Sales Recognition

Motivating sales reps and The Coin-Operated Myth

Old-school sales culture tells us sales reps are coin-operated. Movies like Glengarry Glen Ross show sellers as money-hungry and status-obsessed. Sales blogs gush about the virtues of cash bonuses. And you’ve probably seen your own team members get excited about the commission they’ll make on their next deal as a proper way to motivate sales reps.

But the narrative of the coin-operated seller is a dangerous myth, and you—as a sales leader—may be losing more than you think when you adopt this mindset.

Why is the myth of the coin-operated sales rep so widespread? 

Why is the idea of the coin-operated seller so deeply embedded into sales culture? It’s tough to pinpoint the exact cause, but here are a few possible explanations:

The status quo is age-old. 

The coin-operated mindset was established in the 1920s in response to the rise of car and appliance manufacturing. During this time, corporations professionalized the sales role by setting quotas, granting cash bonuses, and inducting top performers into elite clubs.

Not much has changed since then—sales leaders still rely on quotas, cash, and elite clubs to motivate sellers. And many continue to take an “if it ain’t broke, don’t fix it” attitude toward this decades-old approach. 

Cash is simple. 

Let’s be honest. The main reason why cash remains the primary motivating tool for sales leaders is because it’s easy.

It’s easier to assign a quantitative value to a seller’s work than it is to understand the intangibles of what motivates them, what makes them feel fulfilled. It’s easier to take a one-size-fits-all approach than it is to take a personalized approach. It’s easier to deposit a cash bonus than it is to think of a thoughtful sales incentive program. 

Primal instincts are at play. 

Another reason the coin-operated mindset is so popular is because it plays on our most primal human instincts—the scarcity mindset, which is a mental shift that happens due to the perception of scarce resources.

The scarcity mindset used to be an evolutionary advantage because it created a sense of urgency around acquiring essential resources like food, shelter, and water. But this mindset doesn’t serve people in the modern workplace. Today’s employees want psychological safety (the most important dynamic on high-performing teams) and belonging—and the sense that they all have the opportunity to succeed in their jobs. 

Despite this, many sales cultures—whether intentionally or unintentionally—continue to create a scarcity mindset in their sellers.

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What you’re losing by treating salespeople as coin-operated. 

Sales reps love cash, so what’s the big deal with treating them as coin-operated? Well, for the same reasons you’re probably reading this article:

  • Sellers lose steam and become under-motivated
  • Sellers burn out and under-perform
  • Sales teams have a retention problem 

The average sales turnover rate is 35%, compared to an average turnover rate for all industries of 13%. But even when sellers stay, you’re losing more than you might think by treating them as coin-operated.

What motivates sales representatives, and what doesn’t. 

Like I mentioned before, treating sellers as coin-operated triggers a scarcity mindset. And this approach can work—but not for very long. 

When sellers have a scarcity mindset, they’re not operating from a place of true motivation—they’re operating from a place of fear.  Fear that they won’t perform well. Fear that they won’t be able to provide for their family. Fear that they don’t offer value. And fear can only fuel performance for so long before sales reps become burned out, resentful, and demotivated—the opposite effect you’re trying to achieve.

In a recent study of sales professionals, 67% reported that they were close to experiencing burnout. More telling are the responses of these sellers when discussing the state of sales culture. According to one anonymous respondent:

“Current state of things at my company: we were recently told that any rep who hits their monthly quota would get [an incentive]. The problem is only 2-3 people out of 27 hit their quota last month. When quota is not attainable these types of incentives don't motivate people any more than if they weren't there.”

Research also shows cash isn’t effective as a motivation tool, especially compared to non-cash rewards. The latter are meaningful luxuries that people won’t normally justify buying for themselves. Cash, on the other hand, doesn’t carry that significance and is easy to use for utilitarian purposes like paying the bills or buying groceries.

So what does motivate sale reps? Sales incentives that never get predictable or feel stale. And working towards a reward that is most meaningful for them––and their family and friends––is key. Experiences are the only employee rewards that create shared anticipation and buy-in from a sales rep’s loved ones (who are excited to share in the reward, too). If tickets for the whole family to an amusement park or a vacation are on the line, sales team members are more likely to be motivated to perform (and win). Plus, people can win multiple times in a row, and be rewarded with something new every time.

You’re limiting sales performance. 

You want a team of top performers. When motivating your sales agents who close multi-million dollar deals, think of fresh approaches to finding customers, and work collaboratively with the rest of the organization. But here’s the hard truth: If you treat sales reps as coin-operated, they’re going to act coin-operated. 

Why? A cash-focused relationship is transactional. And your sales rep will feel little pull to go above-and-beyond in their jobs once the “magic” of their first cash bonus has worn off. 

So if you want top-performing sellers, it may be time to rethink the sales role. The most cutting-edge organizations are changing the sales process to be more consultative, creative, and focused on problem-solving—not just about hard selling.  

If you’re not convinced that this mindset shift will boost performance, look at companies like Culture Amp that take a non-conventional approach to their sales compensation. Here’s what their co-founder had to say about their decision not to use a commission-based model:

“Our engineers, psychologists, finance team and HR folk care about things like working on something meaningful, being part of something and being masters of their craft...Yet when it comes to salespeople, we think they follow fundamentally different rules and are more or less "coin-operated." What we've witnessed is that if our sales team is: working on something meaningful; working on that meaningful thing with teammates (we have small cross-functional teams); and given the opportunity to further their craft while doing it (we train together a lot) then this will drive sustained motivation.”

Culture Amp achieved “unicorn” status earlier this year with a $2B valuation.

Sales culture remains stagnant. 

It’s no secret that sales cultures can be notoriously toxic. A study found that  43% of sales reps believe they work in a toxic environment. 

You could be an incredible leader, but this alone won’t override the harmful effects of a culture that treats sellers as coin-operated. Directly or indirectly, this mindset leads to unhealthy competition, constant pressure to perform, and a lack of attention to the individual seller’s wants and needs. And this is bad for business. 

Toxic cultures eat into much of the hard-earned revenue your sales reps bring into the organization. Turnover due to cultural problems may have cost organizations as much as $223 billion over the past five years. Similarly, losing just one sales rep can cost an additional $115,000—not to mention it can potentially jeopardize the millions of dollars you have in your active pipeline. 

Unfortunately, this cultural problem runs very deep. And it will only continue until sales leaders start to make changes within their own teams and focus on what is motivating their sales representatives.

Connect with us to learn more about how to truly inspire and motivate your sales reps.

It's time to disrupt the sales motivation status quo. 

If and when we decide to treat and motivate sales reps as individuals with unique wants, needs, and motivations—rather than coin-operated machines—we’ll see sustained motivation, higher performance, and a stronger culture.

If you’re not sure how to take the first step to shift your mindset, start with a conversation on how to motivate your sales team. Open up a dialogue with your sellers to understand what drives them at work, what makes them happy, and what inspires them to get out of bed every morning. They may say it’s to make money. But don’t stop there—dig deeper. You may be surprised by what you learn. 

Eventually, you can look for opportunities to apply what you learn and experiment with new incentives that deliver on their motivations.

Change doesn’t happen overnight. The problems that sales teams face are age-old and deeply entrenched. But start with this one thing—challenging the narrative of the coin-operated sales rep—and we might start seeing the culture shift in a better direction.

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