Motivation

1. Motivation What is Motivation?? • Drive to initiate an action. • The intensity of effort in an action • The persistence of effort over time.

2. Motivation Reasons for Motivating Salespeople • Frequent rejection • Physical separation from company support • Direct influence on quality of sales presentation • Indirect influence on performance

3. Motivation 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

4. Motivation Maslow’s Hierarchy of Needs • Self-actualization Intense job challenge, creative expansion • Esteem Achievement, respect, recognition • Belonging Acceptance, affection, family • Safety & security Stability, dependency, protection, structure, pension, law & order • Physiological Hunger, thirst, shelter, clothing

5. Motivation Maslow’s Hierarchy -- Salespeople’s responses Number Percent Number Percent 847 86% 431 51% 955 80% 654 40% 341 74% 722 39% 352 66% 836 37% 256 63% 458 37% 559 57% 853 37% 757 54% 718 34%

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

7. Motivation Herzberg’s Hygiene-Motivation Theory • Based on in-depth analysis of engineers (Transparency 13-7) • Do these results generalize to salespeople?

8. Motivation Career Stages (13-8) • 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?

9. Motivation Career Stage Research Findings • Hospital Market (13-9): 1984 Study of 250 distributor salespeople with 28 wholesalers of disposable medical supplies. Commission compensation plan.

10. Motivation Career Stage Research Findings • Job Satisfaction and Career Concerns (13-10) 220 Salespeople -- Large Industrial Organization: • all are least satisfied with promotion & pay • pay satisfaction is only dimension on which sales people are more satisfied than establishment or maintenance salespeople • maintenance salespeople are less satisfied with supervision than are establishment salespeople

11. Motivation Career Stage Research Findings Career Concerns and Age (13-11) 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?

12. Motivation 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.

13. Motivation A Model: Expectancy Theory System Effort Performance Reward Expectancy Instrumentality Valence Likelihood Likelihood Importance increased greater of receiving effort performance more of will lead to will lead to certain greater more rewards performance rewards

14. Motivation Expectancy Theory • A more complete theory • Focuses on process of motivation • Maslow & Herzberg focus on only one aspect of the process: reward importance • Systematic approach with multiple reasons for a lack of greater effort • Indicates where management should direct its attention to sales force as a whole or to an individual • What may account for a lack of greater effort in an individual salesperson?

15. 13-14 Motivation 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?

16. Motivation Role Perceptions • Typical Sales Job Activities (13-15) • Where is their potential for the following: • Ambiguity • Lack of Accuracy • Conflict

17. Motivation Behavioral Self-Management (BSM) (T13-16) • How do these BSM techniques relate to the motivation theories -- Maslow, Expectancy, etc.? • How will career stages affect this process? • Devise a BSM for taking more complete class notes. • Devise a BSM for making more sales presentations for a key product group- e.g., PCs • What is the role of management in BSM??

18. Motivation A Self-Contract (13-17) • Clear detailed description of behavior targeted for change. • How behavior is to be observed, measured & recorded • Detail of criterion for reinforcement • Designates the reinforcement • Stipulates the negative consequences of not fulfilling contract • Sets timing for delivering reinforcement

19. Motivation Role Play 13-1 1. What should be taken into account by top management when setting sales goals for next year? 2. Under what circumstances might a 20% sales quota increase be justified? 3. What is the role of first-line, field sales managers in setting quotas?

20. Motivation Role Play 13-1 4. How should a district manager allocate the district’s quota to individual salespeople; that is, what factors should be taken into consideration? 5. How should the two salespeople’s requests be handled? 6. What problems may exist with this company’s process of setting quotas?

21. Motivation Expectancy Theory • A more complete theory • Focuses on process of motivation • Maslow & Herzberg focus on only one aspect of the process: reward importance • Systematic approach with multiple reasons for a lack of greater effort • Indicates where management should direct its attention to sales force as a whole or to an individual • What may account for a lack of greater effort in an individual salesperson?

22. Motivation 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

23. Figure 13-1:Sales Forced 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. Routine Assign each salesperson a core of loyal customers that are called on regularly. Accomplishment Set 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.

24. Theory Author Description Hierarchy of needs Abraham Maslow Physiological, safety, belonging, esteem, and self-actualization needs are ranked in a hierarchy from lowest to highest. An individual moves up the hierarchy as a need is substantially realized. ERG theory Clayton P. Alderfer Hierarchically classifies needs as existence, relatedness, and growth needs. Like Maslow, suggests that people will focus on higher needs as lower needs are satisfied but, unlike Maslow, suggests that people will focus on lower needs if their higher needs are not satisfied. Motivation-hygiene Frederick Herzberg Argues that intrinsic job factors (e.g., challenging work, achievement) motivate, whereas extrinsic factors (e.g., pay) only placate employees. Theory of learned David McClelland Proposes that there are three major needs professional needs: achievement, afflil- iation, and power. A high need for achievement and affiliation has been related to higher sales force performance. A high need for power has been related to higher sales manager performance. Equity theory J. Stacy Adams Proposes that people will evaluate their treatment in comparison to that of “relevant others” and that motivation will suffer if treatment is perceived to be inequitable. Figure 13-2:Summary of Classic Motivation Theories

25. 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. 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.

26. Motivation Herzberg’s Hygiene-Motivation Theory • Based on in-depth analysis of engineers (Transparency 13-7) • Do these results generalize to salespeople?

27. Motivation In-Class Exercise 13-1 1. What should be taken into account by top management when setting sales goals for next year? 2. Under what circumstances might a 20% sales quota increase be justified? 3. What is the role of first-line, field sales managers in setting quotas?

28. Motivation In-Class Exercise 13-1 4. How should a district manager allocate the district’s quota to individual salespeople; that is, what factors should be taken into consideration? 5. How should the two salespeople’s requests be handled? 6. What problems may exist with this company’s process of setting quotas?

29. Chapter 13 Why the concern for sales force motivation? What are the different theories of motivation? Motivation Tools Self- Quotas Incentive Recognition management programs programs

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

31. Motivation Quotas - Standards for evaluation 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?

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

33. + Average - + Average - + Average - + Average - + Average - Figure 4Job Satisfaction and Career Concerns Supervision Pay Promotion Job Co-Worker

34. Figure 2Relationship 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

35. GIVING STATUS TO SALESPEOPLE 1. Compensation 2. Job Title 3. Company Car Upgrade 4. Car Phone 5. Field Sales Council 6. Outside Secretarial Support 7. Published Success Stories 8. Task Force Assignments

36. Figure 13-5: Model of Motivation Valence Importance of receiving more of certain rewards Effort Performance Rewards Expectancy Likelihood that increased effort will lead to greater performance Instrumentality Likelihood that greater performance will lead to more rewards

37. 13-14 Motivation 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?

38. 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 orders problems PRODUCT SERVICING Learn about product Train customers Test equipment Supervise repairs Supervise installation Perform maintenance MANAGING INFORMATION Receive feedback Provide technical Provide feedback information SERVICING THE ACCOUNT Stock shelves Count inventory Set up displays Promote local advertising ATTENDING CONFERENCES Sales conferences Product exhibitions Client conferences Training sessions 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 relationships Credit Source: Adapted from William C. Moncrief, “Selling Activity and Sales Position Taxonomies for Industrial Sales Force,” Journal of Marketing Research, August, 1986), pp. 266-67.

39. Technique Method Tools Self-monitoring Observe and record behavior. Can use diaries, counters, tally sheets, charts. Goal setting Establish behavior change Should be specific and with a objectives. short time horizon. Stimulus Modify antecedents to behavior. May involve introducing or control removing cues. Consequence Modify antecedents to behavior. May involve reinforcement, pun- management ishment, or extinction. Rehearsal Systematic practice of desired May be overt or visualized. behavior. Self-contracting Specify the relationship between May involve public commitment. behaviors and their conse- quences. Figure 13-6: Self-Management Techniques

40. Example of a Self-Contract Date Goal: Increase the number of accounts by 10% in the coming year Agreement Self: I agree to call on at least three prospective customers each week throughout the year. In my call report I will note each new contract made. At the end of the week this information will be transferred to a chart posted on my office door. Consequences If the contract is kept: After calling on a new customer I will reward myself with a steak dinner and bottle of fine wine. Each week I call on three or more new customers I will reward myself by playing a round of golf on Saturday morning. For every new account I secure I will reward myself by playing an extra round of golf on Sunday. If the contract is broken: If I fail to contact at least three new customers during the week, I will spend Saturday morning in the office prospecting for new customers. Bonus clause: If I exceed the goal of increasing the number of accounts by 10% before the year is out, I will reward myself with a weekend trip to Las Vegas. Signed Witness Review Date

41. Steps to Greater 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.

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

43. Motivation Quotas - Standards for evaluation 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?

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

45. Figure 13-6: Use of the Various Types of Quotas Sales volume quota Profit-based quotas Activity quota Large firms’ Sales > $40M Small firms’ Sales < $40M

46. Motivation When are Quotas Effective? Goal Theory • Postulates • Difficult goals, if accepted, will lead to greater performance than moderate or easy goals • Difficult and specific goals, if accepted, will lead to even higher performance than general, “do your best” or no goals.

47. Motivation Goal Theory • Additional Factors • Feedback is necessary for goals to be effective • The goal must be personally embraced • A person who is confident in his/her ability will outperform someone who is not confident.

48. WHO AM I? I lost my business. (1831) Defeated for state legislature. (1832) Failed again in business. (1833) Suffered an emotional breakdown. (1836) Lost election for: speaker (1838) elector (1840) congress (1843 and 1845) vice-president (1856) Was elected president in 1860.

49. Motivation Sales force experiment --Adjusting Quotas Percent of salespeople at or over 100% (T13-23) Month Adjusted Not Adjusted January 44% 57% February 28 45 March 46 57 April 55 56 May 54 57 June 52 60 July 53 60

50. Motivation Sales Force Experiment -- Conclusions • Most Universal salespeople are “quota achievers” not “dollar maximizers”. • When given a more easily attainable quota, motivation declines so much they will be less likely to make lower than higher quota. • Set quotas at challenging levels and attach great significance to attainment • What salespeople say will likely differ from what they do.