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What Pecentage Increase Does It Take to Steal a Sales Rep From Your Competition?

Every time I think of sales reps, I think of Glengarry Glen Ross.  Always... Be... Closing.  Get them to sign on the line which is dotted.  Could it be that there is more to motivating sales reps than cash?

Ann Bares at Compensation Force has an interesting post up regarding the motivation of salesBaldwin_glengarry_glen_ross representatives.  Ann cites a recent Rewards of WorkSM (ROW) Study that points to the fact that sales reps may be motivated by more than just money.  Here are the details from the study:

The ROW Study found that sales employees, compared to non-sales employees, are:

  • More engaged (57% versus 51%)
  • More committed to their company (68% versus 62%)

And, of course,

  • More motivated by compensation (82% versus 62%)

Moreover, they have:

  • A greater sense of affiliation with their organization (67% versus 60%)
  • Higher career satisfaction (57% versus 52%), and
  • More trust in management (59% vs. 55%)

Interesting numbers, and Ann correctly points out that the data is worth pondering.  First up, Sales people ARE more motivated by money than your normal employee.   That's good to know.  I might have lost faith in the basic instincts of humanity if that were not the case...

More importantly, since sales reps put it on the line to sell your product/service everyday, they're more engaged, satisfied and committed to your company than other types of employees.   They also have a higher degree of affiliation with the company (and whatever brand you are selling as an employer) than other types of employees.

It's interesting data, and certainly contrary to the stereotype of the mercenary sales rep.  It's good to know that sales reps have all these positive attributes when it comes to engagement and affiliation. 

Here's the 64K question.  Look at the spreads noted above when comparing sales reps to all other types of employees.   The motivation of compensation still dominates the landscape, so what type of percentage increase will it take for the normal sales rep to give up the warm nest of affiliation and satisfaction for more money?

I'm guessing that number is 20+% if all other items (benefits, product, perks, etc.) are equal.

What's your number? 

Comments

Frank Giancola

Trouble is, in the real world, all other things are not equal. When you move to a new company, you usually lose ground on vacation, and your 401(k) match and health care coverage can be delayed. Equally, important, you have to re-establish your reputation for promotion consideration and with your customers. This is major risk.

Also, if you re-locate, you family is disrupted and you may incur moving costs.

The other primary consideration is how much you need more money.

But if all is "equal," I would say 10-20%.

Paul Hebert

To first go off topic and then come back to your question.

My first impression is that sales people typically have a very focused point of view on their business and they have information on how the company makes money, who the clients are and as a rule - spend all their time talking about how good the company is (in order to make the sale.)

All of that would drive the results the surveys show. A strong point of view and a constant rerunning of the benefits of the product/company can't help but make me feel better and more connected.

Internally, however, we typically don't know the big picture of the business but focus on our own little world, spend most of our time talking about what we need to do better (in other words our shortcomings) and therefore have a completely different reference with respect to the company.

I would submit that in companies that are transparent on the financials, link departmental activities to the bigger whole and communicate successes more often than failures - you would see results on par with the sales people in the survey.

Now your question - having been a sales person who entertained offers from competition multiple times (rejected them all) the two things I looked at were: length of contract and at least a 20% increase in income. Contract length was more important because the risk of not being able to sell to my past clients would reduce my effectiveness and income potential (and I wanted a safety net.) The 20% is pretty arbitrary since in sales it's what you sell that drives your income so that just provides the "rational" reason for leaving when you've made the emotional one.

Ann Bares

Great comments from Frank and Paul. I would echo their thoughts that the cash compensation component is just one slice in a bigger pie that includes other important elements both "hard" (i.e., perks, benefits, etc.) and "soft" (i.e., the salesperson's faith and trust in the company and the products/services it offers). And so, here comes the kind of qualified, "it depends" answer you should expect from a consultant :).

We learned in my post, via the results of the ROW study, that salespeople report greater levels of trust, satisfaction, engagement, commitment and affiliation - on average - than other employees. I think that the other elements of the employment relationship - particularly these "soft" elements - act to build a sort of cushion around the cash compensation package. To the extent that a salesperson feels a high degree of trust, commitment, affiliation and satisfaction with the employing company, I think it will probably take more than a 20% increase to buy them away from their current position. To the extent that the salesperson is feeling disengaged, dissatisfied, untrusting and less than committed to the company, that cushion is pretty thin and you might be able to lure them away with a mere 10% to 15% increase in cash.

So, I think your proposed benchmark of 20% is probably in the ballpark, Kris - but I think that the situation in real life is more complex and multi-faceted, and what it takes to buy away sales talent can vary quite a bit, accordingly.

Great post and thread!

Larry

I am a 10 years sales professional, and what causes me to stay is really the market I am selling into, if the market is hot and getting hotter, then the compensation will naturally increase as your sales increase. The key here is to not have to start over: prospecting, new relatuonships, etc. Keep in mind a huge myth is that just because you change companies, your clients will also, this happens in some industries more than ohers, but in large solution selling with 6-18 month implementaions, people will typically not switch because of a relationship with a sales person. If the market I was in was fading I would move to a more promising market for less money, because of the possible future upside, but I would never leave a growing industry for more money in a fading market. Sales people want to sell a product that makes good business sense, in a growing industry, for organizations that have little barriers for sales people to sell their products, give a sells person that with an equitable salary, and it will take more 20% to steal them.

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