The idea that money motivation doesn’t work in sales has become quite popular these days. Journalists, social scientists and others who have never worked in sales, or really in business at all have latched onto this seemingly noble idea about human beings. One TED talk in particular on the subject has gone viral with the lofty, high brow suggestion that for tasks with any complexity at all, human beings are too creative and sublime to be motivated by something as inelegant as cold, hard cash.

It sounds good, and makes us feel good when we hear it, but not only is it wrong, it is a gross over simplification, and a bad use of the science used to justify the point.

Let me give away the bottom line here – money does work to motivate people, but you have to do more than just dangle a carrot to see how high the rabbit will jump if you want to be successful with a creature as creative and sublime as a human being.

Many of the non-salespeople who profess the idea that money motivation doesn’t work for complex tasks refer to a variety of laboratory experiments where subjects are asked to complete a complex, creative task as fast as possible, Generally speaking, their times decreased when a cash incentive was offered. The conclusion then, was that money motivation doesn’t work for sales because sales is a complex and creative task.

There is a BIG missing piece here, let me illustrate the point with a joke:

So a guy asks his friend, “can you swim?”

The friend says “no”

The guy asks “what if I pay you?”

OK, not the funniest joke – but here is the point:

You can’t motivate someone to do something they don’t know how to do with just money, but you can motivate directed effort.

What do I mean by “directed effort”? Let’s take sports teams and professional athletes as an example:

In top level professional sports teams, athletes are paid and incentivized (a lot) to participate as a part of a group tasked with winning games and ideally winning championships. Achieving those tasks are great examples of goals that are long, hard and complex (much like hitting a revenue number at the end of a decent chunk of time like a quarter or a year). If we are to accept the arguments of the journalists and social scientists, then we would need to believe that in this example, these athletes are told “go win some games and we’ll pay you a lot of money”, and then it is left at that.

We all know that is not the case.

Athletes are paid a lot of money, yes – but they are given great coaches, equipment and practice facilities. They work extremely hard during the season in practice sessions, strategy sessions and physical therapy. They spend hours analyzing the games they just finished playing to see what they can learn from them about their past performance, and more hours analyzing the teams they will play next to see how they can best prepare for them.

Where does the money fit in? The work is hard – just like sales work – and being given an incentive to work towards winning – a directed effort – to improve the chances of winning is a logical AND a proven, effective paradigm.

Unfortunately, the recovering lawyer who delivered the popular TED talk forgot to mention that part…..

So let’s go back to our joke, but with the new understanding of how money motivation can work:

So a guy asks his friend, “can you swim?”

The friend says “no”

The guy asks “what if I pay you a lot to learn, and teach you, coach you, analyze your progress and help you to succeed – in that case, will you try?

The friend says, “sure!”

The joke is even less funny now, but it makes the point – a laboratory experiment isolating a single variable about the completion of complex tasks and the effect of financial motivation is not a valid comparison for a sales organization in which salespeople are well managed, motivated, trained and incentivized.

In other words, money motivation does work, but like most things in life – you just have to be more than one-dimensional about how you use it to get the results you desire. The role for sales management is more than just dangling the carrot. For incentives to work, managers need to help their salespeople win, then everybody wins, and earns their incentives as well.


Authors note (AKA shameless plugs)

So, this 7-step sales process and associated topics…. Yup, I write about that a lot. I’ve been working with it since I developed it about 25 years ago – in my own diverse work experiences, with my teams when I had them, and with clients ever since.

If you would like to develop you own personalized and customized, highly effective and efficient B2B selling system, here are some further steps you can take:

The Salesman’s Guide to Dating is a free or very cheap (depending on Amazon) Kindle book that walks you through the sales process using the familiar analogy of dating. It’s a good, fun and quick way to get your mind around the whole process and how the pieces fit together.

Building Your Sales Process (BYSP) is a free and very thorough exploration of the same 7-step process that will walk you through the development of your own customized, personal B2B selling system. When you are done, you will know exactly what to do to get new business.

The Momentum Selling System® is an inexpensive but very robust online sales training course that is similar to BYSP, but goes deeper into the concepts behind each of the steps, and also helps you develop a plan not only for the 7-step process but also addresses mindset, repeat business and client base management.

If none of that sounds right, I do personal coaching and offer a free 30-minute intake session so that we can both learn if it makes sense to work together 1-on-1. If this sounds interesting, click over to the coaching page on this site and sign up for the free session.

Here’s to your success!