Want higher numbers from your sales force? Try a little respect.
Lumber and building material dealers and distributors across the country are recognizing that making their reps feel they're valued and trusted members of the team is a better way to get the most out of their people than by offering prizes or punishment.
"Incentives don't always work," says Jordan Russin, vice president of Montgomery, N.Y.-based distributor Russin Lumber Corp. "When we've done them in the past, it's the same three or four [reps] who win, and they aren't necessarily the best salesperson, but the person who is prize- or contest-motivated."
"Incentives are a thing of the past for dealers," declares Chris Costello, president of Timberline Enterprises in Gloucester, Mass., "and from my point of view, counterproductive. Why should I give you an incentive for doing your job?"
"At McCoy's [Building Supply], it's not a carrot-and-stick approach at all," says Dan Stauffer, vice president, marketing and real estate, for the San Marcos, Texas-based dealer. "The relationship between the rep and McCoy's and to their customer goes ahead of any other incentive. We offer frankly very few spiffs and sales incentives. I can't think of the last time we did that.
"We want our outside sales reps to be motivated and be strong team members with McCoy's."
Sharing information on sales on a weekly basis is a key to good performance at Stine Lumber. "We meet every Thursday with inside and outside sales people," says David Bushnell, pro sales manager at the dealer's Lake Charles, La., branch. "We hand out call lists and look at what happened last week and those salespeople know their numbers."
If Bushnell sees a new sales rep having a tough time, he may have that rep ride with one of his seasoned salesmen, who provides a bit of mentoring.
"I will have one-on-one meetings with salesmen, too," he says. "I think it's important that they know where they stand at all times."
Research Findings What these dealers have discovered does not surprise Paul Marciano, president of Whiteboard, a human relations consulting firm in Flemington, N.J., and an authority on employee engagement and retention.
"We know from research that bonuses and incentives have a short-term impact on people and is actually a demotivator," he says. "What typically happens is that only certain members are compensated and the rest are left out."
The problem with using incentive programs to increase sales, Marciano says, is that you create a culture where employees feel like they should be paid extra to do their job. Even when an incentive program produces the desired result, that program is effective only as long as it is in place. End the program, and sales figures drop.
As far as Marciano is concerned, employers who ask how to motivate a sales force are asking the wrong question.
"We need to figure out how to instill pride and respect and engagement—that leads to super performance," he says. To Marciano, the issue of respect is fundamental and needs to be applied across the board. "You never hear someone say, 'I don't care about respect.' Obviously that passes on to the customer," he says. "And there are none of the disadvantages and costs associated with rewards programs."
Marciano developed a RESPECT model, based on the premise that relationships only work within the context of that basic moral value. How well employees function at their jobs depends on the extent to which they respect their organization, its leaders, their team members and their work, and the extent to which they feel respected. There are seven critical drivers that influence how employees assess respect, and how they subsequently perform their job, based on that internal assessment, he says.
Keep 'em Motivated Stauffer might not be able to reel off bullet points from a management model, but he sure knows the importance of supportive feedback.
"Sales reps need good feedback, and we give that to help keep them motivated and help them when they are falling off," he says. "Carrots and sticks tend to promote independence rather than interdependence, which is what we promote."
At McCoy's, sales reps are paid a percentage of the gross margin dollars, which is calculated quarterly based on the previous 12 months' sales figures. This is done on a rolling basis. "It helps our people better predict their own income," says Stauffer, and "we keep our salespeople informed and they track their own numbers."
In Massachusetts, Costello expects the best out of his employees, but more important, he creates a sales-oriented environment that he believes his reps can thrive in. That empowerment—giving salespeople the tools, resources and training they need to do the job—is an important driver in Marciano's model.
"When I look at most companies, they are driven by sales, operations or purchasing," says Costello. "If you are a company driven by operations, that's hard for a salesman to thrive in. If I need to load a truck at 4:30 a.m. to make a delivery to a customer who called at 4, that's a sales decision. An operations guy would say, 'Well, the morning is filled up, and the driver would be on overtime.' Or, 'We make more money selling this product than that product, but our customers like this product.'" That's a sales decision, he explains, and it's one of hundreds that gives reps the confidence they have a whole company behind them that will support them.
"That, from my perspective, is more important than any incentive program," Costello says.
The respect model is not without its costs, psychic and monetary. Creating a management system where respect flows both ways can be tough, especially where bosses are used to having the last word and reluctant to build relationships founded on trust. Respect also comes with a financial cost in terms of investing money to, say, build up your fleet in order to guarantee the on-time delivery your yard promises, says Costello.
"You have to put your money where your mouth is, or nobody is going to believe you," he says.
"The best thing we can do is give our salespeople the training they need, the tools to be successful, and let them know that what they promise the customer will be delivered," says Russin. "It is amazing to find that what's good for the owner is good for the company, and it travels down."
Driving Success Management consultant Paul Marciano believes it's respect, not incentives that can create an environment where sales reps—and their dealers—can thrive. If you're looking to steer your company forward and increase sales, try employing Marciano's seven drivers of RESPECT.
Recognition. Acknowledge and appreciate your salespeople for their contributions.
Empowerment. Provide your salespeople with the tools, resources and training to succeed. Give them autonomy and encourage them to take risks.
Supportive Feedback. Supply specific, timely feedback in a supportive, constructive manner—never to embarrass or punish.
Partnering. Collaborate with your salespeople to achieve common goals. Share information with members of the team and with other departments as necessary.
Expectations. Ensure that salespeople understand their goals, and how their performance will be evaluated. Make sure they know they will be held accountable for meeting their performance expectations.
Consideration. Be considerate and thoughtful toward one another.
Trust. Demonstrate trust and confidence in your salespeople's skills and abilities. Keep your promises.