Professor Chip Besio Sales Management Marketing 3345

1. MOTIVATION Professor Chip Besio Sales Management Marketing 3345

2. What is Motivation?? • Driveto initiate an action. • The intensity of effortin an action • Thepersistence of effortover time.

3. Why the concern for sales force motivation? What are the different theories of motivation? Motivation Tools Self- Quotas Incentive Recognition management programs programs

4. Why is Motivation Important? • Frequent rejection • Physical separation from company support • Direct influence on quality of sales presentation • Indirect influence on performance

5. Steps to Greater Personal 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.

6. Sales Force 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 and newsletters. Assign each salesperson a core of Routine loyal customers that are called on regularly.

7. Sales Force Needs and Ways to Fill Them Sales Force Needs Company Actions to Fill Needs AccomplishmentSet 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.

8. MASLOW’S HIERARCHY OF NEEDS Intense job challenge, full potential, full expression, creative expansion. Achievement, respect, recognition, responsi- bility, prestige, independence, attention, importance, appreciation. Belonging, acceptance, love, affection, family and group acceptance, friendships. Security, stability, dependency, protection, need for structure, order, law, tenure, pension, insurance. Hunger, thirst, reproduction, shelter, clothing, air, rest. Self-Actualization Self-Esteem Love-Belonging Safety-Security Physiological Motivation and Personality, Abraham Maslow, 1970

9. 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.

10. AN EXERCISE TO DETERMINE YOUR MOTIVATIONAL NEEDS Select the ten most important statements. (Cont’d.) 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

11. Determining 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

12. 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.

13. Maslow’s Hierarchy – U.S. Salespeople’s Responses Number Percent 847 86% 341 74% 757 54% 431 51% 828 37% 458 37% 743 34%

14. INDIVIDUAL NEEDS Maslow’s Related Hierarchy Sales Force of Needs Motivators Self- Challenging tasks actualization calling for creativity Esteem Recognition programs Belonging President’s Club $1 mil. Safety & security Job security & fringes Physiological Cash wages & bonuses

15. Chinese Culture Hierarchy of Needs Self-actualization in service to society Safety Physiological Affiliation (belonging)

16. What Makes Great Salespeople? The Competitor This person not only wants to win, but derives satisfaction from beating specific rivals -- another company or even colleagues. They tend to verbalize what they are going to do, and then do it. The Ego-driven They are not interested in beating specific opponents, they just want to win. They like to be considered experts, but are prone to feeling slighted, change jobs frequently, and often take things too personally.

17. What Makes Great Salespeople? The Achiever This type of person is almost completely self-motivated. They usually set high goals and as soon as they hit one goal, 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 other people.

18. Role Perceptions • Sales is a boundary spanning position – you must be responsive to expectations of multiple people. Sales Manager Customers Family Company 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?

19. Role Perceptions • Typical Sales Job Activities • Where is their potential for the following: • Ambiguity • Lack of Accuracy • Conflict

20. 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 problems orders PRODUCT SERVICING Learn about Train customers product Test equipment Supervise repairs Supervise Perform maintenance installation MANAGING INFORMATION Receive feedback Provide technical Provide feedback information Source: Adapted from William C. Moncrief, “Selling Activity and Sales Position Taxonomies for Industrial Sales Force,” Journal of Marketing Research, August, 1996), pp. 266-67.

21. Typical Sales Job Activities Job Dimension Activities SERVICING THE ACCOUNT Stock shelves Count inventory Set up displays Promote local advertising ATTENDING CONFERENCES Sales Product exhibitions conferences Training sessions Client conferences 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 Credit processing relationships Source: Adapted from William C. Moncrief, “Selling Activity and Sales Position Taxonomies for Industrial Sales Force,” Journal of Marketing Research, August, 1996), pp. 266-67.

22. Motivation Career Stages • 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?

23. Career Stages Career Stage Characteristics ExplorationEstablishmentMaintenanceDisengagement Career ConcernsFinding an Successfully Holding on to Completing appropriate establishing whathas been one’s occupational a careerin aachieved; career. field.certain reassessing career, occupation.with possible redirection. Motivational Learning the Using skills to DevelopingEstablishing aJob Related skills required produce results.broader view ofstronger self- to do Adjusting to work and identity the job well.working with organization. outsideBecoming a greater Maintaining a highof work. contributingautonomy.performanceMaintaining an memberof level.acceptable anorganization.performance level.

24. Career Stages Career Stage Characteristics ExplorationEstablishmentMaintenanceDisengagement Personal Establishing aProducing superiorMaintaining Acceptance of Challengesgood initial results on themotivation, career professional job in order tothoughaccom- self-concept.be promoted.possible rewardsplishments. have changed. Facing concerns about aging. PsychologicalSupport AchievementReduced Detachment Needs Peer AcceptanceEsteemcompetitiveness from the Challenging Autonomy Security organizationpositionCompetitionHelping youngerand organi- colleagueszational ife.

25. Career Stage Research Findings Job Satisfaction and Career Concerns 200 Salespeople -- Large Industrial Organization: • all are least satisfied with promotion & pay • pay satisfaction is only dimension on which exploration sales people are more satisfied than establishment or maintenance salespeople • maintenance salespeople are less satisfied with supervision than are establishment salespeople

26. Career Stage Research Findings Career Concerns and Age 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?

27. Relationship Between Career Concerns and Age Age Range Proportion of Career Concerns Sales Force Exploration 14% Establishment 29% Maintenance 42% Disengagement 15% 20 30 40 50 60 65

28. Use of the Various Types of Quotas Sales volume quota Profit-based quotas Activity quota Large firms’ Sales >$40M Small firms’ Sales < $40M S&MM Compensation Survey 2008

29. Quotas & Reasons for Use 1. Help motivate salespeople 2. Direct where to put effort 3. Provide standards for evaluation. a. 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.

30. Quotas & Reasons for Use 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?

31. 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

32. Types of Incentive Awards Used by 168 Firms Percentage of Type of Award Firms Using Cash 59 Selected Merchandise 46 Merchandise Catalog 25 Travel 22

33. Giving 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.