Following last week’s article about onboarding and keeping good staff, the topic has stayed front of mind due to two conversations I’ve had since.
The first was with a great candidate. He’s currently a very senior sales leader with one of Australia’s best-known organisations, but after many years with them, has decided to leave. When asked why, he explained that incentives, bonuses and commissions, have now been scrapped for all, with the exception the CEO, whose bonus remains. Nice one. He told me staff morale is rock bottom.
My other conversation was with the founder of a still young business that has grown exceptionally well, and now, for the first time, needs to hire a new business sales person to start taking them to the next level.
The challenge they have is a cultural one. You see, their client relationship managers do not receive bonuses, but they’ll need an incentive scheme now, if they’re going to attract a new business development manager. They get that they’re going to have to break the mould, and that it may cause some rumblings, so we’ll be working on the best way for them to sell it in. Because without it, they won’t attract the calibre of person they need.
So, two examples of how staff incentives can be a minefield, one a clear example of how to demoralise your team in one fell swoop, the second an illustration of why you must be prepared for pushback and resentment if new incentives are not properly explained and introduced.
Always be wary when salespeople tell you that “money isn’t that important to me”. Translated it means “I’d rather not prospect and look for new clients, instead I’ll happily morph into an account manager”.
Whilst our research shows most of us are intrinsically motivated, the want for reward and to earn more money must remain a key driver for salespeople whose job it is to search out and win new business. There must be a financial incentive for them to justify the disappointments and rejection they face daily, otherwise what’s the point?
My recommendation is to offer a realistic, achievable incentive scheme. Leave it uncapped, after all, the more your salespeople earn the better the business is doing, so why put a ceiling on it. Usually managers can be rewarded with an annual bonus, based on what their team achieves. For salespeople, I like commissions to be paid quarterly. This protects the business from a one-month wonder, and is a short enough period to keep the sales person motivated.
I am committed to writing regular “Food for Thought” articles, so I may share with you my ideas on how you can build a strong sales organisation and grow revenue. If you have any challenges or successes you would like to share with me, I would love to hear from you.
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