3. Journal Article Overview
Breaking the Sales Force Incentive Addiction: A
Balanced Approach to Sales Force Effectiveness
• Authors: Zoltners, Andris A.; Sinha, Prabhakant; Lorimer,
Sally E.
• Source: Journal of Personal Selling & Sales
Management;Spring2012, Vol. 32 Issue 2, p171-186
4. Journal Article Overview Cont.
Incentives (LSTI)
• Often relied upon too heavily by management for
• Motivation
• Production
• Structure
• Retention
• Currently approx. 40% of salesforce pay is made up
by incentives
Sales Force Drivers (SFE)
• Managers Teach
• Skills
• Capabilities
• Values
• Motivation
5. LARGE SHORT-TERM INDIVIDUAL (LSTI)
Pros:
• Works great for highly
motivated Salesmen
• More independent workplace
• Keeps costs inline with
revenue
Cons:
• Negative short term client
relationship
• Minimal prospecting
• Overstocking
Pros:
• Creates a positive work
environment
• Longer tenure with employees
• Better Client service
Cons:
• Long Term investment by
management
• Requires patience
SFE DRIVERS
Incentives vs. Knowledge
6. 3 choices:
• Individual Based
• Team Based
• Mixed individual and
team based
84.6% wanted the
INDIVIDUAL system
• Shows that Incentive
systems do NOT build a team
environment
Incentive Survey
7. PrimeTime Premium Popcorn Extra
Butter
• Competition
• Every Box Costs $23.00
Incentives Activity
ACT II Butter Lovers
• Every Box Costs $23.00
• For every Box sold you receive $15
8. PrimeTime Premium Popcorn Extra Butter
• Bags burn
• 150 Calories
• Bad customer service
Incentives Activity
ACT II Butter Lovers
• Twice as many kernels as competitors
• Has more butter than ever
• 120 Calories
• 20 year Account Executives
9. Incentives: • Do not help drive sales
• Can leave salesman seeming cold
and unknowing
What we learned
Knowledge
based
Programs:
• Create easy selling environments
• Help create relationships with clients
• Increase revenue
10. Knowledge is Power
Building Strong Training
Program mixed with
talented salesmen
Strong business
structure than
encourages teaching
and coaching
Revenue grows
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Short Term Goals vs. Long Term
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Business Models throughout a year
SFE LSTI
12. Summary
• Incentives are good
• In small doses
• When training is done
well and often
• When coaching occurs
daily/weekly/monthly
• A good workplace
environment
• Designed to focus on skill
improvement in lacking
areas
• Tailored to each
salesman/sales team
• Incentives are bad
• When they are the main
focus
• Are part of a new sales
team
• Comprise most of the
payment to sales staff
• Are short term
focused/lack vision
Coaching/
Training
Limited
Incentive
System
Successful
Sales
Team
13. Incentives are not the
answer by themselves
Knowledge, training
and relationship
building
