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How to keep your sales wheels turning

April 11, 2014 in Attitudes & Behaviours, Education in Sales, Sales Research, Sales Training, Self Development

Maintaining momentum in a sales career requires a proactive, disciplined approach. There are many things to consider and put together to achieve an effective selling week and sales year. The onus is on us, the salesperson, to make the most of what we have. However, many sales people unfortunately adopt the approach that it is their company’s responsibility to train and educate them, to provide everything they need before they can truly be effective as sales people.

By contrast, enlightened, highly effective sales people recognise that they need to invest in themselves, invest in their own learning and continuous development, make the most of what they have and create opportunities whatever their resources. A five year longitudinal study[1] of more than 1,000 B2B sales people, from 40 industries looked at what separates top performing sales people from average ones and revealed, amongst other things, that these top  performers took a proactive approach to their ongoing development; they took responsibility for their part in helping their company and customers be successful; and they continuously looked at ways they could attain mastery in their sales careers – despite management and resources, and always without prompting.

So what can we learn from these top sales performers? What do we have to do now to keep our sales wheels turning? How do we create our own perpetual learning environment (PLE) to help us be successful?

 

1) Adopt a learning mindset

open-to-learningThe first thing is that you need to be open to learning. We don’t mean this in the formal classroom sense though; it is about a mindset of being open to seeing every opportunity – good and bad – as a learning opportunity. Thus it is about self reflection, recognising your part in the processes you are involved in. The top sales performers from the study engage in self-appraisal and continuous learning.

They:

  • Ask for feedback on their performance and the degree to which they met clients’ expectations,
  • Collaborate with colleagues and do not allow competitiveness to get in the way,
  • Recognise and act on the need for continuous learning and development,
  • Evaluate their performance and competencies and initiate development activities without prompting.

 

2) Collaborate with others to get the job done

CollaborativeWorkingSelling is often portrayed as a solitary role – sales people out on the road running their own territories, the lone wolf, and so on. Top sales performers are not the lone wolf type, they know the importance and power of collaboration both within their own organisation and out with their clients and networks.

They:

  • Invest time building collaborative, customer-focused relationships inside their organization,
  • Keep current on developments that affect customers’ business strategies including emerging trends and customers’ competitors,
  • Look for ways to contribute to customers’ profitability and that of their own companies,
  • Creatively draw on the full resources of their organisation,
  • Excel at aligning customer/ supplier strategic objectives,
  • Use internal resources in ways that are appropriate to the potential profitability of serving individual customers,
  • Introduce customers to other suppliers and potentially valuable support resources.

 

3) Develop a Mastery Mindset

mastery-mindsetNow some of you are already doing these things and this is merely an acknowledgement and validation of your life skill practices. However, if we expect our organisations to provide us with all the support we need to be effective sales professionals, we might remain waiting. What we all need to do is step up to the plate, take the initiative and invest in ourselves. Top sales performers see their relationship with their organisation as a partnership – one where they work together in concert to make the most of the opportunities available to them. Developing effective sales capabilities is more than a one or two day training event on sales theory and skills. If you want to emulate top performing sales people and become one yourself then you need to take a holistic approach by integrating both formal and informal elements into your daily practices. The most effective way to learn and develop a skill, behaviour or mindset is to apply it and practice it on the job and in real life situations. Paying conscious attention to the core elements of your sales role you will begin to internalise, own and apply what you learn.  In that way what you learn becomes habit and part of your way of being. We cannot expect to become masters in our chosen field overnight. Expecting quick fixes is delusional. Attaining Mastery in anything is always a challenge. As Daniel Pink cites in his best-selling book “Drive – the surprising truth about what motivates us”, ‘Mastery abides by three peculiar rules:

  • Mastery is mindset: it requires the capacity to see your abilities not as finite, but as infinitely improvable.
  • Mastery is pain: It demands effort, grit, and deliberate practice.
  • Mastery is an asymptote: It’s impossible to fully realise, which makes it simultaneously frustrating and alluring.’

 

4) Create your own Perpetual Learning Environment

InfinityThere is a lot to think about to keep the sales wheels turning. That is why top sales performers create a schedule which incorporates a range of activities to keep them on track to the rhythm of their continuous development.

To create your own perpetual learning environment it is most useful to map out how you are going to be continuously learning, what to reflect upon, which insights will keep you fresh and on your toes.

Create a schedule that includes weekly, monthly and quarterly activities

 

Underlying principles of a Perpetual Learning Environment (PLE):

The core idea of perpetual learning is that learning becomes part of your daily routines. Thus ‘routine’ is not a state where you are driven by what you know and are skilled to do without much reflection or effort. Routine in a Perpetual Learning Environment is engaging yourself, your brain, in learning on a daily basis. If after a long working day you can’t answer the question “what have I learned today?” then learning is not yet part of your routine. To get to this state you have to make yourself aware – continuously – of what is happening with you, around you, and reflect upon it – if only for a few minutes – to see if there is anything, even the smallest thing, that you would want to do differently the next time. It is the acknowledgment that in an ever changing environment learning never ends. It is key to keep our sales wheels turning.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

 


[1] Research by Rosen Rosenbaum. Business Horizons, Jan 2001/Feb 2001, Vol 44, Issue 1. Seven Emerging Sales Competencies Rosenbaum, B. Industrial Psychologist

12 Sales Trends for 2014 – The Thinking Sales Organisation

December 19, 2013 in Education in Sales, Sales Culture, Sales Driven Organisations, Sales Research

As 2013 comes to a close we firstly wanted to thank all our loyal readers for their continued support of our work. We also thought you would like to get a sneak peek of our Annual 12 Sales Trends Report for 2014. With the unprecedented changes we are experiencing as a result of the digital revolution and the commoditisation of quality we can no longer manage sales by processes and numbers alone – it’s become a thinking person’s game.   As a result, the Barrett Consulting Group’s annual Sales Trends Report for 2014 has selected the theme: “The Thinking Sales Organisation”.

Barrett-Sales-Trend-Report-2014Sales operations are complex systems that involve many variable outcomes making it almost impossible to predict, with any degree of certainty, what will happen. Nothing in sales has ever been predictable. Now, with rampant change, that unpredictability has increased in pace and impact. That is why this Sales Trends report focuses on a number of important variables that will impact the success or otherwise of sales operations in 2014.
The following is a sneak peek of each of the 12 sales trends. You can purchase and download the detailed 49 page report of the 12 Sales Trends for 2014 at www.salesessentials.co/shop now to see which sales trends will have the greatest impact on your sales operations in 2014.

Sales Trend 1 – Sales Management Will Look to Drive Costs Out of Sales

In 2014, sales managers are going to come under increasing pressure to drive costs out of sales. While being effective and generating more business will continue as the main focus of selling, cutting cost out of sales and selling at better margins are going to be the two primary challenges, as management looks to squeeze profits in a market that is somewhat stagnant. As a result there are likely to be five major focus areas including: sales managers redefining sales territories; looking for new and more efficient ways to service low-value customers; and a shift away from volume as an indicator of sales success to a combination of volume and value.

Sales Trend 2 -  Telesales will have to make dramatic changes

telesales-need-to-rethink-operationsWith the increasing demands of more sophisticated buyers, telesales operators, who have traditionally focused on the uncomplicated sale of easy-to-understand commodities, are going to have to increase their knowledge base and learn to sell solutions to buyers who are more demanding, more knowledgeable and with higher expectations. This shake up means a radical re-think for telesales operations. Smart companies will see their telesales teams as a vital part of their overall sales operation. Some may even bring back in house those telesales teams that were previously outsourced or off shored.

Sales Trend 3 -  Sales Excellence Managers will find their real role

Smart companies are dispensing with their sales excellence operations and incorporating it back into the sales management function.  This sales trend will see sales managers, who are and have always been responsible for sales excellence, face pressure to resume this responsibility and deliver sales excellence. In the process sales excellence managers will either revert to their original role of sales training managers or find themselves being deployed elsewhere in the sales operations chain.

Sales Trend 4 -  Sales Training Methodologies are going to change

Sales training is not going to disappear; however, it will change its shape. As the market becomes more complex and competition more virulent salespeople will need more, not less training. But they will also have less time to be trained. These two forces – increased competition with the need to up skill salespeople and less time for training – will make identifying different training methods key to success.  The trend in 2014 will be for companies to reduce the cost of training whilst still developing their salespeople. Blending e-learning with class room work and in-field coaching is going to become the focal point of training in the new year.

micro-sales-segmentationSales Trend 5 – The move to Micro Sales Segmentation

The complexities of selling in 2014 are going to demand a re-think on the part of sales managers. Relying, as they have in the past, on marketing’s broader brush approach to segmentation is not going to cut it anymore and sales will have to re-assess how it goes about segmenting target markets.  As sales is learning, becoming tighter, almost micro market focused, defining the most attractive segments is the function of strategic sales in 2014. Getting it wrong can end up by costing the organisation too much.

Sales Trend 6 – The low carbon economy sales opportunities

barrett-solar-install-smallDespite many governments lagging behind in terms of creating and endorsing low carbon policies and industries, forward thinking organisations are taking the lead on creating low / no carbon businesses and partnering with each other. And it’s not just big business, there is a growing number of SMEs (small to medium enterprises) driving change too. There are massively big opportunities for innovation and product/service development in a low carbon economy as well as social evolution.

Sales Trend 7 -  The normalizing of Social Media in Sales

This sales trend is seeing businesses really ramping up their use of social media and in much more sophisticated ways. Rather than seeing social media as a tack on to the marketing budget, smart businesses are now creating their own social media departments who are actively working with sales, marketing and other departments, in concert, to create real-time content that is engaging, relevant and interactive.

brain gearsSales Trend 8 -  A radical shift in sales mindset

This sales trend is all about the radical shift in the sales mindset that currently is underway in organisations as prophesised by the Cluetrain Manifesto 15 years ago.  Smart companies are moving from competition to collaboration, from ‘me’ to ‘we’.  They are involving everyone across their business to be meaningfully connected in some way to the customers.

Sales Trend 9 -  Procurement need to be solutions salespeople too

This sales trend highlights how the skills, knowledge and mindset of procurement professionals are being expanded to include the capabilities of highly competent solutions sales professionals.

The latest whitepapers, running commentary threads on Linkedin Procurement Groups across the world, and Procurement Conferences and education bodies are all pointing towards procurement coming of age as a value creator and provider. No longer can procurement rest its case on ‘lowest cost’, ‘cheapest price’ or ‘supply of goods and services’; it must assume responsibility for the creation and delivery of real value beyond a price and general supply.

sales-strategySales Trend 10 – The Legitimisation of Sales Strategy

This sales trend will see Sales Strategy become the hot discipline of business in 2014 and beyond as business leaders work out how to move their sales operations out from under the shadow of Marketing and being a purely tactical function to being a strategic operation that works across the entire business value chain delivering real value and real growth.  Sales Strategy will begin to be studied by those charged with managing a sales team as well as other management disciplines to ensure sales and organisational success.  Along with business and marketing strategies, sales strategy will take a lead position at the C suite.

Sales Trend 11 – Learning to sell in the Asian Century

We are already even more reliant upon China for our prosperity than any comparable economy, at more than one quarter of our exports. We are China’s number one destination for foreign investment and a leading beneficiary of the education aspirations of its growing middle class. Yet many of us remain deeply ambivalent about the world-changing economic transformation of China and underestimate our need to be prepared.  Smart companies are recognising the need to develop deeper engagement with their Chinese counterparts – in universities, industries and governments. More Australian salespeople will need to study China, travel, live, work and speak Chinese.

enlightened-sales-personSales Trend 12 – The Enlightened Sales Person

This sales trend is seeing a new kind of sales person emerging in our midst.  Smart companies are becoming aware that they need a new kind of sales person, especially at the higher levels of business.  Customers, particularly in the Australian market and increasingly worldwide, are looking for a collaborative, more enlightened approach to selling, where they can work with sales professionals who bring their in-depth knowledge an understanding of how solutions can be applied and who work with their customers who also have an in depth knowledge of their own business and challenges.

For the detailed version of the Barrett 12 Sales Trends Report for 2014 please go to www.salesessentials.com/shop to purchase and download your copy there.  You can also get complimentary downloads of the detailed Sales Trends Reports for 2013, 2012, 2011 and 2010 here.

Finally, on behalf of the team at Barrett we wish you, your families and teams all the very best for the festive season and look forward to reconnecting in the new year.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

The History of Sales Methodologies

October 11, 2013 in Business Acumen, Complex Selling & Transactional Selling, Education in Sales, Sales Culture, Sales Excellence Acadamy, Sales Research

Have you ever wondered just how many sales methodologies are out there and which ones work and which ones don’t?

Maybe you haven’t given much conscious thought to this subject but then again maybe you have.  Either way, if you are in sales or run a sales team or business and want to be more effective and successful it’s critical that you know what sales methodology will work best for you and your customers.

Unfortunately, the business world has been littered with more dubious sales methodologies than there are effective ones. Our business, at Barrett, is to help our clients improve their sales operations, and so we are constantly examining the various sales methodologies on offer and in use.  We need to be able to decipher what will work and what will not.  That is why for the better part of a year Dr. Peter Finkelstein, Barrett’s Head of Sales Strategy, has been researching the history of sales methodologies of the last 200 years including the current day.

Barrett_whitepaper_OCT13-200x284His research has culminated in our latest whitepaper: ‘The History of Sales Methodologies – why some work and other don’t’ (which you can access for free). It’s a fascinating read and if nothing else it will help you make more informed decisions about what sales methodologies work and which one is best for you and your customers.

So what did Peter find?

Well, you may have noticed that every now and then a new book on sales and selling appears in stores that claim to contain the secret to sales success. Many of these books (and their associated sales methodologies and training programs) promote themselves as being the very latest, revolutionary approach to selling that, according to the authors, will change the organisation’s performance (and its salespeople) and miraculously improve sales, profits and success.

The research raised questions: Are these sales methodologies are really new? Do they really represent a revolution in selling? And do they actually work or not?

In short, whilst many different sales methodologies have been introduced in the last 40 years, most are simply repacked versions of sales methods developed decades ago. The only real revolution in sales methodology (that the research could identify) took place in 1968 when Xerox Corporation created an internal sales training program and methodology to combat still competition in the photocopying industry.

Don Hammalian lead a team at Xerox Corporation that ultimately developed an entirely new approach to selling – a sales methodology that became known as Needs Satisfaction Selling. Prior to this milestone in the development of sales professionalism, there were many attempts at developing a sales method. Whilst some had limited success, if only for a period, most were flawed and couldn’t sustain the rapidly changing sales climate.

Needs Satisfaction Selling, encouraged salespeople to interact with their prospects and customers and involved them in the sales process. Up until then salespeople were taught to tightly control the sale and direct the focus of the sales interaction – essentially viewing prospects as the target of their endeavours. Now with the advent of Needs Satisfaction Selling salespeople were encouraged to ask what was important to buyers and then to introduce benefits of products and services that satisfied those needs.

Today, needs satisfaction, as a sales methodology, may not seem revolutionary. But when one considers that until that period selling methods were based on the use of verbal tricks (Barrier Selling – a method of asking a series of leading questions to which the response was logically “Yes”, and then trapping the buyer into agreeing to say yes to a request for an order); the appeal to emotions (Mood Selling – amongst other tactics, the use of children to pull at the heart strings of customers as the salesman pleaded for the support from a customer in order to earn enough to feed his child); Pyramid Selling (in which customers were incentivised with discounts to demonstrate their fondness for a new gadget); Formula Selling – a canned presentation which took no notice of the customer as a person, but simply spewed out a pitch in order to catch customers unaware;  and many other methods, one can see why needs satisfaction was so revolutionary.

The use of Information

help-customers-with-information-overloadWhilst, in the early days, salespeople were the primary source of information for customers, the role has changed. Today salespeople still have a role to play regarding information, but instead of being information providers, salespeople now help their customers sift through the information overload to find what is most relevant and accurate. That means,  as it was proposed in 1916, salespeople need to develop the trust of their customers and use their knowledge to help customers make the right choices.

Customers also expect salespeople to have a reason to meet (“will you help me save money or earn more?”). And most sales organisations and sales professionals have already responded to that call successfully.

Needs satisfaction selling and then, about a decade later, Neil Rackham’s SPIN Selling – with its heightened focus on involving the customer in the sales process, sharing control and asking questions – encouraged salespeople to not only invest time to understand the customers’ needs and expectations, but to also present customers with options that challenged their traditional way of thinking about problem solving.

These developments of sales methodologies – i.e. Xerox’s needs satisfaction and Rackham’s SPIN Selling – were real revolutions. Since then, the so called sales methodologies that have been introduced are merely rehashed wisdom of the past used to promote some new sales training course instead of offering real innovations in sales and selling.

Despite the range of the latest ‘new’ sales offerings, what is consistent then and now is that customers expect salespeople to come to them with new ideas and to present these with conviction, prepared to be challenged and willing to have robust discussions. All trust-based relationships involve robust, healthy, mutually respectful discussions. And that’s the point – mutual respect, not salespeople who challenge buyers because they can, but rather who interact with their customers to find the best solutions for them.

The point is simple – in the modern paradigm the role of the sales professional has changed. Now even more than when the concept was first developed in the 1970’s, salespeople have to be consultative. They need to be business people who can sell, rather than salespeople who understand business. They need to have the skills to establish and fast track trusted relationships with a range of decision-makers, in a variety of organisations where they can facilitate a fair exchange of value.

Since the 1968-1980 period the most revolutionary process in selling and one that companies have still not managed to fully come to grips with, is Solutions Selling.

it-is-not-about-you-it-is-about-the-customer-smallThe true Solutions Sale is about the customer, now fully empowered, well informed and with ample choice, working with specific suppliers / service providers whom they can trust. It is about those sales organisations that are learning how to be sufficiently collaborative with other suppliers who can work with them so that they – as a team – can develop a best fit solution.

When sales professionals and, just as importantly, the organisations they work for, provide their customers with a range of meaningful benefits, including cutting down on wasted time, reduced risk and providing solutions that directly benefit the buyer, we will have successfully migrated to what solutions selling is truly all about – providing customers with a fair exchange of value that meaningfully benefits their businesses. This is the real next revolution in selling.

For the full whitepaper and table of the History of Sales Methodologies, click here.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

Sales on the University agenda? – The final results

August 9, 2012 in Attitudes & Behaviours, Sales Leadership, Sales Research

Sales has been excluded from the academic landscape, until now. Barrett is one of the first consultancies to ask the question: Should selling be studied at degree level at University?

Why?

Based on Barrett’s long standing involvement in sales and the development of sales professionalism, we wanted to fully understand how people think and feel about the profession of selling not being studied at Australian universities and business schools and how strongly they felt about its inclusion.

Specifically, Barrett wanted to delve into the perceptual reputation of the profession of selling within our communities and the “usefulness” of having sales qualifications at degree level, that aimed to improve the reputation of the profession and the people in it. The study attempted to understand the state of existing development for sales professionals and how tertiary education in selling and sales could further assist in ensuring sales and selling is viewed as a profession on its own right.

Survey: Should Sales be Studied at University

Survey: Should Sales be Studied at University

Barrett’s survey of business professionals was completed mostly by Australian based business owners and leaders, sales managers and sales professionals with the majority aged between 31 and 60 years old. Seventy percent of respondents have a Graduate Degree or above. The survey consisted of 24 questions and the high level results showed that:

  1. More than half of respondents (54%) said that selling does not have good reputation
  2. More an 70% agreed that a tertiary qualification would improve the image & reputation of salespeople and would improve their employability and 82 % agreed it would create better sales standards and better salespeople
  3. 88% said that selling is seen as a vital part of business
  4. 92% agreed that selling should be in the curriculum at Universities and Business Schools
  5. only a bit more of 52% undertake professional development at least once a year
  6. less than 19 % agreed (or were unsure) that skills and knowledge required in Selling are well trained in business and therefore do not require a degree qualification

The overall findings of the survey were significantly in favour of Sales and Selling being studied at higher levels at University, with senior managers and business owners seeing a distinct advantage in developing and employing tertiary trained sales people.

In qualitative discussions held with salespeople, managers and customers throughout Australia, Barrett learned that it is a general belief that the typical salesperson is less than honest, is likely to cut corners or attempt to trick customers into making a purchase decision and even when they interact with the client their sole focus is the product or service they want to sell, rather than the customer’s issues.

Whilst the image and reputation of salespeople today is less than savory, business does understand its vital importance as a function of success, sustained growth and profitability. What is abundantly clear is that a tertiary qualification in sales would improve this image and reputation challenge faced by sales. The only conclusion that can be drawn is that there is an overwhelming need to have some form of tertiary qualification associated with sales and selling within Australia.

Sales and Academia

A combined 70.0% (no and not certain) respondents suggest that the profession of sales is not taken seriously by the academic institutions. This is obviously a perception and whether realistic or not, means that this is the way salespeople see and feel about academic institutions. 46.8% – the largest respondent group for this question, believe that selling should be studied at degree level, as a separate degree, whilst 72.2% believe that selling needs to be on the curriculum at universities and business schools, even if not as a formal degree.

Conclusion: irrespective of whether sales and selling is part of another degree, or a stand-alone degree (as proposed by 48.8% of respondents), there is overwhelming evidence that a degree in selling is needed. That it should be a degree in its own right is a moot point, though research would tend to point toward it being stand alone degree.

The results bring us to consider how do we professionalise selling and create a pathway for the 21st Century individuals to become sales professionals. The thinking and capabilities required to succeed in today’s complex sales environment are in the realms of the standards of MBAs and other business qualifications. Why is that it is noted that medical doctors, engineers, pilots and other skilled professionals invest 6-8 years of their own or business’ money and effort and time into attaining their qualifications, yet the sales industry may have only a few papers within tertiary education? Moreover, other professions are regulated enough to ensure professional development is a must (legally that is) and yet a profession like sales and selling in these markets and times is seen as not taken seriously?

sales is in the shadows

sales is in the shadows

Barrett believes that it is about time selling and sales stepped out from under the shadows of marketing and MBAs to be a qualification in its right.

The good news is that for the first time in Australia, Selling is on the University Agenda: on Wednesday 8 August, partners Barrett and Swinburne University of Technology launched the Barrett Sales Essentials – Australia’s first and only VET accredited, University endorsed sales training and development program providing a Diploma in Business and Certificate 4 in Business Sales.

The launch signals major change for Australia’s business sector and salespeople nationally with Barrett’s Sales Essentials also eligible for Victorian and Federal Government funding.

Through the Barrett Sales Essentials Program businesses now have the opportunity to tertiary qualify their salespeople, increase profit margins and employee retention and recruitment and promote their commitment to quality sales standards and ethical sales practices.

Salespeople, sales managers and business owners will significantly improve their sales strategies, planning, prospecting and sales approach and behaviours to create sustainable business practices and improve results.

Get your complete copy of the Should selling be studied at degree level at University? Whitepaper here.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

Rethinking Sales Incentives – The Science of Motivation

August 25, 2011 in Attitudes & Behaviours, Sales Management, Sales Research, Success

‘Rethinking Sales Incentives’ was voted as the Number 8 Sales Trends for 2011. Incentive programs, commissions and bonuses have been synonymous with sales teams for at least the last 50 years. However throwing more money at sales teams to perform better, especially in these more complex and creative times may be a thing of the past.

While the ‘carrot and stick’ approach has been reasonably successful for most sales teams in the twentieth century, especially when sales people were simply selling product, scientific research is showing if you want smart thinking sales people this approach is no longer viable. If we are to have sales people who can navigate ambiguous markets, create new opportunities, forge new partnerships, and sell real value, then our traditional incentive programs are often the wrong way to motivate people for today’s challenges. Yet external rewards such as bonuses, commissions or incentives are still strong features in sales management forums.

In 2011, more and more companies will be enlisting new approaches to motivation, rethinking how they incentivise and reward their sales teams both intrinsically and extrinsically.

Australian Perks

Money Perks

For many years it has been believed that sales people are only motivated to sell if they have strong financial incentives to do so. For a number of sales people this may certainly be the case, however, it would be a false to assume that this is the case for all sales people. Another false assumption is that the more you incentivise someone the better they will perform. Science is turning the business world upside down, challenging ‘norms’ and long held beliefs about what motivates and drives people.

As the world, and with it the business world, becomes more complex, it will be harder and harder to determine who did what and who deserves what because many tasks are no longer simple transactions. With selling becoming less transactional and relying more heavily on teams rather than a lone sales person to bring in the deals the compensation issue is becoming more complex.

Who deserves what? How much should they be paid? Many companies spend hundreds if not thousands of hours going around in circles trying to work out what is fair and reasonable. And to no avail. This perplexing issue could have a more simple solution, although some people may not like it.

According to the latest research synthesized by Daniel Pink in his latest bestselling book, Drive: The surprising truth about what motivates us, the best use of money as a form of compensation is to take the issue of money off the table.

His book highlights what scientists have known for some time now:

‘The more prominent salary, perks, and benefits are in someone’s work life, the more they can inhibit creativity and unravel performance. As Edward Deci explained when organisations use rewards like money to motivate staff, “that’s when they’re most demotivating.” The better strategy is to get compensation right – and then get it out of sight. Effective organisations compensate people in amounts and in ways that allow individuals to mostly forget about compensation and instead focus on the work itself.’

I know this may be heresy to sales people, teams and sales leaders, because for so long big commissions and bonuses have gone hand in hand with sales teams. Well, maybe this could be a thing of the past.

What the scientific research is showing is that ‘for simple routine tasks which aren’t very interesting and don’t demand much creative thinking, rewards can provide a small motivational booster shot without harmful side effects.’ In short if you want people to, for instance, stack boxes more quickly, offer a bonus to those who stack the most in the shortest space of time and to the standard you want. As long as the task is simple and mechanical in nature, bonuses work to lift performance.

However if the task or situation involves even rudimentary cognitive skill i.e. you have to come up with ideas or solutions, possibilities or plans, then a larger reward leads to poorer performance.

With transactional selling going the way of the internet leaving most sales people out of the equation, the rest of selling now requires the need to deal with complex solutions, consultation, problem solving and prevention, creativity and collaboration. All of these tasks require cognition. Our brains need to work, think, sort stuff out, create options and so on.

Another key finding from Pink’s book that throws cold water on the money motivator is that most people are not motivated by money at all. Yes, you need to take money off the table, so it’s not a day to day issue, and pay the right amount from the beginning, and instead focus on fostering and developing the following ideals in your business and your people. Then you will find lifts in performance that are far more significant. The three elements of true motivation are:

Autonomy – the desire to direct our own lives

Mastery – the urge to get better and better at something that matters

Purpose – the yearning to do what we do in the service of something larger than ourselves.

If you would like to explore this further I would suggest you get a taste for it by viewing this 10 minute video by Daniel Pink which is a very good summary of the topic at hand.

So what does this really mean for sales teams? Well, it all depends on what you sell, how you sell it, how you run your sales business and what you want your sales people to do:

  • If you are in simple transactional sales where your sales people do not really need to think in any complex way then maybe you can continue with your current bonus or commission schemes
  • If your sales culture is more complex or is more of a lead team approach then you may need to rethink the way you reward people

One client of ours in the world of new home sales has taken the radical move to pay its sales people a far more substantial base salary to take money off the table. Instead of sales people panicking about where their dollar will come from and how they will afford to feed their family this week, they want their sales people to focus more readily on better quality sales efforts rather than the mental churn and burn often seen in this industry. It is early days and the transition will be interesting. However, in their endeavour to bring about better standards of professional selling in an industry known for its ‘cowboy’ culture, changing the way they remunerate their staff along with continued professional development such as coaching, combined with a committed leadership will see them prosper. If they can stand steady and hold their own in the face of challenges I have no doubt they will see the fruits of their labour and out perform their competition in the long run. And isn’t that the irony, when we remove these financial incentives we will get better performance.

An example of a company who have already taken this on board and making it work is Australian company Atlassian.

It’s a brave new world for sure.

Remember everybody lives by selling something.

Author: Sue Barrett, MD of www.barrett.com.au

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