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Sales Force Incentives

Thomas J. Steenburgh, University of Virginia Darden School of Business

On the sales force performance curve, there are laggards, core performers, and stars. The laggards need carrots and respond to short-term goals; quarterly bonuses help them most. Core performers account for 60-70% of the sales force. Multi-tiered prizes that keep them in the game motivate them best.  Stars are overachievers who try to surpass any target they are given. They do not want caps on their earnings and overachievement commission rates are the best motivators.  

The focus of the study is on laggards. It tests the impact of using social pressure in the form of a Man on the Bench program to boost sales and productivity. It was tested in a Fortune 500 company which had a supportive culture. The questions in the study were (1) Does the Man on the Bench program influence sales performance? ( 2) Does it motivate top performers, bottom performers, or both? (3) Does it impact team cohesion?

The Man on the Bench Program immediately increased performance, with no impact on the top performers and an increase of 10-12 points for bottom performers.  Additionally, strong social networks helped low performers improve.

Related Conference:

Marketing Resource Allocation: Moving from Analytics to Action

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