000 to a low of $21,000. Commissions are expected to be approximately 40% of their income.

ABCO has never had an incentive program in the past having relied on commissions as an incentive.

AN EXERCISE TO DETERMINE YOUR MOTIVATIONAL NEEDS

To perform the exercise, read through the following statements…check those which are most important in motivating you to do your best work.

Select the ten most important statements.

629 Job security

847 Being trusted to do my job the way I think it should be done.

333 Participating in work group conversations.

311 Having adequate shelter to protect from the elements.

836 Having a job which allows me time with my family.

151 Having an opportunity for personal growth.

937 Socializing with my friends.

743 Being considered for an advancement opportunity.

431 Working with other people.

819 Having children.

458 Doing something meaningful with my life.

757 Being in a position to contribute new ideas.

828 Having an associate that looks out for my interests.

735 Including other people in what I do.

949 Being selected for an exclusive award.

234 Being involved with work associates in social and recreational activities.

616 Being sexually satisfied.

146 Having a responsible person tell me when I’ve done a good job.

539 Having an active part in work related social activities.

341 Knowing that other people respect me and my work.

132 Acceptance as a work group member.

YOUR SCORE

To determine results: the statements are divided into

five categories intended to represent the five levels

in Maslow’s Hierarchy of Needs. The second digit

in each statement number indicates the category.

These categories are: 1-Physiological, 2-Safety-

Security, 3-Love-Belonging, 4-Self-Esteem, 5-Self-

Actualization.

MASLOW’S HIERARCHY OF NEEDS

Self-Actualization

Self-Esteem

Love-Belonging

Safety-Security

Physiological

Intense job challenge, full potential, full expres-sion, creative expansion.

Achievement, respect, recognition, responsi-bility, prestige, independence, attention, impor-tance, appreciation.

Belonging, acceptance, love, affection, familyand group acceptmance, friendships.

Security, stability, dependency, protection, needfor structure, order, law, tenure, pension, insur-ance.

Hunger, thirst, reproduction, shelter, clothing,air, rest.

MotivationMaslow’s Hierarchy -- Salespeople’s responses

Number Percent Number Percent

847 86% 431 51%

955 80% 654 40% 341 74% 722 39%

352 66% 836 37%

256 63% 458 37%

559 57% 853 37%

757 54% 718 34%

Comparison of Motivators and Hygiene FactorsPercentage Frequency

40 30 20 10 0 10 20 30 40

Low HighSatisfaction Satisfaction

Motivators

Achievement

Recognition

Work Itself

Responsibility

AdvancementHygienes

Policies

Tech. Supervision

Salary

Interpersonal Relations

Working Conditions

Figure 13-4: Career Stage Characteristics

Exploration Establishment Maintenance DisengagementCareer Concerns Finding an appro- Successfully estab- Holding on to what Completing one’s

priate occupa- lishing a career has been career. tional field. in a certain occu- achieved; reas-

pation. sessing career, with possible redirection.

Motivational Needs Learning the skills Using skills to pro- Developing Establishing a Job Related required to do duce results. broader view of stronger self-

to job well. Adjusting to work- work and organi- identity outsideBecoming a con- ing with greater zation. of work. tributing mem- autonomy. Maintaining a high Maintaining an

ber of an organi- performance acceptable per- zation. level. formance level.

Personal Establishing a Producing superior Maintaining moti- Acceptance of Challenges good initial pro- results on the vation, though career accom-

fessional self- job in order to possible rewards plishments. concept. be promoted. have changed.

Facing concerns about aging.

Psychological Support Achievement Reduced compe- Detachment from Needs Peer Acceptance Esteem tiveness the organization

Challenging posi- Autonomy Security and organi- tion Competition Helping younger zational ife.

colleagues

Career Stage Effects on Sales Per Salespersonin the Hospital Market

Sales(000)

Exploration Establishment Maintenance Disengagement

800

1,000

1,200

1,400

1,600

1,800