Page 63 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Unit 3: Motivating and Compensating the Sales Force

Notes
Second, when a large percentage of a workforce is nearing retirement or being lured to
different jobs, companies want to motivate those who remain to perform at the highest
productivity levels possible. In both cases, it's a big challenge.
Based on Accenture research and on our client experience around the globe, we believe
that when it comes to successful motivational approaches and incentive compensation
strategies, sales executives must "go back to go forward."
That is, they must rediscover some of the basic and deeper truths about what factors –
besides financial compensation –motivate their sales professionals, and then use those
insights to design a more comprehensive approach to incentive management.
Creating a culture of trust; leveraging the power of peer recognition; and focusing on the
enablers and tools that help salespeople reach their potential in an increasingly complex
business environment – these are all critical parts of the overall picture of motivating a
sales force more effectively. By gaining a deeper knowledge of human motivation, sales
executives can put in place a more holistic approach – one that integrates people, process,
technology and compensation strategies – to encourage and reward the behaviors that
help produce high performance.
What's more, gaining insights into what really makes a sales force tick has benefits that go
well beyond the sales organization, since many of the lessons also apply to workforces in
general. Not all workers, of course, have motivations and incentives as tied to the very
definition of their jobs as salespeople do. But today, those managing all types of workforces
are beginning to understand what chief sales officers have known for years: When it
comes to motivating people toward great performance, it's not just about the paycheck.

In other words, something more is going on. The question is, what?
More work, less to show for it If your sales professionals feel as if they're working harder
today but have less to show for it, they may be right.

The most recent results from an annual sales performance optimization survey conducted
by CSO Insights point to some troubling trends. For example, after two consecutive years
of improvement, the percentage of salespeople making their quotas declined in this year's
survey to just 57 percent.

The reasons for this decline become clearer upon closer analysis of the findings. For
example, the average selling cycle is getting longer. Last year, nearly 14 percent of the
firms surveyed reported an average sell cycle of one month or less; this year, that number
dropped to just over 7 percent. The number of calls necessary to close a deal has also
jumped: About 46 percent of firms said that a typical sales cycle requires six or more calls,
up from 35 percent four years ago. And conversion rates-moving from the initial call to
the presentation stage, and then converting proposals to sales-are trending down again.

What do these long sell cycles and declining conversion rates mean? First, they underscore
the challenges and complexities of today's sales environment. As David Joyner, executive
vice president of sales and account management for pharmaceutical services company
Caremark, puts it: "The demands from customers and the pressure from competitors
continue to rise, and that results in a marketplace that has higher expectations and more
demands. To effectively sell solutions, and not just boxes, a salesperson needs to have
more knowledge across a broader spectrum of products and services." That leads to what
Joyner describes as "a situation where you have to know more and sell harder, but where
you may be less effective in your overall success rates."

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