MASTERING SALES MANAGEMENT: THE PSYCHOLOGY BEHIND EFFECTIVE SALES TEAMS

Brian Will, Serial Entrepreneur & Industry Leading Business & Sales Management Consultant

This blog is based on the principles taught in my new masterclass, The Psychology of Sales Masterclass, which is now available on Skool! Join my community below and check out the first module for FREE! 

The psychology of sales doesn’t just apply to the customer. For sales managers, it’s also about understanding the psychology of salespeople and motivating them to perform at their best. If a manager can find a way to align the goals of both their individual sales reps and organizational as a whole, they can help their team overcome the common barriers to higher performance.

Here are five essential elements to understand the psychology of sales management and help your team of sales professionals achieve their full potential:

1. Understanding Sales Motivation

Many sales managers assume that money is the sole motivator for their team. While compensation plays a very significant role, it isn’t the only factor that drives salespeople. In fact, the laziness factor is often overlooked. This phenomenon occurs when sales reps meet their personal financial goals and, instead of pushing for more, relax their efforts.

For instance, a salesperson who needs $100,000 annually to sustain their lifestyle may produce only at that level, even if they have the potential to make much more. Because their personal goals do not align with the company’s goals, this creates lost opportunities and results in diminished profits and wasted resources. 

2. The 20-70-10 Rule

Sales organizations often exhibit a performance distribution where:

• 20% of the sales team are superstars – They are what’s possible and achieve exceptional results.
• 70% are average performers – They do well enough to sustain the organization but could do more.
• 10% are underperformers – These individuals typically need to be replaced.

As a sales manager, your goal should be to move as many team members as possible from the 70% category into the top 20%, while addressing underperformance in the bottom 10%. You have to accept that the entire sales organization will never operate at a maximum like your top 20%, so you must decide what level of performance is acceptable. Once that decision is made, it’s essential to ensure that your compensation plans are structured in a way that pushes everyone to strive for more, not just your top performers.

3. Aligning Compensation with Goals

One of the biggest challenges in sales management is creating compensation and incentive structures that drive consistent high performance. Many companies mistakenly use straight-line commission models, where a percentage of sales is paid across the board. This encourages the laziness factor and often fails to push sales reps beyond their comfort zones. They will perform the exact same each month to make just the amount of money they need, and their sales progress will plateau.

To overcome this, consider implementing tiered compensation plans. For example, a salesperson could earn 5% commission on the first $500,000 of sales, 10% on the next $500,000, and 15% on the next tier. This structure rewards higher performance without penalizing the company’s bottom line. By carefully aligning compensation with both individual and company goals, you create a system where everyone benefits. Your sales reps can still make the amount they desire, but in this tier system the company will also make more revenue and continue to grow. 

4. Designing Effective Incentive Programs

Incentives are powerful tools when used correctly. However, to be truly effective, they must meet specific psychological criteria. Here are three key rules for creating successful incentives:

• Achievability: Incentives should be within reach for all team members. If only the top performers consistently earn the bonuses, the rest of the team won’t push themselves to improve.
• Substantiality: The incentive must be significant enough to motivate behavior change. A small bonus won’t inspire extraordinary effort if the salesperson is already financially comfortable.
• Shorter Time Frames: Long-term incentives quickly lose their motivational power. Salespeople need to see a tangible reward within a shorter time frame, like monthly or quarterly, rather than waiting for a year-end bonus.

When properly structured, incentives can push your team to exceed expectations and boost company profits.

5. Goal Setting and Active Management

An essential part of sales management is goal alignment between the sales rep and the company. Every sales manager should sit down with each team member to understand their individual goals, whether it’s earning a certain income or advancing within the company. From there, managers can reverse-engineer those goals and create clear pathways for the rep to achieve them through weekly or monthly milestones.

Managers should also actively track progress, offering support and accountability. If you miss check ins for one week, you may lose your momentum for two. If you miss check-ins for two weeks, you lose a month’s worth of momentum, and so on. A consistent focus on goals ensures that your team remains motivated and productive. 

Conclusion

Effective sales management requires a deep understanding of human psychology, goal alignment, and the implementation of strategic compensation plans. By focusing on overcoming the laziness factor, aligning team goals with company objectives, and creating motivating incentives, you can elevate your sales team’s performance and drive better results across the board.

Consistent goal tracking, regular check-ins, and structured rewards will ensure that your team stays focused, productive, and continuously motivated to reach new heights.

For a deeper dive into these principles and more advanced sales techniques, consider exploring The Psychology of Sales Masterclass, or reach out to me at questions@brianwillmedia.com for more information.

If you’re ready to break free from the status quo and join the ranks of the mavericks, the rebels, and the renegades who refuse to conform and instead build multi-million dollar businesses, subscribe to The Dropout Multi-Millionaire Podcast wherever you choose to listen!