How to motivate sales teams in a tough economy

Sales reps are struggling today: Not only are their customers and prospects harder to sell, but even their companies have withdrawn many of the incentives they used to reward and motivate their performance. It started in December when many companies canceled their Christmas parties and annual bonuses. It then continued as companies announced they were not contributing to their 401K plans and that any increases or increases in fees would also be postponed.

As the recession continues, it threatens to stifle employee morale in all organizations, from sales reps to customer service to accounting. With little money for standard raises and cost-of-living increases, many businesses are rediscovering the benefits and impact that small benefits can have.

Sue Shellenbarger in The Wall Street Journal reports that corporations as diverse as Discovery Communications, Intel, and USAA have rolled out new perks like on-site childcare, concierge services, and free massages. These benefits may seem outlandish during tough times, but employers say it’s a way to keep top talent happy. “While such benefits cost relatively little, they pack a huge emotional punch.”

In fact, the most effective perks aren’t always the most expensive, Carlos Bergfeld and Princess Calabrese told BNET.com. “Studies show that cash incentives don’t stick in an employee’s mind—most people use the money to pay bills and then forget where it went.” Instead, Los Angeles-based public relations firm JS Communications gives employees two free days of “I don’t want to get out of bed.” Colorado’s New Belgium Brewery, best known for its flagship beer Fat Tire, celebrates employees’ one-year anniversaries by handing out custom bikes. “It costs a couple hundred bucks for the bike,” says the company’s director of media, Bryan Simpson. “But it means so much more.”

This is good advice and shows the growing trend of how profits are becoming on the new rise. In my previous roles as sales manager and vice president of sales, I understand how recognition can mean much more to a sales rep’s morale than just a cash bonus. Here are some cheap ideas you can start implementing right away that will have a huge impact on morale and performance:

1. Earn a couple of trophies like “Most New Leads Generated in a Week” or “Revenue Leader of the Week.” Every Monday, he awards the award to the sales representative who led his team in these or other areas during the previous week. Trust me, this weekly recognition goes a long way in keeping morale up.

2. Purchase a Blu-Ray High Definition DVD player for the vendor or employee of the month award. You can get them at Costco for $199. Buy it upfront and show it off during the month—you’ll get great mileage for just a few bucks.

3. Ask your employees for suggestions on the bonuses they would most like to receive. Then pick one or two and offer them over the next few months.

I’m sure you can think of other bonuses that would have an impact on your sales team and other employees in the company. You don’t have to spend a lot of money to keep your employees motivated, but you do have to be a little more creative. Just remember: Just because you can’t spread the bonuses your team is used to doesn’t mean you can’t motivate them in other ways.

Put on your thinking cap and find ways that fit your budget and let your team know how important they are. The loyalty, security, and production you will create will be well worth the effort.