Directory UMM :wiley:Public:college:Dalrymple:

(1)

Motivation

What is Motivation??

•

Drive

to initiate an action.

(2)

Motivation

Reasons for Motivating Salespeople

• Frequent rejection

• Physical separation from company

support

• Direct influence on quality of sales

presentation

(3)

Motivation

Determining Your Motivational Needs

Second Number to left of statement indicates

the category; how many in each:

Number

Stability, dependency, protection,

structure,

pension, law & order

(5)

Motivation

Maslow’s Hierarchy -- Salespeople’s responses

Number Percent Number Percent

8

4

7

86% 4

3

1

51%

9

5

80% 6

5

4

40%

3

4

1 74%

7

2

39%

3

5

2

66% 8

3

6

37%

2

5

6

63% 4

5

8

37%

5

9

57% 8

5

3

37%

(6)

Motivation

INDIVIDUAL NEEDS

Maslow’s

Sales Force

of NeedsMotivators

•

Self-actualization

Challenging tasks

calling for

creativity

•

Esteem

Recognition programs

•

Belonging

President’s Club $1 mil.

(7)

Motivation

Herzberg’s Hygiene-Motivation Theory

• Based on in-depth analysis of engineers

(Transparency 13-7)

(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

(9)

Motivation

Career Stage Research Findings

•

Hospital Market (13-9): 1984 Study of 250

distributor salespeople with 28 wholesalers of

disposable medical supplies. Commission

(10)

Motivation

•

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

(11)

Motivation

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 --

(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

(13)

Motivation

A Model: Expectancy Theory System

Effort

Performance

Reward

Expectancy

Instrumentality

Valence

Likelihood

Importance

increased

greater

of receiving

effort

performance

more of

will lead to

certain

greater

more

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

(15)

Motivation

Role Perceptions

•

Sales is a boundary spanning position -- you must

be responsive to expectations of multiple people.

Company

Manager

Sales

Customers

Family

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

(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

(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

(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?

(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?

(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

(22)

Motivation

Determining Your Motivational Needs

Second Number to left of statement indicates

the category; how many in each:

Number

Figure 13-2:

Summary of Classic Motivation Theories

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

(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

(26)

Motivation

Herzberg’s Hygiene-Motivation Theory

• Based on in-depth analysis of engineers

(Transparency 13-7)

(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?

(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?

(29)

Why the concern

for sales force

motivation?

Why the concern

for sales force

motivation?

What are the

different theories

of motivation?

What are the

different theories

of motivation?

Motivation Tools

Self-

Quotas

Incentive

Recognition

management

programs

Motivation Tools

Self-

Quotas

Incentive

Recognition

management

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

(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

(32)

Motivation

Role Perceptions

• Typical Sales Job Activities

• Where is their potential for the

following:

– Ambiguity

(33)

[image:33.720.44.674.56.505.2]

Figure 4

Job Satisfaction and Career Concerns

(34)

[image:34.720.117.670.160.410.2]

Figure 2

Relationship Between Career Concerns and Age

Proportion of Career Concerns Sales Force Exploration 14% Establishment 29% Maintenance 42% Disengagement 15%

Age Range

(35)

GIVING STATUS TO SALESPEOPLE

1.Compensation

2.Job Title

3.Company Car Upgrade

4.Car Phone

5.Field Sales Council

(36)

[image:36.720.29.662.167.406.2]

Figure 13-5:

Model of Motivation

Effort

Effort Performance_Performance Rewards_Rewards

Expectancy

Likelihood that increased effort will lead to

greater performance

Instrumentality

Likelihood that greater performance will lead to more rewards

Valence

(37)

Motivation

Role Perceptions

•

Sales is a boundary spanning position -- you must

be responsive to expectations of multiple people.

Company

Manager

Sales

Customers

Family

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 feedbackProvide technical Provide feedback information

SERVICING THE ACCOUNT Stock shelves Count inventory Set up displays Promote local advertising

ATTENDING CONFERENCES Sales conferencesProduct exhibitions Client conferences Training sessions

TRAINING/RECRUITING Recruit new reps Train new reps Travel with trainees

ENTERTAININGParties Dinner Drinks Lunch

TRAVELING Out-of-Town In-Town DISTRIBUTION Sell through Train

Establish relationships Credit

(39)

Figure 13-6:

Self-Management Techniques

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, 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

(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.

(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.

(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

(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

(44)

Motivation

INDIVIDUAL NEEDS

Maslow’s

Sales Force

of NeedsMotivators

•

Self-actualization

Challenging tasks

calling for

creativity

•

Esteem

Recognition programs

•

Belonging

President’s Club $1 mil.

(45)

Figure 13-6:

Use of the Various Types of Quotas

14%

55%

28%

32%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Bar 2

Bar 1

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

(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

(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)

(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

(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

(51)

Motivation

Incentive Programs

• What is difference from regular compensation

such as commission?

• Key decisions

–

Goals

--

Rules

–

Timing

--

Awards

–

Participants

--

Publicity

–

Theme

--

Cost

•

What is difference between

(52)

Table 13-2:

Types of Incentive Awards

Used by 168 Firms

Percentage of

Type of Award

Firms Using

Cash

59

Selected Merchandise

46

Merchandise Catalog

25

(53)

EXPERIENTIAL EXERCISE

Develop an incentive program for the following company. The report of the program should include a statement of the purpose of the program, its budget, and the specifics of the program such as theme, prizes, rules, timing and publicity.

ABCO Inc. is located in Dallas, Texas. Its sales last year were $25,750,000 with pre-tax profits of approximately $400,000. Growth has been steady over recent years, averaging about 10 percent a year. ABCO manufactures and markets vinyl binders, loose-leaf products, and index tabs. These products are used as manuals, price books, and advertisements by their clients. The bulk of ABCO’s sales are to industrial companies. Some of their major customers include EDS, 3M, Dr Pepper, and Xerox. Sales in the first half of the year are usually around 65% of total sales, while sales in the last quarter are usually about 15-20% of total annual sales. The margins (net sales minus cost of goods sold) on these products are approximately 40% on average. The margins are this high because the products are custom designed for the customer. Depending on the product line and customer situation, ABCO’s selling cycle will vary from two weeks to three months.

The sales force consists of six women and three men. They are all located in the Dallas/Fort Worth area with exception of one of the men, who is located in Oklahoma City. They range in age from 25 to 48 years old. Two of the men and one of the women have been with the company since its inception 15 years ago. All of the people are college graduates.

The compensation plan consists of a base salary plus commission on sales over 90% quota. All salespeople are expected to make quota. Their average income is $42,000, though this ranges from a high of $68,000 to a low of $21,000. Commissions are expected to be approximately 40% of their income.

(54)

AN EXERCISE TO DETERMINE YOUR MOTIVATIONAL NEEDS

To perform the exercise, read through the following statements…check those which are most important in motivating you to do your best work.

Select the ten most important statements. 629 Job security

847 Being trusted to do my job the way I think it should be done. 333 Participating in work group conversations.

311 Having adequate shelter to protect from the elements. 836 Having a job which allows me time with my family. 151 Having an opportunity for personal growth. 937 Socializing with my friends.

743 Being considered for an advancement opportunity. 431 Working with other people.

819 Having children.

458 Doing something meaningful with my life. 757 Being in a position to contribute new ideas. 828 Having an associate that looks out for my interests. 735 Including other people in what I do.

949 Being selected for an exclusive award.

234 Being involved with work associates in social and recreational activities. 616 Being sexually satisfied.

146 Having a responsible person tell me when I’ve done a good job. 539 Having an active part in work related social activities.

(55)

YOUR SCORE

(56)

MASLOW’S HIERARCHY OF NEEDS

Self-Actualization

Self-Esteem

Love-Belonging

Safety-Security

Physiological

Intense job challenge, full potential, full expres-sion, creative expansion.

Achievement, respect, recognition, responsi-bility, prestige, independence, attention, impor-tance, appreciation.

Belonging, acceptance, love, affection, family and group acceptmance, friendships.

Security, stability, dependency, protection, need for structure, order, law, tenure, pension, insur-ance.

(57)

Motivation

Maslow’s Hierarchy -- Salespeople’s responses

Number Percent Number Percent

8

4

7

86% 4

3

1

51%

9

5

80% 6

5

4

40%

3

4

1 74%

7

2

39%

3

5

2

66% 8

3

6

37%

2

5

6

63% 4

5

8

37%

5

9

57% 8

5

3

37%

(58)

Comparison of Motivators and Hygiene Factors

Percentage Frequency

40 30 20 10 0 10 20 30 40

Low High

Satisfaction Satisfaction

Motivators

Achievement

Recognition Work Itself

Responsibility

Advancement Hygienes

Policies

Tech. Supervision Salary

Interpersonal Relations

(59)

Figure 13-4:

Career Stage Characteristics

Exploration Establishment Maintenance Disengagement

Career Concerns Finding an appro- Successfully estab- Holding on to what Completing one’s priate occupa- lishing a career has been career.

tional field. in a certain occu- achieved; reas- pation. sessing career,

with possible redirection.

Motivational Needs Learning the skills Using skills to pro- Developing Establishing a

Job Related required to do duce results. broader view of stronger to job well. Adjusting to work- work and organi- identity outside Becoming a con- ing with greater zation. of work.

tributing mem- autonomy. Maintaining a high Maintaining an ber of an organi- performance acceptable zation. level. formance level.

Personal Establishing a Producing superior Maintaining moti- Acceptance of

Challenges good initial pro- results on the vation, though career

fessional self- job in order to possible rewards plishments. concept. be promoted. have changed.

Facing concerns about aging.

Psychological Support Achievement Reduced compe- Detachment from

Needs Peer Acceptance Esteem tiveness the organization Challenging posi- Autonomy Security and tion Competition Helping younger zational ife.

(60)

Career Stage Effects on Sales Per Salesperson

in the Hospital Market

Sales (000)

Exploration Establishment Maintenance Disengagement