Are salespeople only motivated by money?
In the world today
everything is becoming more and more expensive by the day, inflation is the
cause of this. Even if you have a job sometimes the paycheck you are getting
are not going to be enough to cover your day to day life. If it did, then you
will be worrying about the future. Will it be enough to sustain your life for
the next the next decade or so. All this questions are being asked by workers
around the world.
This is an opportunity
for any firm in the world to encourage their sales person even more and to
maximize their efficiency and potential. There are lots of ways for firms to
encourage their sales person. There are pros and cons of different method. It
is all up to the culture and the mentality of each firm. For example some firm
prefer monetary incentives instead of promotion because it is a family run
business. They do not want the management team to be replaced by people outside
of the family. The next section of the report will talk about different kind of
incentives plan. What are their pros and cons and which plan is the best for
different kind of firms.
Incentive is just
another way of not just encouraging the current salesperson but also to retain
them in the company for an x number of years. Every firm wants to retain their
best sales person no matter what the circumstances is.
A
Monetary incentive is the most basic way to encourage a sales person. They are
the easiest and the most overused incentives. Almost every firm in the world
has a monetary incentive for their sales person. There are pros and cons from
this method, the pros are it is easy, simple and quick for the management team
to process and to implement.
Despite
all of the advantages of using Monetary incentives there are some drawbacks to
it. First monetary incentive can be used for corruption money. For example one
of the management members took some money from the firm’s profit and uses half
of it for bonuses and monetary incentives. But in fact the person might only
use half of it and he or she keep the other half. Monetary incentives can be
abused by one of the management members as a tool to corrupt the firm’s profit
for their own gain. In some countries such as Singapore Monetary incentive are
avoided since it can be suspected as a corruption and the penalty for
corruption is severe.
Another
drawback of monetary incentive is it only works on the initial stages of the
sales person career. The longer they stay in the industry their aspiration and
wants will change. Monetary incentive will eventually be changed to satisfy the
sales person. There are other ways beside monetary incentive, things such as
promotion or maybe free education. These things are actually more valuable to
the growing sales person than just monetary incentive. The next section will talk about the other
ways for encouraging sales person and what are their advantages and
disadvantages.
Other influencing Factors
Addressing Their Needs
The first step is to address the
needs of the sales person. That is the first step for the management team to
take. Different sales person have different needs. Therefore different kind of
incentives will work differently for them. Another thing that should influence
the sales person mentality and response is their culture. Therefore the
management should do a little research about the culture or the trend of the
community before implementing any incentive plan. This is very important
because the firm wants to efficiently spend their resources. What if the
incentive plan does not work? Then the resources that have been spent to
implement it will be wasted that is why it is crucial to get it right the first
time. In this report Singapore will be used as the guideline and examples
therefore all of the analysis are based on Singapore context including the
Geert Hofstede Cultural analysis.
Promotion
Promotion is another kind of incentive that
older sales person always looking for. Promotion is very important to them
because they want a bigger pay check. Older sales person usually have more
experience and they have a family. Therefore their current pay check maybe is
not enough to sustain his or her life with their family.
There are advantages to this type of
incentive; first of all it motivates the sales person to work harder. Secondly
it helps the management team to spot any potential on the sales person. He or
she will be a great asset to the firm if they have a great potential.
Education and Training
Education is very important to a
growing sales person. Salesperson looks at Education and training as a tool to
increase their earning and chances to get to the big time. But from the firm’s
point of view education and training should be like an investment. Treat the
incentives like a great investment, and the sales person potential is the
return you will get.
Monetary
is just one aspect that can encourage sales person. But as a human being they
have other wants and needs to live. Monetary incentive might be enough for them
in the beginning but as time goes things starting to change. They will have
families and more mouth to feed. Therefore Monetary incentive would not be
enough anymore. That is why monetary incentive will no longer be enough.
IPC (2006)
Benefits of incentive. http://www.incentivecentral.org/salespeople/salespeople.1863.html Articlesbase.
(Accessed: 7 February 2011)
Beginnersguide.com. (2010)
Are there potential
disadvantages to SFA?
http://www.beginnersguide.com/management/sales-force-automation/are-there-potential-disadvantages-to-sales-force-automation.php. Beginnersguide. (Accessed: 7 February 2011)
Dutta, K. (2006)
Top Ten Benefits of
SFA (SFA). http://ezinearticles.com/?Top-Ten-Benefits-of-Sales-Force-Automation-(SFA)&id=339798.
Ezinearticles. (Accessed: 7 February 2011)
Jobber. D,
Lancaster.G. (2009)
Selling and
Sales Management 8th Edition. Prentice Hall. Chapter 4: Sales
Settings.115
(Accessed: 7
February 2011)
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