Agenda

• Lecture – Sales Force Motivating and Compensation

• Lecture – B2B sales vs. B2C Sales

But first….some terminology I want you to
know…..

• Knowledge-based Economy

• Life-long Learner

• Embrace Complexity / Solve Problems

Motivating & Compensating the Sales
Team

MK3454 – William Ryan

UCONN School of Business
 Sales Management & Leadership Overview

LEADERSHIP

Organizational Hiring & Category Customer

Design Training Management Management

Sales Team Management Customer Approach

(Internal) (External)

Coaching & Role of

Managing Motivation & Strategic Sales
Performance Compensation Selling Organization

LEADERSHIP
Bill Ryan - 2020
 Discussion:

What Motivates (Sales) People?

 Financial and Non-financial Rewards
What motivates you as a salesperson?

• Achieving a team goal and all of us going on a four-day cruise

• Receiving a gift from the company president at a company-wide meeting

• The owner’s verbal recognition

• A work environment that lets me work part of the day at home to balance my
family needs

• A trip to Hawaii for me & partner for reaching sales goal

• Or just lots of Money$$$$$

 Generational Motivational Issues
Generation X’ers (1965 – 1983)
 Raised by parents who both worked,
have shifted workplace emphasis from
materialism to focus on family
 Moving into managerial positions and
prefer independence over teamwork
and immediate communication over
structured meetings
 Computer use and multi-tasking is
second nature
 Value work opportunities that are
changing and allow for opportunity to
grow
 Flexibility in working arrangements is
critical as family time is more important
than time at work
 Bonus days off may be valued more
than the traditional monetary bonus
Copyright © Pearson Education, Inc. Publishing as Prentice Hall.
Millennials (1984 – 2002)
 Soon to be largest group in workforce
 Some have experienced tight job
markets and moved home
 Been counseled to find a good job that’s
right for them
 Require work-life balance
 High level of social consciousness and
responsibility and desire an employer
who incorporates and displays these
values in their work
 Being individuals in a team is valued
 Like immediate feedback and rewards
 Want meaningful work experiences and
mentors or coaches who can help them
achieve goals and contribute
 Flexibility in work environment is a
must
Key Methods to Motivate Salespeople
1
Hire self-motivated people
2
Show trust
3
Capitalize on unique strengths of employees
4
Encourage some people to become experts
5
Empower reps to make their own decisions
6
Offer rewards that are valued by all
7
Develop or remove deadbeats
 Discussion:
What Compensation Method would
you prefer?

Salary, Commission, Bonus?

 Compensation Plan Components

COMMISSION

BONUS
SALARY

Copyright © Sales Force Management Spiro, Rice, & Stanton

 Compensation Plans Should Address:

Correlate efforts Control Ensure proper Attract and keep

and results with salespeople’s treatment of competent
rewards activities customers salespeople

Motivate Be economical
Good sales compensation plan
salespeople yet competitive

Provide
choice Be flexible
Provide secure yet stable
Be fair Be simple and incentive
income

Copyright © Sales Force Management Spiro, Rice, & Stanton

Method Advantage Disadvantage Best Used
Straight Provides security and Direct incentive is easily lost if For products that require a lot of presale
salary stability for reps not administered properly and/or post-sale service
Better for directing and Represents a fixed cost For building long-term customer
controlling sales activities Requires supervision to direct, relationships
Ensures proper treatment control, and evaluate When supervision is available for new
of customers recruits
For new territories
For missionary sales

Straight Provides a strong Difficult to direct and When a strong incentive is needed to
commission incentive supervise salespeople attain sales
Salespeople have more Customers’ best interests For products that require little presale
freedom may be ignored and/or post-sale service
Acts as a screening Salespeople’s earnings may The sale is a one-time sale
method fluctuate widely Adequate field supervision is not
available
Company is in a weak financial position
Company uses part-time or independent
salespeople

Bonus Added incentive Added cost To encourage above-normal performance

Can be used for specific of specific activities
May be seen as inequitable if
activities - flexible not administered properly

Copyright © Sales Force Management Spiro, Rice, & Stanton

Components of a Sales Compensation Plan

Others

Profit sharing Others

Pension Entertainment

Profit Sharing Lodging

Moving Expenses Company Car

Bonus Insurance Lodging

Salary Commission Paid Vacation Travel

SECURITY INCENTIVES BENEFITS EXPENSES

Copyright © Sales Force Management Spiro, Rice, & Stanton

 Career Stages Effect Compensation Needs
• Exploration (0-2 Years)
o Primary concern is finding a suitable occupation
o Underdeveloped skills and knowledge
o High interest in personal growth

• Establishment (3-5 Years)

o Primary concern is improving skills and performance
o Lack of promotion may cause disengagement or quitting
o New commitments make pay important
o High interest in promotion and pay

• Maintenance (6-15 years)

o Primary concern is maintaining position, status, and performance
o Have highest sales volumes and percentage of quota and pay
o High valence for recognitions, respect, and pay, but low interest in promotion

• Disengagement (16-30 Years)

o Primary concern is preparing for retirement and/or developing outside interest
o Low interest in higher order and lower order rewards

Copyright © Sales Force Management Spiro, Rice, & Stanton

 Summary

• Motivating salespeople is more than just about money. It is a

major issue for most companies.

• Understanding that people are at different stages in their lives

and that there are “generational differences” really makes it
challenging to have a policy that works for everyone

• Compensation plans are critical to motivating but can easily

backfire and negatively effect top performers.