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Sales Motivation - Why sticks and carrots alone don't work
What
motivates people to sell? What drives people to sell more and reach for
higher goals? The traditional business view is that incentives like
bonuses, prizes, and awards are the best way to drive production. In the
last couple of decades though, social scientists have been looking at
things from a different perspective.
When
tasks are simple and goals are clearly defined - make 20 cold calls;
schedule 4 sales appointments - incentives like money and pats on the
back work well to foster productive behavior. The "this - that"
incentive model promises if you do "this" you'll get "that" reward. It's
the old carrot and stick idea: people want positive rewards and don't
want to get stuck on the bottom of the sales chart.
In
situations when the goals are more complicated though, these kinds of
extrinsic incentives don't work as well. In fact, according to business
analyst and writer Daniel Pink, extrinsic financial incentives can
actually dull inspiration and lower results.
Think
about it this way. Extrinsic motivators cause us to narrow our focus and
keep efforts and attention concentrated on the goal at hand. The
problem is that when our eye is fixed so closely on the prize - closing
the deal, winning the trip to Cancun, hitting the numbers - our personal
inspiration and creativity suffer.
Pink
observes that business in the 21st century requires a different
perspective, one that sees internal motivators as the fuel that drives
successful behavior. He mentions three core principles that underlie
personal satisfaction and achievement. The first is autonomy: people
want to feel in control of the direction of their lives and activities.
The second is mastery, the desires to keep improving at the things we
feel are important. The last principle is purpose or meaning; people
have a natural longing to live and act in the service of something
larger than themselves.
In the
short run, in situations where work is less complex and more mechanical,
external rewards provide the right kind of motivation to keep people on
task and drive productivity. But when activities involve creativity
solutions and higher cognitive functions, these core principles of
autonomy, mastery and meaning are the real drivers.
You may
know that Google famously adheres to a 20% policy that encourages
employees to spend 20% of their workweek, one day out of five,
developing their own projects as they see fit. Other companies have
created a ROWE or Results Only Work Environment that allows employees to
work when, how and where they like as long as the work gets done.
Providing a business culture that fosters personal autonomy, mastery and
a sense of purpose is one of the best ways to incentivize employees
whose jobs require more than simple mechanical tasking. You don't have
to be in a cutting-edge tech field to see this work.
Our call
team at PMA is responsible for not only making sales appointments for
our client agencies, but making sure those appointments are
well-qualified. This means asking questions to determine a prospect's
"buying attitude" as well as finding areas of dissatisfaction or pain
with their current agent. Engaging prospects and asking the right
questions is a creative process that involves active listening and
empathy - skills that can't be easily incentivized.
Commercial
insurance sales often involve more complex activities - evaluating
risk, finding particular coverage solutions, networking,
relationship-building, and much more. Writing a policy with a lower
premium is one way to win new accounts, but when the variables are more
complex and the potential solutions more diverse, the studies show that
extrinsic rewards and the narrow focus they encourage just don't work.
Agencies,
on the other hand, that foster the principles of autonomy and mastery
and give their people a sense of purpose beyond reaching monthly sales
goals realize a better return on their motivational investment. Employee
retention is higher too because people enjoy a deeper satisfaction from
their work and develop true loyalty to their employers.
Since
producers are competitive by nature, external rewards serve as
benchmarks for achievement. But when it comes to the fire at the heart
of the engine, companies investing in these core human values have a
happier, more productive sales force.
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