Motivating Your Sales Force in a Tough Economy

By Barnett Helzberg, Jr.

Some entrepreneurs respond to the pressures presented by a tough economy by bearing down on their sales force, making it clear that they'd better produce—or else. This is the worst way to motivate talented, self-starting associates.

Remember, you do not have all the answers anymore than your sales associates do. Sure, you may be fearful. You can't afford mistakes. But taking a "my way or the highway" approach to managing people can have a damaging effect. Tough times are when you need to believe in your people most.

Early in the growth of our company, we responded to a highly competitive market by implementing rules, thinking this would allow us to avoid misdirected actions. When anything went wrong, we added another rule. We soon realized that the only thing growing was the list of rules. It dawned on us that this jumble of rules was creating an atmosphere that discouraged good people rather than encouraged them.

We saw the light. We had hired talented sales people. Why not believe in their abilities to make good things happen? We retained strong expectations for our sales associates and we ditched meaningless rules that prevented self-starters from using their own talents and resourcefulness to meet, and often exceed, those expectations. When they no longer feared making mistakes, our sales associates told us they felt trusted to make many of their own decisions. Using positive feedback, we made sure we recognized their successes and celebrated their triumphs. Believe me, we had a much more gung-ho sales team.

Our change in attitude certainly paid off. By 1995, when we sold our company to Warren Buffett, we operated 143 jewelry stores nationwide (more than 245 now), with average per-store sales of more than $2 million, nearly double the industry average.

When your sales associates are motivated to stretch their abilities and contribute to the success of the organization, they will inspire you to accomplish even more. It's a variation of the old adage, "Treat others the way you wish to be treated." If you believe in people, you will on occasion, depending on the risk and reward, willingly allow them to fail. If someone else's idea isn't as good as yours, but it's still okay, you're often better off allowing it done his or her way. Quality of execution is far more important than the idea.

In order to succeed in an increasingly complex and challenging business environment, entrepreneurs need the talents of everyone in the organization. Believe in the abilities of others and let them grow and perform at their best. Helping others harvest their triumphs will allow you to achieve more success than you could hope for by insisting everything be done your way. On those inevitable occasions when an individual disappoints you, take a deep breath. Believe me, many others will delight you by exceeding all expectations.

So how can you ignite your sales force to shine in the face of economic challenges? How can you put your belief in the abilities of your sales associates into practice?

1. Focus your attention on winners
2. Provide them with a sense of ownership
3. Establish objective individual goals and expectations
4. Recognize and reward great work

Focus your attention on winners
First realize the ability and desire to be motivated either exists or doesn't exist in a salesperson. You can't put it there. You can only fire it up. You are better served to invest your efforts in those who are self-starters and detach yourself from the well-meaning but ultimately futile effort to stimulate weak producers. You can win with the winners, even in a tough economy. High achievers set standards that inspire others to believe that the impossible can be accomplished. Sometimes your high achievers will set standards far beyond your own.

At Helzberg Diamonds, we found that high performance standards, when used in a positive way, motivated high achievers to push the envelope of their abilities. An early goal was to reach an average of $1 million in sales per store. When we hit that, the goal became $1.5 million. Next, we set our sights on $2 million. Everyone in the company believed we could reach each of these goals. So much so, that we quit looking at the competition's average store volume and competed with our own figures every year.

Provide them with a sense of ownership
It bears repeating that execution is far more important than ideas. Motivation and execution will be much greater if individuals apply their own ideas to a challenge. Encouraging ownership can ignite the spark that propels your sales force to outperform your own expectations by revving up enthusiasm and alerting you to future company leaders.

Establish objective individual goals and expectations
Setting clear goals for performance tells people what you expect of them and what they can expect of you. They provide a way to relate performance to the overall success of the company and measure how far everyone has come and how far we still have to go. Tangible and realistic goals can motivate a sales staff, even in the roughest economic environment, by providing direction and something specific to strive for. When these goals are communicated clearly to everyone, they allow you to budget your time, establish priorities and assign responsibilities.

Here's an example. In 1970, Jim Fisher, the manager of our store in Oklahoma City's Crossroads Mall, took me aside. He asked me not to mention that we had set a monthly sales goal of $20,000 for his store. I was surprised. Jim was a great manager and a $20,000 goal was well within his abilities. Then he delightedly told me that not only was $20,000 not a problem, but he and his sales associates had already set their own monthly sales goal at $40,000, twice the company's goal. They hit $38,000, 90 percent above what the company had expected of Jim and his associates. Jim and his staff taught me a great lesson. Setting individual goals encourages sales associates to take active roles in making the company successful. And nine out of ten times, your associates will set their own goals higher than those you would set for them.

Recognize and reward great work
In business, sincere use of positive reinforcement has proven effective time after time. When goals are met they should be recognized and appropriately rewarded quickly. The better your relationship with your staff, the better idea you'll have as to what kind of recognition reinforces the behavior you want to encourage. Some managers mistakenly believe that in tough times they have to be stingier with praise. Some even think the only way to get people to perform is to "kick butt." These misguided tactics may work temporarily, but after a while they add to a depressive mood.

At Helzberg Diamonds, we gave careful attention to our people on the front lines. Each month our top 25 sales associates received a small gift accompanied by a handwritten note from me. I enjoyed shopping for and sending these gifts, which were mailed to each associate's store for all to see. Seeing these gifts motivated other associates to raise their performances to win similar recognition.

A basic need of every human being is to feel appreciated. What I'm talking about is being valued for who you are, what you stand for and what you do to make things better. If you want to motivate your sales associates and help your company prosper through tough economic times, start by believing in your people.

To learn more about motivating your sales force, consider these AMA seminars:

• Coaching Your Sales Team
  
• Advanced Sales Management: Level 2
  

Author Bio: Barnett Helzberg, Jr. is former chairman of Helzberg Diamonds, the third-largest diamond retailer in the United States and author of What I Learned Before I Sold to Warren Buffett (John Wiley, April 2003). Helzberg built his small, family-owned business into a successful national retail operation that caught the attention of billionaire investor Warren Buffett, who was so impressed that he bought the company in 1995 through his holding company, Berkshire Hathaway. Mr. Helzberg can be reached at 816-753-7776. His Website is www.helzbergmentoring.org.