What makes the salesmen tick and make them boldly go where no salesmen have gone before? (And make huge profit from it.) Can we classify without mistake the salesmen in different categories? Can we develop a matrix were we can put in the variables and in the end we will have the solution to every sales problems? What if money it’s simply not enough, in some cases? After what point do the incentives start working against the salesmen and the employer? In this research, conducted on a test group of 150 salesmen for a period of 12 months, a Business Sales Department on a major multinational telecom company, spread all around Romania, we will try to find answers to some of these questions. The challenge: understand the mechanics of sales force motivation and sales force incentives, and of course, how they interact. There are “two sides of the story” - two objectives. The first goal was to increase sales on a product that did not sell very well (interesting for the telecom company), and the second objective was to understand what happens to a group of 150 salesmen when faced to different methods of motivation (interesting for us).sales force, motivation, telecom companies, management.

Costin DAMASARU

Cristina ANDREESCU (MANOLACHE)

Radu CAMENITA

English

Research Papers in Economics

Review of International Comparative Management                              Special Number 1/2011  261 
 
HOW CAN WE INCREASE SALES FORCE 
MOTIVATION? PRACTICAL APPROACH: 
STIMULATING MOTIVATION ON A TELECOM 
COMPANIES’ SALES FORCE. 
 
Costin DAMASARU 
Radu CAMENITA 
Cristina ANDREESCU (MANOLACHE) 
The Bucharest Academy of Economic Studies, Romania 
 
 
First step: What is Motivation? 
 
“Motivation of a company sales force is crucial to the marketing success of 
many  products”  Coughlan&Narasimhan  (1992)  [2].  In  order  to  hope  obtaining 
success in sales, one must first deal with a very important issue: Motivation.  
Motivation can make in many cases the difference between a very good salesmen 
with  very  good  perspectives,  incredible  customer  relations  manager  and  a  poor 
salesmen with no perspectives none so ever. Zero percent customers oriented. In 
economic terms that translates into profit or loss, money for the shareholders or the 
“we will have to let you go “routine”. 
Imagine  your  self-running  a  team  of  highly  motivated  people  working 
together and delivering results. Now imagine a team made out of bored salesmen 
that you, as a manager, think nothing will ever make them happy about their work, 
ever again. What will you do, to turn the second team into a highly successful 
ABSTRACT 
  What makes the salesmen tick and make them boldly go where no salesmen 
have gone before? (And make huge profit from it.) 
  Can we classify without mistake the salesmen in different categories? 
  Can we develop a matrix were we can put in the variables and in the end we 
will have the solution to every sales problems? 
  What if money it’s simply not enough, in some cases? 
  After what point do the incentives start working against the salesmen and the 
employer?  
  In this research, conducted on a test group of 150 salesmen for a period of 12 
months,  a  Business  Sales  Department  on  a  major  multinational  telecom  company, 
spread all around Romania, we will try to find answers to some of these questions. 
  The challenge: understand the mechanics of sales force motivation and sales 
force incentives, and of course, how they interact. There are “two sides of the story” - 
two objectives. The first goal was to increase sales on a product that did not sell very 
well (interesting for the telecom company), and the second objective was to understand 
what  happens  to  a  group  of  150  salesmen  when  faced  to  different  methods  of 
motivation (interesting for us). 
   Special Number 1/2011                                 Review of International Comparative Management  262 
example of “target destroyers”? The answer is quite simple and complex at the 
same time. 
Make them really interested in what they do. That was easy.  
Now, the real question is HOW can you make them involved? 
 
It is well known that salesmen experience three broad outcomes on the job 
i) feelings about the self-self esteem , ii) actual peformance : sales achieved + new 
business  generated,  iii)  evaluations  about  specific  dimensions  of  the  work 
situations – job satisfaction ( Bagozzi, 1980) [11]. 
The concept of motivation refers to internal factors that impel action and to 
external factors hat can act as inducements to action. The three aspects of action 
that motivation  can affect are  direction (choice), intensity  (effort), and  duration 
(persistence), Locke& Source (2004) [7]. That means that you have to help them 
chose to be involved (give them a direction), then support them in increasing the 
intensity of the task that they are performing and last but not least encourage them 
in keeping the intensity for a long period of time. 
All the statements mentioned above are true but they will be incomplete if we don’t 
take into account the other 3 major variables that come in place when researching 
about motivation: Intrinsic Motivation, Extrinsic Motivation Perceived Abilities. 
Intrinsic motivation is the “force” within us that we were born with. 
Extrinsic  motivation  is  the  motivation  inducted  by  society  and  our  life 
experiences. When the intrinsic motivation comes in conflict with the extrinsic one 
all bad things can happen, such as failure, the feeling that even tough we achieved 
our goals we are not happy. Perceived abilities are those actions that, as proved in 
past different events, we are very good at performing them, activities that gives us 
self confidence because we know how to them in a very efficient way. These three 
terms will be very useful when developing and conducting our small experiment. 
 
Second step: Motivation and incentives. How and for how long do they 
get along? 
 
As  Benabou  and  Tirole  (2003)  [12]  said:  “there  is  no  doubt  that  the 
benefits of piece-rate systems or pay-for-performance devices can be considerably 
compromised  when the systems undermine  workers intrinsic  motivation”. So, a 
reward (extrinsic motivation) is as good as the benefits that it brings. 
On the short term it can boost up salesmen results, but on the long term it 
can have serious “side effects”, such as lack of interest on doing the job with no 
additional motivation but the intrinsic one (doing the job because it’s “the right 
thing to do”). For this matter is very important to mention Condry and Chambers 
(1978,  p.  66)  [6]  who  stipulate  that  "rewards  often  distract  attention  from  the 
process of task activity to the product of getting a reward". 
The psychologists are in favor of a more dramatic idea that “the subject 
finds the task less attractive when offered a reward”. This may be true up to one 
point but, more than that, if you offer a reward to a subject this may trigger a Review of International Comparative Management                              Special Number 1/2011  263 
“Santa Claus effect”. This means that the subject will invariably expect the reward 
on a regular basis, just because it happened once or twice. Even more, the subject 
will have the impression that it’s entitled in receiving the reward even if nothing 
out of the ordinary happened to justify this bonus. Plus, just like in the case of 
small children waiting for Santa, employees will feel betrayed if they don’t receive 
their  “presents”  (in  the  shape,  amount  and  form  that  they  require)  and  act 
accordingly,  showing  their  anger  by  rejecting  authority,  taking  actions  in  some 
cases” to punish” those found guilty of this situation (direct superior manager). 
Kreps  (1997)  [8]  stipulates  that  if  an  employee  performs  some  act, 
undertakes some effort without the spur of some extrinsic incentives, he looks for 
rationales  that  justify  his  actions,  and  also  he  will  rationalize  his  efforts  as 
reflecting his enjoyment of the task, and for that matter, since he enjoys it, will 
work  harder  at  it.  But  Kreps  (1997)  also  states  that  if  extrinsic  incentives  are 
brought  into  “the  game“,  the  employee  will  “attribute  his  efforts  to  those 
incentives, developing a distaste for the required effort”. So, what Kreps is trying 
to say is that in some cases incentives can really disrupt the natural flow of a sales 
process, going by the motto “if it’s not broke don’t fix it”. 
In all of this cases, where the subject benefits from the incentive (reward, 
extrinsic motivation) and after the incentive it’s over, is no longer motivated to do 
his job properly, but instead waits for another incentive is called “the magic pill 
effect“. Incentives can create some sort of “addiction“ and just like in the real ones, 
can have serious effect on the level of motivation in personal and professional life. 
In  the  experiment  described  in  these  papers  we  tried  to  anticipate  and 
prevent this type of side effect. If we succeeded or not it’s not really important, but 
the data obtained is truly important for future research on this matter. 
One of the most important tools of extrinsic motivation is the sales contest. 
As defined by Churchill (1993) [5], sales contests are short-term incentive 
program used by companies to increase sales volumes. We fully agree with this 
statement  but  with  only  one  exception:  sales  contests  can  take  part  even  on  a 
medium term, in this case the main contest being developed with the support of 
smaller incentives, linked together to form a  “super (medium term) incentive”. 
  The  sales  contests  are  classified  by  Karla  and  Shi  (2001)[1]  in  three 
formats. 
i)  Rank Order Tournament – many winners and the amount of reward is 
based on relative rank achieved, with larger amounts awarded to higher 
ranks. 
ii)  Rank Order Tournament with Multiple-Winners format – the reward is 
share equally  
iii)  Rank Order Tournament with Winner-Take-It-all format  
  Every  one  of  these  formats  can  satisfy  a  certain  need.  As  shown  by 
Kalra&Shi, the format used depends on many variables such as risk averse, optimal 
number of salesmen, duration of the contest, budget allocated for the incentive, 
sales uncertainty, logistic distribution.   Special Number 1/2011                                 Review of International Comparative Management  264 
  Churchill (1993) also defined an extra type of contest where salesmen earn 
awards  for  achieving  or  exceeding  specific  targets,  and  so  competing  with 
themselves. Lazear and Rosen (1981) [09] state that contests are equal to piece 
rates  in  some  defined  conditions,  when  salesmen  are  risk  neutral.  But  when  a 
situation where less money are spent on monitoring ranks rather than individual 
results, Lazear (1989)[10] argue that contests may dominate piece rates (salary, 
commissions , quota-based compensation). 
 
  Third Step: The Experiment  
 
  “Sales  force  management
1  is  frequently  confronted  with  strategy  issues 
involving the structure and size of the sales force and the deployment of total sales 
effort  by  product  and  market  segments.  These  issues  are  closely  related,  and 
generally  have  to  be  evaluate  simultaneously.”  Rangaswamy,  Sinha, 
Zoltners(1990)[3]. 
  The plan behind this experiment it’s quite easy to follow, as we believe 
“keep it simple”. So, our goals were: to motivate a major multinational telecom 
company’s sales team, made up of 150 salesmen, distributed on 5 geographical 
regions, to sell better and in larger amounts, an added value product, called product 
X. The second aim was a scientifically one, as in this process of motivating the 
team we would gather very important info about all the questions mentioned in the 
abstract of this paper. We had 12 months to prove that we can increase sales by 
1000%, from 30 pieces/months to 330 pieces/month. Extra, we wanted to create a 
MATRIX. 
  What did we do? We started with making a short, medium and long term 
plan. 
  The  short  term  plan  (month  1  -  month  5)  -  boosting  up  sales  up  to  
210 pieces/month. 
  Medium  term  plan  (month  6  -  month  9)  -  increase  sales  up  to  
280 pieces/month and creating and sustaining a “sales rhythm” that salesman will 
follow. 
  Long  term  plan  (month  10  -  month12)  -  increase  sales  up  to  
330  pieces/month  and  keeping  the  sales  at  this  scale,  at  least  an  additional  
12 months, after the experiment was over .How to boost up sales up to 600% in  
5 months? Glad you asked. First of all, together with the managers, we classified 
all the 150 salesmen in 3 Hollywood categories .The classification was made after 
reviewing the sales results for the past 12 months and the direct managers feedback 
on every salesmen motivational level: 
a.  Top  Gun  –  Great  intrinsic  motivation  +  Great  perceived  abilities  
(10 salesmen) 
                                                        
1  Ceptureanu  Sebastian,  Ceptureanu  Eduard  -  Knowledge  management  and  innovation  issues  in 
Romanian  industrial  SMEs,  Sesiunea  ştiinţifică  internaţională,  “Afacerile  interne  şi  justiţia  în 
procesul integrării europene şi globalizării” – ediţia a III-a, Academia de poliţie “Alexandru Ioan 
Cuza”, Bucureşti, 13 – 14 mai 2010 Review of International Comparative Management                              Special Number 1/2011  265 
b.  Great Expectations – Medium Intrinsic Motivation + Medium perceived 
abilities (40 salesmen) 
c.  The  Age  of Innocence – Low Intrinsic Motivation + Low perceived 
abilities (100 salesmen). 
  Then for each category we developed a “motivational tool kit”. 
  For the first month, additional to all the “motivational kit” we set up a rule: 
every salesman must sell at least one piece of product X, and tell send feedback to 
the manager about their experience. 
  For Top Gun, the “kit” had two components. Special advanced trainings on 
the product X + a special incentive .The incentive was meant to motivate the TG 
salesmen in competing against themselves. Starting with month 1 when they would 
have to sell a minimum amount of pieces/month and until month 4 they needed to 
have a constant increase in sales, compared to the month before, every month. The 
prize was an extra salary, every month for which the scheme worked. 
  For  the  Great  Expectations  salesmen,  “the  kit  “had  –  a  sales  technique 
training + a training on product X + a Winner Takes it All Incentive (month 1 till 
month  4),  the  reward  being  an  extra  salary  every  month.  The  incentive  was 
structured in s smaller incentives, each for every sales region. So, the salesmen 
from one region will have to compete with the colleagues from the same region, 
and only with them. 
]  For the “Innocent” ones, we prepared an “extra treatment” consisting of: a 
basic  sales  technique  training  on  product  X,  coaching  from  the  TG  salesmen, 
double  visits  at the  clients  with  the  TG  salesmen,  and  an  Winner-Takes  It  All 
Incentive, but this time at a national level)(the salesmen compete for a prize with 
all the salesmen from all the regions). The results were easy to predict .We had the 
increase desired after 5 months and now the trick was to keep the sales at this value 
and still grows. So, we put in place the medium term plan. The plan was to create 
the rhythm and convince people to follow it and sell the product “naturally” using 
intrinsic motivation without the help of any extrinsic incentive.  
  After the incentive was over we feared that the “magic pill effect” was 
going take over, so what we did was a scheme that we called “fast an furious”. That 
meant that there will be incentives lasting only one day, but to qualify you had to 
have  a  minimum  sales  achievement  until  that  day.  We  doubled  the  “fast  and 
furious” technique with a special rule. Everyone must sell at least one piece of 
product  X  and  send  feedback  about  their  experience.  The  results  were  pretty 
interesting in a sense that 86% of the salesmen saw a difference in the way that 
they perceived the sale process of that product, becoming more aware of every part 
of this process and doing so they began to understand where they did wrong and 
how to fix that problem. The medium term plan after having a decrease in sales 
(month 6 - 7) achieved his goal of giving salesmen the intrinsic motivation and 
things started to work naturally. The target for the long term plan was achieved 
only in the last month. The strategies in the long term was try giving the salesmen a 
view on their perceived abilities that they discovered in the short an medium term   Special Number 1/2011                                 Review of International Comparative Management  266 
plan and to encourage them to develop those abilities by “practicing “ selling this 
product. 
  The Matrix theory states that, we can use this experiment for any giving 
product. 
  The results will definitely not be the same but the important thing is to try 
and understand why that happened and what can we do to fix it.  
  In the TG the results were what we expected (a total increase by 230%), in 
the GA the salesmen had an increase of 200% increase but then, in the medium 
term plan the lost interest. Only after the TG guys talk coached them we saw an 
increase in the sales. The Innocent guys, who were our main focus point, developed 
some  interesting  characteristics.  After  the  motivational  kit  started  we  saw  an 
increase in their interest fore new info. The sales results were not a reason for joy 
but in the medium term plan we saw a great increase in the sales and in the long 
term plan these salesmen were the ones who we can say were the true success 
story. 
  The  actual  detailed  plan  of  this  experiment  as  well  with  all  the  data 
gathered will be presented in the next paper. 
 
  References 
 
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How Can We Increase Sales Force Motivation? Practical Approach: Stimulating Motivation on a Telecom Companies` Sales Force

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How Can We Increase Sales Force Motivation? Practical Approach: Stimulating Motivation on a Telecom Companies` Sales Force

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