Why Sales Hires Fail 75% of the Time–Within the First Year
How money does not incentivize sales
PHOTO CREDIT: Getty Images
Simon Sinek says the following: "Offer someone the opportunity to rebuild a company or reinvent an industry as the primary incentive, and it will attract those drawn to the challenge first and the money second."
I believe much of what is expressed about incentivizing the salesman emanates from underestimation, condescension and even contempt for that person and her profession.
I don't read sales books. They make me mad. From my own experience as an executive salesman, I believe most sales managers approach the whole subject of sales incentivization ass-backwards.
In my case, this judgment comes from being an unexpected, untrained and accidental success as an entrepreneur in elite sales outsourcing. My intent as a company founder was to build a happy life and create a community of peers who shared my values. While I wanted to make a comfortable living, money was not my business raison d'etre. And over the years I have managed to assemble a coterie of sales executives who, to one extent or another and in their variegated ways, were compadres in the realm of service, morals, humor and fierce independence.
After 20 years of sales success emanating from my personal sales intuition and longing to be part of an ethical sales and service community, I began to discover I was not as odd or alone in my approach as I had always assumed. And even more, there is an increasing body of scholarly research that supports the instincts of my life experience.
This is particularly true in the realm of sales incentivization. My core assumption has always been that good salespersons don't fundamentally work just for money. Rather, they work for satisfaction, service, happiness, a free life and other non-quantifiables as much as for money. Research has shown that, after reaching a threshold of $75,000 or so, money has limited ability to incentivize. (Note Conscious Capitalism and the Small Giants community).
Dr. Edward Deci, Director of the University of Rochester's Human Motivation Program says:
"When people say that money motivates, what they really mean is that money controls. And when It does, people become alienated--they give up some of their authenticity--and they push themselves to do what they think they must do." (Why We Do What We Do: Understanding Self-Motivation).
I have always felt that salesmen are particularly misunderstood. I'm told that sales hires fail 75% of the time within the first year. That is a phenomenal statistic. While the reasons for this are complex, I believe the overemphasis on monetary reward is a large part of it.
People want to be part of an organization that imbues quality and meaning to their lives. Yes, they need to make money, but I don't believe it ever activates their ardor and deep commitment. It does not inspire full use of their internal resources, their full being, their passion.
When I ran my executive sales outsourcing firm Corporate Rain International, I genuinely tried to start with the assumption that every person I hired should be better than me, that every person I hired could teach me something, that each person I hired could comfortably grow the extant values of my company as a corporate companion.
To quote Edward Deci again, "[In speaking about motivation] the proper question is not, 'How can people motivate others?' but rather, 'How can people create the conditions within which others will motivate themselves.'"
I agree. Thank you, Edward Deci.