Managing the Sales Force 307
away from home, frequently lack the authority to do what is necessary to win an
account, and sometimes lose large orders they have worked hard to obtain. Most peo-
ple, moreover, require incentives, such as financial gain or social recognition, to oper-
ate at full capacity.
Studying sales rep motivation, Churchill, Ford, and Walker developed a model
indicating that the higher the salesperson’s motivation, the greater his or her effort.^22
Greater effort will lead to greater performance, greater performance will lead to
greater rewards, greater rewards will lead to greater satisfaction, and greater satisfac-
tion will reinforce motivation. The model thus implies that sales managers must be
able to convince salespeople that (1)They can sell more by working harder or by being
trained to work smarter,and (2)the rewards for better performance are worth the extra effort.
According to this research, the most-valued reward was pay, followed by promo-
tion, personal growth, and sense of accomplishment. The least-valued rewards were
liking and respect, security, and recognition. Thus, salespeople seem highly motivated
by pay and the chance to get ahead and satisfy their intrinsic needs, and less motivated
by compliments and security. The researchers also found that the importance of moti-
vators varied with demographic characteristics. Financial rewards were mostly valued
by older, longer-tenured people and those who had large families, while higher-order
rewards such as recognition were more valued by young salespeople who were unmar-
ried or had small families and usually more formal education. However, motivators
can vary across countries. Whereas money is the number-one motivator of 37 percent
of U.S. salespeople, only 20 percent of salespeople in Canada feel the same way.
Salespeople in Australia and New Zealand were the least motivated by a fat paycheck.^23
Sales Quotas
Many companies set sales quotas prescribing what reps should sell during the year.
Quotas can be set on dollar sales, unit volume, margin, selling effort or activity, and
product type. After setting quotas, management often ties salesperson compensation
to degree of quota fulfillment.
Sales quotas are developed from the annual marketing plan. As described in
Chapter 3, management first prepares a sales forecast, which becomes the basis for
planning production, workforce size, and financial requirements. Then the firm can
establish sales quotas for regions and territories, often setting the total of all quotas
higher than the sales forecast to encourage managers and salespeople to perform at
their best level. If they fail to make their quotas, the company nevertheless might make
its sales forecast.
In turn, each area sales manager divides that area’s quota to arrive at an individ-
ual quota for each sales rep. A common approach to individual quotas is to set the
individual rep’s quota at least equal to the person’s previous year’s sales plus some frac-
tion of the difference between area sales potential and previous year’s sales. The more
the rep reacts favorably to pressure, the higher the fraction should be.
Supplementary Motivators
Companies use additional motivators to stimulate sales force effort. One motivator is
the periodic sales meeting,a social occasion that also serves as an important tool for
education, communication, and motivation. Many companies sponsor sales conteststo
spur the sales force to a special selling effort above what is normally expected. The
contest should present a reasonable opportunity for enough salespeople to win. At
IBM, about 70 percent of the sales force qualifies for the 100 percent Club; the reward
is a 3-day trip capped off by a recognition dinner and a special pin.