Best Practice Makes Perfect

By Malcolm Fleschner

Savvy sales managers understand from personal experience how a well-run incentive program can deliver extraordinary results. Now the American Productivity & Quality Center (APQC), a Texas-based nonprofit organization studying process and performance improvement, offers up even more proof with the release of its best practice report, “Maximizing Sales Force Effectiveness.”

One author of the study, APQC market developer Kathleen Huneycutt, says that sales organizations that rely exclusively on commissions to motivate salespeople can expect only a baseline of bottom-line results.

“Commissions just won’t motivate your people,” she explains. “Paying commissions will get them to do their job. In order to get people to overachieve, you need to offer a combination of incentives. People live up to the boss’s expectations. The best-practice companies are getting stellar results because they offer above and beyond the paycheck.”

Perhaps running contrary to some managerial wisdom, the APQC study says that nearly everyone on a sales team is capable of being motivated through incentives. For that reason, the most successful sales managers direct incentives at about 80% of the sales force, not just the top 1% or 2%.

Rather than simply creating motivational programs with no input from the programs’ targets, top organizations actively solicit input about incentives from their sales teams. And since motivational factors are always subject to change, the best managers keep the lines of communication open, says APQC best practice information manager Steve Wright.

“It really depends on the salesperson,” he says. “One might be motivated by recognition and another by paid vacations. The sales manager’s responsibility is to determine how to effectively motivate each one. Knowing the sales force is central to knowing what will motivate them.”

As a result, the report does not endorse any one kind of reward. Some of the options mentioned include cash, vacations, gift certificates, stock certificates, restaurant coupons, ceremonies, trophies and plaques. And while there’s no guarantee that any incentive will do a 100% motivational job across an entire sales force, APQC’s research indicates that programs using these alternatives have the best chance of delivering enhanced sales productivity, higher sales volume and better closing ratios.