This guest post was written by Jonathan Palay, Co-founder of CommercialTribe
Why Seller Motivation Needs a Makeover
From the time we entered the cognitive revolution in 70,000 BC, the human species set off on a more prosperous course, largely driven by our ability to work together. So it should come as no surprise that sales can be considered one of the oldest professions in the world, because from the time we started to cooperate, we developed the need to persuade.
By some estimates today there are more than 10 million sales people in the world, also known as professional persuaders. Today, the sales organization exists to organize and drive those sellers toward the actions needed to transact revenue, leading to the creation of what has been described as a coin-operated, compliance-driven culture.
In this article, let’s explore why that is, why this model has stood the test of time, and why it may finally be ripe for a makeover.
The Hamster Wheel
Sales is the only business function built on a variable compensation model. Over a fixed time period, whether it be quarterly or even monthly, sales reps are given a quota. Hit your quota and make your on-target earnings for the designated time period.
If you push a little harder and exceed your quota, you can get into accelerators to make some real money. Miss your quota and well, there’s always next time. Everyone goes back to the beginning and starts at zero. Except…if you miss your quota enough times you can say buh-bye.
The quota system uses Core Drive 6: Scarcity and Impatience as sellers race to capture their earning opportunity for the time period before it evaporates. Specifically, what Yu-Kai calls Fixed Action Rewards are in play here, where the rep is motivated from the beginning by seeing much they will earn based on how much they sell.
Soldier Reporting For Duty
So if the comp plan is so overwhelming in driving motivation (which it is), how do we get sellers to do anything that’s not directly tied to selling a deal? The answer is…we make them! The sales organization is built like a classic hierarchy, just like the army. Reps report to a Frontline Manager, who report to a Regional Manager, who report to the Head of Sales. Just like any good hierarchy, orders get handed down and must be obeyed.
The best example might be the CRM (Customer Relationship Management) system. The CRM is the bane of most leaders existence as they try and figure out how to get their reps to keep it accurate and up to date as a way to see selling activity that ultimately is a prerequisite for sales. Sales don’t just magically happen after all!
Keeping the CRM up to date is a pain and reps oftentimes feel like they are doing it for management and not for themselves. Hence, without a strong mandate and reinforcement from the Frontline Manager it doesn’t get done.
The sales hierarchy is built to drive Core Drive 8: Loss and Avoidance. Participation at sales training, the use of new sales tools, and of course the pressure to hit quota are all driven with some element of compliance.
Overreliance on Black Hat Core Drives is Fatiguing
Core Drive 6, 7, and 8 are what Yu-Kai calls Black Hat, making us feel obsessed, anxious, and addicted. While they are very strong in motivating behavior, in the long run they often leave a bad taste in our mouths because we feel like we have lost control.
Sales reps are taught to push hard to win every last deal, especially when there is big-time compensation on the line. Yet, having to kick it into high gear quarter after quarter is fatiguing, as is the necessary obsession to hit quota. It is no wonder many salespeople ignore anything that they believe does not clearly tie back to hitting their quota.
Building a Sustainable Sales Organization
These Black Hat forces have been around for decades so they are fairly overwhelming and effective at driving the urgency the sales organization requires to hit its number. But especially with today’s millennial-minded sales rep who has unprecedented access to information and values purpose over compensation, these forces left unchecked threaten to churn reps out of your organization. Through Octalysis, we can see why a commission structure may ultimately hurt productivity and job satisfaction.
To counteract these forces sales leaders need a thoughtful plan to counteract. According to Yu-Kai, long-term engagement in the workplace includes providing a path to mastery and meaningful autonomy. These are known as White Hat drivers, making us feel powerful, fulfilled and satisfied. Let’s discuss how both can be sustainably implemented within the sales organization.
Make Selling a Game
Many wonder how someone can wake up every day knowing they are going to hear “no” 4 out of 5 times (and that is if they’re any good). Constant rejection is enough to put anyone in a bad mood. But successful sales reps take a different approach. There’s an old saying in sales “every no gets you closer to yes.”
Using Core Drive 3: Empowerment and Creativity, organizations can move from a selling culture to a learning culture. To do so, ask the question “why?” At it’s most basic, “why did we win and why did we lose” are questions that are asked from time to time, yet the answers aren’t celebrated. But the best sales reps know exactly why, and it is the celebration and publicizing of that knowledge that opens the black box and makes the process of figuring something new out fun. Who wants to work in an organization that thinks it knows everything? Ask what does your organization want to learn this quarter and put the onus on your sales reps to help you learn it. Or flip it around, what do your sales reps think YOU should learn?
Measure and track progress on these key learnings, ultimately using them the next quarter to optimize your go-to-market and empower the sales organization to more efficiently hit its’ number.
See the Forest from the Trees
The emphasis on quota attainment creates an extremely short-term orientation for everyone in the sales organization that emanates from the top. When the average tenure of the Chief Sales Officer is 24 months and is realistically one bad quarter away from being let go, investing in people can be a challenge.
Most organizations counteract this by creating “career paths”. The typical career path goes from entry-level business development (prospecting and appointment setting) to quota-carrying rep (closing deals) to Frontline Manager (managing a team of reps). Promotion is largely based on results in the previous role.
But instead of career paths, what sales organizations really need are “development paths”. While success in one role is a positive indicator, the competencies needed to succeed in the next role are different. There’s a modest leap from business development to quota carrying rep and a much bigger leap to frontline manager. There are more specialized roles being created every day that lie in between.
Using Core Drive 2: Development and Accomplishment, organizations can focus on making the skills needed to succeed in the current role AND the next role known, widely observable and even practicable. Sprinkling in enough regular development with the hard work of selling is key to showing sellers a motivating path forward.
Time for Your Makeover
The Black Hat drives that have made sales organizations successful for decades aren’t going away anytime soon. The status quo is hard to break. But the sales organizations that will differentiate themselves in the minds of today’s sales rep are the ones that create a balanced motivational environment by putting White Hat techniques on more equal footing with Black Hat tactics.
Think about what drives motivation in your sales organization. Is it time for a makeover? Do you want to explore these White Hat techniques and how to sustainably implement them? Please share what you see and what is or is not working for you or your company in the comments.
Jonathan Palay is Co-Founder at CommercialTribe, a SaaS platform to onboard, develop and coach sales professionals. Read more of Jonathan’s work here.
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3 thoughts on “Why Seller Motivation Needs a Makeover”
This is very intriguing but leaves some very interesting questions too. If we look at how quotas are quantified and presented in a sales environment, say a monthly sales board in a conspicuous place. The representation of our efforts is wiped at the start of every new month.
My idea is to incorporate total sales with the organization, which will drive the veteran salesperson who may be having a bad month and the newer rep to attain to a higher level. Plus I believe it will have an impact on turnover.
Yes, I too believe that we need to incorporate better triggers and more white hat techniques into our black hate tactics to provide a more overall productive environment.
I would absolutely love to discuss this further.
The motivation is changing globally from sales rep to manager to Excecutive .
It is our job as leader to know what motivates the team , our channel partners and customers in the buying process.
It is not always about the money!