4 Sales Motivation Hacks that Every Leader Should Know…

1. Foster a Culture of Collaboration

I love stories of salesmen chipping in to help each other. It makes me feel all warm and fuzzy. Yes, every team should have a goal to collaborate. I think collaboration stems naturally from a lack of conflict. But inherently, sticking points between salespeople will arise in your culture. You’ve got to be prepared for that. So, here’s two common conflicts we see while consulting.

  • Who made the sale?
    The conflict between salespeople over who gets the commission is something leaders have been dealing with since the dawn of sales. It’s important to plan out how commissions will be divided in every given scenario BEFORE they pop up.
  • Competition
    It’s important to consider that salespeople are naturally competitive. It can either be a point of conflict or a point of motivation. It all depends on if you can harness that energy properly. So set up systems for them to do it. Organize an awards program to honor the top salesperson. A simple trophy goes a long way. Whatever works for you, but I guarantee that if you don’t set something specific up to harness that driving force, it will rear it’s ugly head in a way that isn’t productive.

2. The salesperson commission split

There’s a myth floating around the internet that goes something like this.

“The practice of financially insulating salespeople will work against you. You should have a 90/10 split between commission and base pay to encourage salespeople to be ever vigilant.”

The argument is sort of based on Darwinism. Let the strong survive, and hey, it can work in some industries, but to say it’s the best for all is irresponsible. Figuring out the magic number for your company’s sales team is so much more complicated than that. We don’t live in a black and white world, so let’s avoid hyperbolizes.

I’ll tell you a story to illustrate my point. I worked in sales as a young man for a company named Quickpen. They took this idea to the extreme. 100% commission. As a young man, I found the opportunity to prove my skills appealing. However, I noticed something very interesting, after working there for a while, I became disenchanted even though I’d experience success. Any expectation of me doing work that didn’t lead to a sale, or even showing up to company events seemed like a total waste of time. Everyone had his or her own way of selling the product, and there was no real shared messaging. Also, the systems in place for tracking customer data (CRM) were completely neglected. So that meant the relationship with the customer wasn’t actually owned by the company, but the individual salesperson. So when the inevitable time came when a perfectly good salesperson couldn’t hit their numbers, their motivation was crippled, and they were forced out. Soon after most of their clients would leave also. Even I got to a point where the ups and downs were wearing on me. So I left.

I founded a software company, one that rivaled Quickpen. I remembered the lessons I learned. I wanted to focus on the lifetime value of the customer. So how did I do that? First and foremost I needed to unite our team under a shared belief, and goal of the company as a whole. Because to me, they weren’t just selling software, they were selling us. Next, I needed to incentivize my team to log customer data into the company CRM so that the lead would be ours forever. Airtight.

That’s why I went with a 70/30-commission split. I wanted the base pay to be enough to live on. This made sure that they showed up to meetings, and fulfilled the obligations needed to create a culture geared towards long-term relationships. The effect was incredible. I retained salespeople longer and in turn our customers. And you know what? It worked. We crushed Quickpen.

Now, by no means am I saying that 70/30 is the best way to split commissions. I’m saying it was the right choice for our industry and I had to figure that out over years of trial and error. If I had read somewhere that 90/10 was the best split, then I doubt we’d have been so successful. The bottom line is, every industry is different, so commission splits need to be also. It’s all about knowing your market, and the different needs you’re trying to fulfill.

3. The Tiered Commission Structure

A tiered commission structure basically means the more sales someone makes, the higher their commission gets. There’s a lot of hype about how effective they are, and it’s for good reason, a tiered commission structure is incredibly powerful. That being said… It’s not powerful if implemented without the proper consideration. Here are a few things to consider before diving in.

  • Alignment of your costs.
    What I mean by that is, your first tier should be set up to cover the cost of the salesperson.
  • Boost up rapidly.
    Once you’ve hit the point of profitability, don’t ease your way up. Escalate their commission significantly. This ensures the salesperson is highly incentivized to break past the first tier and aligns your profits to their income.
  • Never delay the sale.
    I’ve seen this a lot. I’ll analyze a company, and find out that they’re system is actually encouraging salespeople to hold off on their sales until the next month in order to hit a higher commission rate. Do the math, and pay attention, don’t let this happen to you.
  • Move targets to motivate.
    A comprehensive incentive program gives sales people long and short term goals to work towards, like quarterly and yearly. But beyond those, you need to mix up the plan often, focusing on target products and seasonal pushes. This lets you align your profit needs to the commission plan and allows you to creatively raise and lower the overall compensation to maintain your profits while maintaining motivation on specific targets.

4. Cultivate a Feeling of Ownership

Incentivizing all staff is not the only way to get results. Not everyone in your company is completely motivated by money. But everyone wants to have their voices heard. Create open forums of communication. Show them their ideas being implemented in the company. The main idea is that if everyone is motivated to lead customers to solutions, it lends itself to feeling a sense of ownership. Every employee knows that their fate is tied to the company. The key is to remind them that the company’s’ fate is in the hands of the employees. Inspire pride, honor them, and they’ll fight tooth and nail for the well-being of your company, or should I say, their company.

Greg Davis
Greg Davis
Written by
Founder and CEO of Dolphin Consulting and best-selling business author.