Five Reasons Why Sales Incentives Cannot Replace Sales Management

For many organizations and their sales managers, the Sales Compensation plan is seen as an important tool, if not the only tool, necessary to motivate your sales team, so you may not wish to read the rest of this article to discover “Fve reasons why sales incentives cannot replace sales management”. On the other hand…

The Sales Compensation plancan create excitement, bonding and in-house friendly camaraderie, developing further incentives and encouragement to lead your sales team to achieve profitable outcomes for all concerned.

If your organization is using a Sales Compensation plan to manipulate sales people, you’ll already see how it can drive and lead your sales team to certain directions and behaviours, some that may be beneficial, others that can be totally devastating and disastrous.

So how succesful is a Sales Compensation plan in managing your sales team?

Since, in the business world, success is judged by money, such as share and stock values, capital assets and profit, a Sales Compensation plan translates this notion of money as being a driving force for the success of your sales team, and even the dream of a fast car, huge house and luxurious yacht.

You may also consider annual bonuses as incentives for your sales team, bringing excitement, and perhaps some friendly in-house rivalry, believing that the focus for the sales team is how much their bank balance will increase each month.

On that basis, a typical sales manager may offer extra money to the sales people to perform a certain task, most likely believing they will chase those illusive additional sales, keeping the company happy by performing this new task, and being appropriately rewarded.

At the end of each week or month the sales team can tally up the scoreboard, quickly see who has achieved which targets, making a big fuss by rewarding the top salesperson with and additional bonus. And hopefully this action will be enough incentive to encourage others in the team to claim the number one spot in the following month.

To the casual observer, everything on the surface in respect of the sales team seems rosy. In the real world of sales teams, and it’s not about the “order” sales manager gives, but the direction that will be implied via the incentives scheme that is the underlying motivation. In many, if not most instances, a sales person will not perform a task unless there is at least some sort of financial incentive (personal benefit) behind it.

While money makes the world go around, financial incentives and rewards do not instantly create a strong sales team.

No matter how efficient, how experienced, or how motivated, even the best salespeople in the world cannot achieve success on their own, just as any successful entreprenuer cannot succeed on their own. It is always a team effort, for any organisation, though in many cases the sales perosn feels they are left vulnerable, and not understood by the very organisation they are working for.

More often than not, a problem that organizations may face is the use of the incentives plan as a sole management tool. This may happen accidently, through givng the sales manager too many hats, or may be a deliberate policy in an attempt to cut costs.

Anyone who has been around efficient and productive sales teams understands that the incentives plan cannot replace the sales management. It shall always stay as a supporting tool in the Sales Manager’s portfolio.

Here are five reasons why of the incentives plan cannot replace Sales Management:

1. It’s all well and good to offer an all expenses paid trip to Disney land as an incentive to your Sales people, but without the backup from the rest of your organisation, the chances of the trip ever happening will be pretty slim.

Sales performance is a team effort, starting at marketing and advertising, both on and offline lead generation, to supply of the product and services, through to technical and administrative support, invoicing and a stack of other variables. Any break in the chain can be disastrous and have a far reaching to the sales funnel as well as affecting the attitudes of the salespeople themselves.

2. There’s a fine line in the relationship between the sales staff, the sales money and sales management. When the going gets good everything is smooth sailing. But when a storm erupts, the tough get going but the weak may drown, because all three should be well in balance.

If individuals within and/or the whole sales team are having challenges for whatever reason, a great sales manager who successfully manages his people will have the wisdom and experience to cut through the excuses, ascertain the core problems.

Just as customers, ultimately, are people, so are the sales team, and it is the handling of that team for which the sales manger merits finacial reward. Having a team without a coach and a manager is a recipe for disaster in any arena.

The sales manager is there to work through heated emotions from both customers and  the sales team, and find mutually beneficial solutions, that are very often not at all related to the Sales Incentive program.

3. Your Financial Controller can play around with a budget, suggest an incentives scheme that will most of the times motivate the final result of a performance which is the new sales $ revenues one brings or the new client that has signed.

He can create all sorts of mathematical algorithms, spreadsheets and formulas, but without the human input, they are all meaningless. And until salespeople and customers are replaced by computers, incentives scheme are only as good as the sales team. And like any team, they are only as good as the manager and sales management process, which leads to the next point.

4. Sales management starts with identifying the qualities of the best players, such as talent and ambition, and many other necessaryconsiderations, and then recuiting the best people for the positions. And then there’s the sales training, the coaching, and motivating of the sales team, none of which can be achieved simply by having the most attractive sales incentives scheme on the planet.
5. If you ar constantly on the road as a Sales represnative, you’ll know it can seem a lonely world, and if your only source of motivation is an incentives scheme, you’d be one of the very few success stories.We all like to be part of a tribe, or community, and have a network of support and encouragement, someone to bounce ideas off, and sometines someone else to team up with to play good cop/bad cop. Your sales manager should be an integral part of your sales team, to be there as a shoulder to cry on, aomeone to laugh and celebrate with, someone to bat for you when dealing with the Management team or with difficult customers.

And nothing much has changed in many respects, from the days that Phineas Taylor Bannum, who’s book, “The Art of Money Getting: Golden Rules for Making Money”first published in 1880, wrote:

“Whatever is worth doing at all, is worth doing well.” Many a man acquires a fortune by doing his business thoroughly, while his neighbor remains poor for life, because he only half does it. Ambition, energy, industry, perseverance, are indispensable requisites for success in business. Fortune always favors the brave, and never helps a man who does not help himself.”

Ask any successful and great salesperson, and they’ll tell you this one truth. It’s not just about the money. It’s about have a sense of purpose, the challenge, caring about their customers, having an interst in other people, and a stack of other reasons. Yet, at the end of the day, they still like the benefits and priviledges of being a great salesperson, which an incentive scheme can not always satisfy.