How to motivate sales managers
- Why is it important to motivate sales managers?
- How to motivate them to fulfill the plan: cash receptions
- Incentive to search for clients: non-financial ways
The main lever for managing the sales department is undoubtedly the motivation system. Motivation is a psychological technique that experienced managers use to motivate their employees to take a certain action. With a competent approach, the motivation system can significantly increase sales and achieve the company's strategic goals.
Salary + percentage of sales
This is one of the most common motivation schemes: an employee has a fixed salary, usually a small amount that he will definitely receive even if he does not sell anything. In addition to the salary from each sale, he receives a certain percentage.
The meaning of this scheme is simple: the more you sell, the more you earn.
Advantages are in the following: the scheme is simple, understandable and transparent; it can be easily calculated even manually, and managers always know how much and for what they are paid. In addition, the sales manager independently influences his level of income.
There are many more cons than pros:
- Unhealthy competition within the team - a manager who works with large clients earns more than others. There may be conflicts in the department.
- Lack of team spirit - managers are primarily interested in their own performance: they are not motivated to grow the company's performance and are not interested in helping colleagues.
- There is no incentive to expand the client base - the manager works only with regular clients; this is enough for him to fulfill the plan.
- Sales emphasis on a more expensive product - in order to earn more, the sales manager tries to sell a product that costs more, because he will receive a higher percentage of the bonus.
Salary + percentage of the plan
This motivation scheme is a modernized version of the classic scheme. The key role in it is played by the sales plan: the manager is charged a percentage of sales depending on the percentage of the plan completed.
The advantage of this scheme is that it is tied to the implementation of the sales plan, and this makes it more effective than the classical scheme. However, its disadvantages are the same as those of the classical scheme.
Salary + percentage of current customer payments
The meaning of the scheme is that bonuses are paid to sales managers after the company has received money from customers for a product or service.
Advantages: it encourages the manager to carefully work with receivables and regularly monitor payments from customers.
The downside is that the receipt of payment from the client has nothing to do with the professional qualities of the manager: the client can underpay absolutely all of his suppliers. In this case, the manager regularly receives less of his bonuses.
Salary + KPI
In order to create a personal interest of the sales manager in expanding the client base and increasing sales, his income must be closely related to the effectiveness of his work.
This is the essence of the scheme: a monthly bonus is introduced, which depends on the performance of quality performance indicators. For example, the number of calls or requests, the average check of a transaction, the conversion of potential customers into regular ones. The optimal number of key performance indicators is from one to three. The main thing is that these indicators are real and achievable. Otherwise, motivation can turn into demotivation.
- Focus on achieving results in several indicators that are important for the company.
- The ability to change indicators based on the goals of the company.
- Growth of active sales.
- Planning and calculating KPIs takes time.
- Unattainable KPIs demotivate employees.
In some situations, it is impossible to work without fines - we are talking about serious misconduct. Let us say a sales manager allows himself to yell at a client or grossly violates the dress code. To avoid conflicts, it is important to familiarize the staff in advance with the amount of monetary penalties.
Money is a motivation, although effective, but it does not work for long. In addition, not all employees can be stimulated equally with money. For example, one employee has a mortgage, so he wants to earn more. Moreover, the other is quite satisfied with the average salary, but is interested in a career, public recognition of merit, or the opportunity to spend more time with his family. Therefore, material motivation must be used together with a non-material incentive system.
Usually career growth means growth upwards. For example, assistant sales manager - sales manager - senior manager - lead manager - head of department. However, for small companies, all positions can be occupied, but there are no prospects for upward growth. In this case, you can create a career ladder in width. For example, divide the position of a manager into 3 categories. Each step is a higher salary, higher coefficients and additional privileges.
By improving the qualifications of employees, you thereby motivate them for career growth. Training helps to acquire new and strengthen existing competencies, and people feel their importance and understand that while they work in the company, they develop and grow within the same position. In addition, it is always interesting to evaluate yourself from the position of "who I was and who I have become."
How to reward an employee for a high result without spending money on it? For example, a convenient mode of operation. Some of the sellers want to come later, some need a day off, and some, maybe, want to work remotely from home.
Make sure that employees are as comfortable as possible working in the office. There should be places where he can not only work, but also relax.
Praise and gratitude
Praise from the leader, both alone and with the team, increases self-esteem. Therefore, many companies still use honor boards - real and virtual.
Having regular feedback between employees and managers builds open relationships and builds trust.
Lack of feedback leads to chaos. Unresolved tasks appear, conflicts arise, and employees do not understand how useful and important their work is for management, whether they are moving in the right direction.