Sales people are by nature risk takers. Their success or failure, and significant parts of their income if they are commission earners, are in their hands. Sales is one of the very few job categories where performance is instantly measurable, and usually linked to rewards and threats. So what happens when outside factors reduce demand? How do you keep them motivated and rewarded when customers reduce spending?
Being fair is important. If you have reduced forecasts because of the economic climate it follows that you are expecting your sales people to make less sales. By then continuing to incentivise your sales team based on the original quotas, you will be condemning at least some of them to reduced income and failure to make target, however hard they sell.
You are likely to build resentment and damage motivation, which is the last thing you want in a reduced market.
Consider reducing quotas in proportion to your lower forecast, even if that means some sales people will earn more for selling less. Listen to their concerns and suggestions, provide training and coaching to improve performance.
There’s no ‘one size-fits-all’
Different categories of sales people will react differently to tough times. The stars typically have a very strong inner motivation and self-belief and will often see tough times as a challenge. They should be assisted to innovate, to attack the cash cows of weaker competitors and increase the range of products bought by customers.
Increased incentives for exceptional performance may make financial sense right now. Increased turnover will more than pay for the additional expense. Non-commission incentives like luxury weekends for the family may have more value than the equivalent cash.
The core sales people are likely to be anxious, especially if they are commission earners. Commission is a part of their income and they face the possibility of earning less and the consequent financial pressures. How they are performing is very visible and accordingly they are often first to feel threats to their jobs.
Do not assume that pressure will drive them to new levels of achievement. This works for some but others will get desperate and try too hard; buyers avoid buying from desperate sales people.
The downturn will not last forever and you will need a core of good sales people when the good times return, so ensure that they maintain their pride and sell at least somewhere near their target. Be careful about threatening their jobs.
Sales support becomes more crucial than ever. Cutbacks on sales aids, marketing or technical sales support will produce negative returns. By contrast, money spent on creating increased sales performance is likely to be a good investment in bad times. A big motivator for sales people is to feel needed and supported.
Supplement this with simple additional incentives for good performance, like attendance at a sales conference or dinner with the CEO.
Deal sympathetically with real financial difficulties from reduced commission. You do not want your sales people moonlighting or worse.
The generally underperforming group of sales people, the laggards, are perhaps the most difficult group to incentivise in tough times. Some of these will be average to good sales people going through a bad patch. Treat them as you would the core group, and give them every support to break out of the doldrums.
The genuine underperformers will be dragging down the whole group and opening the sales team to increased criticism and pressure. Start by retaining them and ensuring appropriate support but you may have to redeploy some of the worst to keep the averages acceptable.
While considering how to manage all these incentives you should be aware that a special focus on the sales people, however justified, can cause resentment in other employees. Consider how to motivate and support them as well. In a downturn you want all your people motivated and doing the best they can.