ssm lecture-14 (motivation of the sales force)

07/06/10 1

By :

Prof. Amit Kumar

07/06/10 2

“A student pursuing management education from IILM- Graduate School of Management, for example may find himself or herself placed in a firm as a Sales Manager. Our goal is to prepare the student for the exciting challenges related to leading sales organizations in today’s hyper-competitive global economy”.

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Importance of this course

Selling & Sales Management

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Selling & Sales Management

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Contents

• What Motivates Salespeople?• Process of Motivation• Motivational Drives• Theories of Motivation• The Dos and Don’ts of Motivating • Financial & Non-financial Rewards• Designing a Motivational Program

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Selling & Sales Management Motivation of Sales Force

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What Motivates Salespeople?

• In an effort to understand what motivates the students to attend a class session. Your instructor may ask, ‘Why are you attending class today?’ Possible responses from the students might include:– I want to learn how to become a sales manager.– I am concerned that if I’m not here I’ll lose points.– I needed a class to graduate, and this time fit my

schedule.– I have a special friend who is also taking the class, and I

like to be with that person.– I heard the instructor was fun.

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What Motivates Salespeople?• What if you were pose the same sort of question to sales

representatives: ‘Why do they go to work selling every day?’ The possible responses you might hear include the following:– I like to sell, and I enjoy my job.– It pays the bills.– Without this job, my family would not have insurance, and we

need it.– I am in a sales contest, and I want to win the prize in front of

my peers.– My customers are counting on me to help them solve some

of their problems at work.

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Motive

Behaviour

Goal

TensionReduction

Process of MotivationProcess of Motivation

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Motivational Drives

• Principles• Security• Achievement• Approval• Loyalty• Advancement• Leadership• Human behaviour

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Theories of Motivation

• ContentContent• ProcessProcess• ReinforcementReinforcement

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Content Theories

• Need hierarchy theory

• Hertzberg’s two factor theory

• Alderfer’s ERG theory

• McGregor Theory X and Y

• Z theory of William Ouchy

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Physiological need

Security need

Social need

Esteem need

Self actualization need

Maslow’s Hierarchy of Needs

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Sales managers can apply this concept by using reinforcementsthat meet needs at each level.• Physiological- salary and bonuses.• Security- Insurance (health, life, disability) and retirement

plans.• Social or belongingness- program that balance work with life

and family commitment ( e.g. flexible hours, job sharing, on-site daily care, paid parental leave)

• Esteem- program that recognize individuals for their sales efforts and accomplishments.

• Self-Actualization- satisfaction with balance between accomplishments at work and balance with home life.

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Maslow’s Hierarchy of Needs

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Hertzberg's Two-Factor Theory

• Motivating factors- were found to be intrinsic to the job and included: achievement, recognition for achievement, the work itself, responsibility, advancement or growth.

• Hygiene factors- were found to be extrinsic to the job and included company policies and administration, supervision, relationship with supervisor, work conditions, salary, status and security.

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Process Theories

• Equity theories

• Expectancy theories

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Reinforcement Theories

• Hull’s drive theory

• Skinner’s reinforcement theory

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Adam’s Equity TheoryTheory propose that a sales rep weights their perceived inputsand outcomes in comparison to others and decides if theireffort/reward ratio is equitable or fair, and then realigns theirefforts to be rewarding.

– Inputs- their perception of their training, experience, effort, and anything they believe they contribute to the organization.

– Outputs- their perception of their compensation, benefits, status, job security, satisfaction, and anything else they receive.

– Balancing- a sales representative would compare their input/output ratio & compare it with different salesperson.

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The resulting ratio could result in three possibilities:

1. Equity: input/output ratio is equal to others’ input/output ratio. Reps are motivated to keep doing what they do.

2. Overpayment inequity: input/output ratio is greater than others . Sometimes reps will increase their efforts.

3. Underpayment inequity: input/output ratio is less than others. Reps either decrease their efforts, ask for more or leave to find more equitable job.

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Adam’s Equity Theory

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The Dos and Don’ts of Motivating Your Sales Representatives

The are the suggestions sales managers can use to motivatetheir sales force.• Hire self-motivated people: The old adage ‘Surround yourself

with good people and you will never have any problems too big to achieve’ would seem to fit.

• Show Trust• Capitalize on unique strengths of each member of sales force• Encourage some people to become experts• Empower salespeople to make their own decisions• Ensure that you offer rewards that are valued by all

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Financial & Non-financial Rewards

Imagine that you just won a contest your instructor held as part of your sales management class or in the personal selling class. How would you like to be

rewarded for your efforts?

Would you like your reward to be an award, extra points to improve your grade, a meal at a nice restaurant,

public recognition, a day off from class, an opportunity to attend a training seminar at IIM or a weekend trip.

• There are many ways to reward performance. Sales and Marketing Magazine has run a monthly column discussing what motivates salespeople. Finding are as:

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Financial & 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 verbal recognition.• A work environment that lets me work part of the day at homes to

balance my family needs.• A trip to Hawaii for reaching a sales goal.• Sending me to a seminar that helps me become more productive.• Quarterly bonuses. The extra money helps with the bills.• Being selected for the president’s club.

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Designing a Motivational Programme

• Programme objective

• Motivational tools

• Individual methods

• Group methods

• Communication

• Feedback

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ssm lecture-14 (motivation of the sales force)

Leadership & Management