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July 2003: Volume 45, Number 7

Motivating Salespeople in a Sluggish Economy
by David H. Martin

Dealer Insights
What dealers have to say regarding sales incentives:

• Chris Layton, general manager of Culligan of Orange County and former WQA president:
“We generate short-term, incentive-based contests to stimulate sales when business slows. Prizes are relatively inexpensive and include things like ‘dinners out’ and trips to nearby Catalina. Then, too, we ask the salespeople to refocus on daily production rather than long-term goals.”

• Randy Orella, owner of Blue Fountain Water, a Sacramento, Calif., Kinetico dealer:
“We’re a small dealer and only have one person to motivate, other than myself. But, as a former sales manager of a Kinetico region, I always liked to stress the importance of ‘doing your personal best’ and taking pride in being a water treatment professional. When times are slow, it’s important to remind salespeople that they can’t just wait for the phones to ring. They need to take responsibility for developing their own leads, whether it’s calling past customers for referrals, calling on builders or even knocking on doors.”

So things are a little slow and you sense your salespeople’s attitudes need some positive reinforcement. Sure, marketing dollars are scarce but a company’s marketing responsibilities still include motivating salespeople so don’t try to sidestep the issue. Be positive. Be thoughtful. Then act!

Listen to the experts
What follows is a compilation of thoughts from motivational experts on fighting the sales slowdown blues without wasting marketing dollars.

• Steve Waterhouse, president of Waterhouse Group, Scarborough, Maine:
Stay positive—If your salespeople smell fear, they’ll start to worry.
Have a plan—When the economy takes a dive, sales are tougher to find and your sales team will need new ideas. Plan promotions and specials to get things moving. Investigate new markets or launch new products. Active people are positive people.
Get out in the field—Schedule ridealongs with salespeople to visit key customers. Use this time to hear their problems and ideas. In tough times, we all need to be heard.
Rev 'em up!—In a soft market, salespeople are getting beaten up every day. It’s your job to inject a positive attitude into their lives. Leave them encouraging voice mails or pager text messages.
Be a cheerleader—Make a big deal out of every sale. Celebrate successes to motivate your team to keep on winning.
Set realistic goals—Reset your goals to reflect the tougher market. Consistently missed goals lower morale.

• Daryl Gibson, of www.salestar.com:
Build up their mood—Give them something positive to think about. Sometimes that involves projects, assignments, or tasks that can be assigned.
Try a diversion—When the going gets tough, the tough go to lunch. A diversion can be a useful method to distract the “downer” from his/her problems. It doesn’t have to be lunch, of course; some non-work-related diversion can make a huge difference in mood.
Keep on track—It’s easier for anyone to be diverted into a bad attitude when they forget where they’re going. If they’ve got a destination in mind, it’s a lot harder for people to entice them off your path. Restate your goals for them clearly.

• Michelle Marchetti, a New York freelance writer for Incentive Magazine:
Run short-term contests—People get discouraged by long-term competitions when times are tough. Offer monthly bonuses to the person who rents the most units. At the same time, offer monthly bonuses to sales leaders. You can reduce the rewards in short-term contests. Also, increase the excitement and motivation to win because there are more winners.
Stretch your budget with “thanks”—In addition to money for sales incentive programs, you need to show appreciation for their efforts in other ways. Learn to express a sincere “thanks” to salespeople at every opportunity, and consider sending a small gift to the top salesperson every month.
Share ideas regularly—Regular idea-sharing sessions with sales and even service people have the effect of a “support group” in tough times. The simple act of swapping can have a powerful team-building effect.
Give them flextime—When leads are scarce, offer a little “personal time off.” After all, time is the one thing you can always afford to give. It’s a positive morale builder and the gesture will not be forgotten.
Offer extra training—One sure way to encourage loyalty to your company and to the industry is to offer additional professional training and, if possible, training with WQA certification. While you can’t always change what your salespeople make, you can increase how much they’re worth. What’s more, it will identify employees who are committed for the long term when times improve.
Be a servant—Personally check in on your salespeople every two days or so. Listen to their problems and customer problems. Then cut through red tape if necessary to address problems promptly. Serve your salespeople and they’ll work harder for you. Be your company’s “Chief Executive Servant.”

Gift cards instead of cash
According to New York-based consulting firm Bain & Company, estimated gift card sales exceeded $38 billion in 2002. Other research supports the widespread appeal of stored-value cards as a sales incentive or gesture of customer appreciation.

The “cash controversy” is nearly as old as the incentive industry itself. Studies have supported, and incentive businesses have been founded, on the belief that cash isn’t an effective sales motivator because it lacks trophy value that—when used too often—can be seen as an entitlement like any other form of compensation.

Yet, salespeople everywhere continue to clamor for cash. In a recent incentive industry survey, more than 60 percent of respondents admitted that, if asked, most employees would rather receive cash than other types of incentives.

Gift cards offer a middle ground between cash awards and merchandise or travel awards. Sometimes called “branded cash” because of the company or store identification on the stored-value plastic card, gift cards downplay the dollar value of the card and focus instead on the freedom of choice the card provides.

Dealers or retailers can reward an additional bonus of, say, $5 or $100 per sale. All winnings are automatically deposited on a company-issued VISA, MasterCard or other debit card. Salespeople are said to praise the instant gratification of the cards. Sales managers like them because they encourage performance. The funds from a stored-value card become tangible—and further associated with the employer-sponsor—once they’re converted into a purchase.

Branding the cash
Branded cash incentives have proven especially popular in recognition programs when regarding past behavior, rather than encouraging a behavioral change, is the goal. Managers can recognize employee contributions with a desirable award without having to consider the performance impact of a cash award.

Another alternative is the awarding of a SuperCertificate from www.giftcertificates.com. The cards come personalized and pre-loaded with a set dollar amount of, say $300, for example. These cards aren’t replenished and money is spent at one of 300 participating retailers. Western Union offers GiftGrams, a similar stored-value certificate used for incentives.

All company-sponsored gift cards recognize achievement and ensure employees are able to choose a reward they want. While plaques and merchandise work in some situations, monetary awards work every time.

The one-size-fits-all aspect of branded cash may work well for recognition programs, but may not have the desired effect in existing performance improvement programs. This new generation of monetary rewards require tighter program structures and more enthusiastic promotional support if they’re to overcome the well-documented pitfalls of relying on cash as a motivator.

Conclusion
You can guide your salespeople through a downturn by assuring them that, given the right attitude, just about any negative can be turned around if everyone works as a team member. Appreciation can be as simple as a heartfelt thanks, a little time off, or the gift of additional career training. Stored-value gift cards and certificates are also increasingly popular motivators.

About the author
David H. Martin is president of Lenzi Martin Marketing, of Oak Park, Ill., a firm specializing in water improvement and environmental marketing that integrates old and new media. He can be reached at (708) 848-8404, email: newage@ attbi.com or website: www.lenzimartin.com

 
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