Sales Management Digest

Is Cash the Best Motivator for Salespeople?
Malcolm Fleschner
Which is more effective as a motivator for reps, cash or merchandise rewards?

According to a poll conducted by Maritz Research, fully 82 percent of the 1,200 employees surveyed said they prefer to be rewarded with cash. But what people say they would like to receive and what they will work hardest to get may be distinctly different. Consider these reasons for using merchandise to motivate reps, instead of dollars:

An object of value can potentially create a strong positive association between your company and your rep. That can be a valuable connection. Cash often fails to capture people's imagination, but a merchandise reward is a constant reminder of the recipient's achievement and the company that delivered it.

Merchandise is tangible, whereas cash can simply become absorbed among dozens of other expenses. When you attach good performance to a tangible object, sometimes reps will be more focused, because they're keeping a vision of that object in mind as they work to cross the finish line.



Some research indicates that merchandise simply delivers more impact than bucks. The perceived value of a noncash award can be as much as 40 percent higher than its actual cash value. Not bad if you're looking to get maximum ROI for an awards initiative.

Reps may welcome the cash infusion – but only at first. In the end, cash has a face value that cannot be hidden. When they reflect on all the extra hours they put in to earn that dollar amount, they might have second thoughts. Rewarding with dollars and cents can send a message that is cold and impersonal.

Cash is just a number. One of the reasons you give out big-ticket merchandise is to generate some workplace chatter and excitement after the fact. Cash doesn't have the same effect. While it's often perfectly acceptable to talk about a luxury item earned, people might consider it unseemly or crass to discuss cash earnings.
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