Motivating Sales Representatives

The majority of sales representatives require encouragement and special incentives, especially those in the field who encounter daily challenges.²⁵ Most marketers believe that the higher the salesperson’s motivation, the greater the effort and the resulting performance, rewards, and satisfaction—all of which in turn further increase motivation. One research study found the employee reward with the highest value was pay, followed by promotion, personal growth, and sense of accomplishment.²⁶ Least valued were liking and respect, security, and recognition. In other words, salespeople are highly motivated by pay and the chance to get ahead and satisfy their intrinsic needs, and they may be less motivated by compliments and security.

Many companies set annual sales quotas, based on the annual marketing plan, for dollar sales, unit volume, margin, selling effort or activity, or product type. Compensation is often tied to quota fulfillment, yet setting sales quotas can create problems. If the company underestimates and the sales reps easily achieve their quotas, it has overpaid them. If it overestimates sales potential, the salespeople will find it very hard to reach their quotas and be frustrated or quit. Another downside is that quotas can drive reps to get as much business as possible—often ignoring the service side of the business. The company gains short-term results at the cost of longterm customer satisfaction. For these reasons, some companies are dropping quotas.