Getting Your Money’s Worth: Improving Sales Compensation

In a previous article (“Rethinking Sales Compensation,” Top Sales Magazine, February 2017), I examined three common but false assumptions about money, motivation, and management in sales compensation practices. The message was that the purpose of any sales comp plan is to motivate the sales force to achieve the firm’s goals. There’s no such thing as effective selling if that selling doesn’t link to your firm’s strategy. Business history is full of firms that got what they paid for (e.g., reps who, responding to their volume-driven bonuses, failed to execute a premium-priced solutions strategy), and didn’t get what they didn’t pay for (e.g., individually-focused incentives in a team selling approach).

What, then, are the characteristics of strategically effective compensation plans? I’ll focus here on a crucial starting point: understanding the important sales tasks in your business and, therefore, what the sales person must do to drive strategy execution and results. In selling to retail trade customers, for example, sales tasks can usually be divided into three categories:

  1. Volume-Influencing Activities: selling new items, getting more shelf space for established items, selling point-of-sale materials or in-store displays, negotiating trade promotions, and so on.
  2. In-Store Service Activities: shelf audits, handling damaged merchandise, ensuring product freshness, handling queries from store managers are examples here.
  3. Supply-Chain Management Activities: sales forecasting by account, establishing and managing delivery schedules, and coordination with your firm’s operations people for that customer.

A comp plan should set priorities among these tasks, and it’s your strategy that should determine the priorities, not a generic selling methodology or organizational legacy. Companies with automated replenishment systems for customers, for example, have less need to focus on supply-chain tasks in their sales comp plans because these tasks are largely handled in non-sales areas, such as IT. Companies that use service merchandisers in their go-to-market efforts have less need to focus on in-store service tasks.

Similarly, in B2B businesses, comp plans affect which portion of selling is attention to delivery, price negotiations, building channel relationships, pre- or post-sale applications support, cold calling, or cross-selling to current accounts. The relative importance of these tasks typically changes over the course of the product-market life cycle. Early in the cycle in technology businesses, for example, customer education and applications development are often key sales tasks. But as the market develops and standards emerge, salespeople spend more time selling against functionally equivalent products or developing third-party relationships. Your comp plan should keep pace with these task changes, or strategy execution falters. For years in the pharma business, for example, call frequency on doctors correlated with sales results, so pharma reps had to make daily call quotas to make bonus. As managed care and other large entities become more prominent in purchasing, they reduce the number of relevant call points but increase the relevant buying unit. Comp design needs to change, or you’re paying for motion not results.

The point is to focus on how the salesperson makes a difference with customers today, not yesterday. It’s not the responsibility of customers to inform you when changes occur. It’s the seller’s responsibility to track and adapt to market changes. One reason for disconnects between comp plans and salesperson behavior is that, in many firms, the people designing pay plans do so according to an obsolete vision of sales tasks. If wining, dining, and attending trade shows or conferences are important, the plan’s treatment of expenses should reflect those tasks. If, in a de facto multichannel world, working with intermediaries is important, then the plan should provide incentives to work with influential resellers or value-delivery partners through cross-referrals, training, or joint sales calls. If it doesn’t, then salespeople often sell against these entities and both parties lose the sale.

There’s an important managerial implication here: in designing comp plans, there is ultimately no substitute for ongoing field interaction, including actual sales calls. The common practice of “benchmarking” a company’s compensation plan against an alleged “industry-standard” mix of salary and incentives can be dysfunctional. One reason is that the strategies, and therefore the target customers and buying processes encountered by salespeople, differ among firms even in the same industry. As an executive once told me, “Sales in most companies is managed as it should have been managed five years ago in that business. Because that’s usually the last time the senior people making the most important sales decisions were actually in constant touch with current market realities.” New technologies and “big data” algorithms are providing tools for better tracking and diagnoses of conversion rates, call patterns, and other aspects of funnel management. But as a character in a John le Carre novel puts it, “A desk is a dangerous place from which to watch the world.”

As I mentioned in my previous article, there are always links (intended or unintended) between money, management, and motivation. Among other things, how you pay will affect the kind of person attracted to your sales organization. My core advice to those in sales or the C-Suite about compensation design: start with the engine (understanding sales tasks as they exist today in your market, and therefore the behaviors you want from salespeople), and then install the transmission (the specific mix of incentives aimed at encouraging those efforts).

 

Frank Cespedes teaches at Harvard Business School and is the author of Aligning Strategy and Sales (Harvard Business Review Press).

Rethinking Sales Compensation

Compensation is probably the most discussed aspect of sales and the biggest chunk of the $900 billion that U.S. companies alone spend on selling. An estimated 85% of companies use incentive plans which, on average, account for about 40% of total sales compensation. Yet, in a survey of 700 firms, a whopping 20% reported that their comp plans had “minimal or no impact on selling behavior,” 12% said they “do not know,” and less than 9% said their pay plan “consistently drives precise selling behavior.”

That’s a lot of wasted money and managerial effort. One reason is that sales comp is typically based on some conventional wisdom that, in my experience, is often false. Here are three assertions that merit re-examination as you consider your sales plan for the coming year:

“Money is the Only Motivator”: You hear this in the often repeated assertion that salespeople are, like vending machines, “coin operated.” But examine this assumption. Are others in a firm not motivated, among other things, by money (unlike you or me, for instance)? Are sales reps somehow genetically distinct and immune from other factors that affect behavior in organizations: priorities, processes, pride, professionalism, and so on? In numerous studies of consumer behavior, risk perceptions, and responses to different framing of rewards, behavioral economics shows that people are, alas, not simply rote profit-maximizing machines. Do people suddenly become different people when they join a sales force?

Anyone who has ever managed in a market with hierarchical cultural traditions, for instance, knows the value that salespeople and others put on titles, rank, and other nonmonetary impacts on behavior. Across cultures, recognition ceremonies reflect this human need, as does feedback to reps about performance. People are social creatures concerned with their standing and how they perform relative to others. As I’ve heard more than one salesperson say, “we work for money, but strive for recognition.”

Money matters. But the point is that the right comp plan is a necessary but not sufficient cause of getting the selling behaviors you want. You can’t substitute money for management. That’s why ongoing performance reviews are a necessary complement to compensation and a key (but often neglected) sales management responsibility. Any comp plan is part of, not a substitute for, ongoing performance management practices in a sales force. People manage people.

“Comp Plans Must Be Simple”: Behind this assertion is an implicit view of salespeople: they may not be bright enough to understand a “complex” plan. But this view is contradicted (often by the same person making the simplicity assertion) by fears that a complex plan will drive gaming behavior by reps who maximize income with minimal effort.

I have yet to meet the sales force that, in the aggregate, does not understand within a month the economic implications in their comp plan. It’s a core human trait: if a policy determines how you will eat, you will study it in detail. Moreover, available data across firms indicate no significant difference in the percentage of reps who meet and beat quota under more or less complex plans.

Will some reps game the system, any system, complex or simple? Yes. As one CEO told me, “Salespeople become experts in their pay plan, regardless of its simplicity or complexity, and you can count on unintended consequences.” But then the issue is crafting a coherent win-win plan, not fear of taxing sales peoples’ brains. In a strategically effective plan, the company profitably acquires a good customer when the salesperson wins a bonus or commission. Also, more sales situations increasingly involve inherently complex bundles of activities: data analyses, team sales efforts, product-plus-service offerings, multichannel approaches, and so on. You can pretend the complexity isn’t there in your market and customer buying processes, but it is.

“We Pay for Results, Not Process”: It may seem tough-minded and “empowering” to say to reps, “It’s up to you to figure out the best way to sell and I’ll pay you for the outcomes.” But the process for providing rewards is always at least as important as the level of pay itself.

For one thing, a pay process reflects strategic choices and management norms, explicit or implicit. Incentive plans are always important company communications about what’s really important and are read that way by the sales force. At many firms, salespeople receive big bonuses for results. But the basis of the bonus (e.g., orders booked by an individual rep) contradicts what the company, its espoused strategy, and sales managers say they want (e.g., referrals, joint presentations, or other aspects of cross-selling). The result is demotivation or, worse, motivation toward the wrong type of sales effort. In turn, this can hurt both customer satisfaction and ethical norms. Consider the sales results, versus process, at Wells Fargo.

Like other people, salespeople want to maximize rewards and they want to know why they succeeded or failed in achieving a goal. In fact, they want to use that information to make more money next month, next quarter, next year. The process for clarifying or ignoring these cause-and-effect links affects future behavior. We may “pay for results, not process,” but if we ignore process in a sales environment, we often don’t get what we’ve already paid for.

Like it or not, your sales compensation plan is always part of motivational and ongoing performance management practices (good, bad, or indifferent) in your firm. Those three factors—money, motivation, management—interact and they affect both selling behaviors and strategy execution. They must be linked in an effective pay plan, and that’s a big part of what leaders—in sales and the C-Suite—get paid for.

[1] “Sales Compensation and Performance Management: Key Trends Analysis,” CSO Insights.

Frank Cespedes teaches at Harvard Business School and is the author of Aligning Strategy and Sales (Harvard Business Review Press).

To Increase Sales, Get Customers to Commit a Little at a Time

Most sales models include a conversion funnel in which reps try to convert a marketing-generated lead into a prospect and then a customer through sequential steps. In this model, sales people are expected to make the process as friction-less as possible for the potential buyer and to close the deal at the end by using certain phrases and techniques to “overcome objections.” This perspective is promoted in books and seminars, but research indicates it is not how people buy.

As one of us noted in a previous article, buyers work their way through parallel streams (rather than a funnel) as they explore, evaluate, and engage in purchase decisions via web sites, white papers, social media, and contact with other buyers through sites like Marketo, and so on.

This why the end of a sales process is the worst time to handle objections — prospects typically contemplate their objections long before “close,” and, to avoid conflict, often cite a socially-acceptable rationale such as price, which may not be the real barrier to buying. To better address this reality, sellers should ask prospects to make incremental commitments throughout the process.

Along with improving sales results, research has shown that incremental commitments can boost charitable giving, increase show rates for blood drives, and reduce smoking. In a seminal study, a team posing as volunteer workers canvassed a neighborhood and asked residents to put a large “Drive Carefully” billboard in their front yards. Most residents, over 80%, refused to do so, mostly because the signs would have obstructed the views of their homes. Researchers had better luck in a near-by neighborhood, however, by first asking residents to display a smaller, three-inch sign that read “Be a Safe Driver.” This request was met with almost universal acceptance. Then, two weeks later, when researchers returned and asked this second-group of homeowners to put the large “Drive Carefully” billboards in their front yards, 76% agreed to do so.

An incremental approach to sales has many benefits. It allows reps to glean more information from prospects and to gauge their commitment rather than just their comprehension — a crucial difference in a customer conversation. Usually, reps are taught to listen for phrases from prospects such as “that makes sense” or “that’s a valid point” or nonverbal signals such as head nods. But these cues mean only that a prospect is comprehending what you’re saying. They’re analogous to the conversational si in Spanish and many other languages, which means “I hear you,” not “I agree with you.”

Commitment, on the other hand, requires action. For instance, if you were to periodically prompt prospects to confirm that they agree with the data or objective you’ve cited, and then ask them if they’d be willing to act on that agreement via some small action, you’d receive much clearer feedback. If the prospect commits, you can move on; if not, you should identify the objection or barrier, and deal with it.

Because incremental commitments are so vital, you must be intentional in securing them. As a general rule, the earlier you can identify objections, the more likely the sale will occur.

Incremental commitments can also convince prospects to change, which is vital in selling new products or services. Unless the proposed benefits of a new product significantly outweigh their perceived losses of a change, prospects tend to stick with what they know, a phenomenon known as the endowment effect. The incremental-commitment approach can help to overcome status-quo inertia.

Consider Paccar, a designer and manufacturer of premium trucks, which has consistently introduced new products and maintained a price premium of 10-20% over its rivals. One reason for Paccar’s success is its online interactive that shows potential customers the expenses that accrue during the lifetime of owning a truck. You can input gasoline costs, tire rolling coefficients, and vehicle weight to quantify the benefits of a Paccar truck versus those of competitors. You can do the same for resale value, maintenance, driver retention (useful data if you run a fleet), and financing costs.

The interactive makes it easy for prospects to comprehend the relative economics at play and allows them to make small but meaningful commitments during the search and sale process, alleviating their fears. This is no small feat since truck owners, like Harley riders, are often beholden to a particular brand, and sometimes even tattoo its logo on their bodies. The process also improves prospecting and sales productivity because it allows reps to gauge the willingness of customers to commit before Paccar devotes expensive resources to closing the deal.

Other companies have found similar success. One firm, which sells complex technical services to telecom companies, was spending 9 to 12 months of its 24-to-30 month selling cycle in proof-of-concept meetings with multiple groups at the customer — a big sunk cost if the sale was not closed. By instituting demos at various parts of their buyers’ journeys, the firm decreased its selling cycle by 6 to 12 months, increased close rates, and freed-up more time for selling to other prospects.

To add to that, many companies are using content marketing campaigns to uncover potential objections, generate initial commitments to successive aspects of their value propositions, and identify more promising leads. This is more productive than relying on downloaded white papers or blogs, which often generate a broad and often unproductive array of leads.

New sales enablement tools are making it possible to make incremental commitments a measurable pipeline activity. Showpad and other services allow reps to forward materials to prospects and observe how the prospect engages (or not) with the content. Does the prospect look at the price list? Does she forward the document to others in the buying unit? Which collateral or trial offers do and do not generate action? This helps to pinpoint where incremental commitments can be best located.

It’s important to keep in mind that it’s not the customer’s responsibility to make selling easy; it’s the seller’s job to align sales activities with actual buying behavior. So don’t treat closing as the last step of a linear process; instead, you should always be closing — always — throughout the sales process via incremental commitments.

The Dialogue That Rarely Happens

The Dialogue That Rarely Happens                                                                                                         

Frank V. Cespedes

Originally published in Top Sales magazine (February, 2016)

 

In any organization, influence is bestowed as well as earned. It requires relevant expertise and results, but also being recognized by others as adding value.  Sales managers are no exception to the rule. In many firms, Sales is still treated as a mysterious black box—essential for meeting quarterly revenue targets, but hermetically sealed off from other functions as a tactical tool that’s rarely part of strategy formulation. Moreover, many Sales leaders like it that way. But those days are passing. Consider what’s happening between Finance and Sales.

 

In the past two decades in U.S. companies, the number of executives reporting to the CEO has doubled, largely driven by more functional specialists (CIO, CMO, etc.), not general managers responsible for integrating activities across functions. Business requires more specialist knowledge. Simultaneously, Fortune-500 and S&P-500 companies with COOs have decreased to about 35%.[1] COOs once outnumbered CFOs in those firms, but the proportions have flipped.

 

Finance now plays a prominent role in strategic planning and in evaluating sales’ execution of strategy. A function called Financial Planning and Analysis (FP&A) evaluates sales effectiveness in companies ranging from Dunkin Brands Group to internet domain seller GoDaddy. At Dunkin, 36 people work on FP&A projects involving customer acquisition and retention, and the CFO (who ran FP&A before becoming CFO) notes that “We stick our hands in absolutely everything”; at GoDaddy, FP&A focuses on analyzing performance metrics and reallocating marketing and sales spending.[2] The function is growing. The Association for Financial Professionals offers credentialing programs in FP&A and thousands have enrolled. Similarly, the burgeoning number of Sales Operations groups—charged with applying analytics to sales processes and selling expenses–are often staffed by people with Finance backgrounds.

 

How well prepared are Sales leaders for this increased scrutiny? In my experience, most understand the funnel activities that currently drive the top-line in their company. But they rarely understand other financial components of selling beyond sales volume. For example:

 

Efficiency (doing things right) versus Effectiveness (doing the right things).  Depending upon a firm’s strategy, some sales forces require cost-efficiency measures while others require effectiveness metrics. A simple expense-to-revenue ratio, for instance, can shed light on the relative cost efficiency of the current sales process but not its cost effectiveness, which is a more complex relationship between selling expenses, revenues, margins, and customers acquired through one or another means of organizing sales efforts.

 

Price versus Cost-to-Serve.  Profit is the difference between the price customers pay and the seller’s cost to serve customers, which can vary dramatically. Some customers require more sales calls; some buy in large, production-efficient order quantities, while others may buy more in total volume but with many just-in-time orders; customers differ in their product customization and post-sale service requirements. Most sales compensation plans (about 70%, according to surveys) bonus reps solely on volume, so the message is that any customer is a good customer. But differences in cost-to-serve are important to understand and manage if, like Finance, you take seriously the notion of positive returns on invested capital. When Sales leaders ignore this and simply chase volume, their people are typically driven by competing price proposals, resources are not allocated optimally, and the firm is ultimately at the mercy of competitors who can manage their true costs.

 

Conversely, while Finance rightly demands value-creation plans from Sales leaders, many in Finance are often unaware how sales decisions affect enterprise value. Hence, many FP&A professionals are perceived as “financial bureaucrats” who only focus on missed budget projections. There are basically four ways to create value for shareholders and daily sales activities are crucial to each:

 

Invest in projects that earn more than their cost of capital. Most projects are driven by revenue-seeking activities with customers. Hence, customer selection criteria and sales call patterns materially impact which projects the firm invests in and its capital expenditures.

 

Increase profits from existing capital investments. Here, key determinants are the interactions that ensue once a sale has been made and that accrete costs, time, and asset utilization patterns in the firm.

 

Reduce assets devoted to activities that earn less than their cost of capital. This requires understanding cost-to-serve different customer groups and how performance metrics affect selling behaviors and deals closed.

 

Reduce the firm’s cost of capital. Financing needs are mainly driven by the cash on hand and the working capital required for conducting and growing the business. Most often, the biggest driver of cash-out and cash-in is the selling cycle. Accounts payables are accumulated during selling, and accounts receivables are largely determined by what’s sold, how fast, and at what price. That’s why increasing close rates and accelerating selling cycles is a strategic and financial issue, not only a sales task.

 

How well prepared are Finance leaders for this scrutiny? How many understand how compensation plans, territory design, metrics, and other factors affect selling? Without that understanding, reallocating Sales spending becomes either an academic exercise or an unwitting impediment to the use of assets that do remain essential to profitable selling.

 

Changes in companies are altering what it means to be seen as an effective Sales leader. It requires more informed dialogue with Finance, because there is no such thing as effective selling if it’s not connected to business goals and value creation. In turn, effective leaders can transform Sales into what it should always be: a core agent of strategy, not only a vehicle for a given selling methodology.

 

Frank Cespedes teaches at Harvard Business School and is the author of Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling (Harvard Business Review Press).

 

 

ENDNOTES

[1] Julie Wolf, “The Flattened Firm: Not as Advertised,” California Management Review (2012) and Jason Karalan, The Chief Financial Officer (New York: Public Affairs Books, 2014).

 

[2] Alix Stuart, “Metrics Sell Doughnuts and More,” The Wall Street Journal (December 21, 2015).

3 Secrets to Scaling Your Business

3 Secrets to Scaling Your Business

International business consultant Frank Cespedes explains how you can build your platform, drive effective sales, and increase the growth potential of your business.

I’ve learned so much from my mistakes, as well as the mistakes and wisdom of my peers. In business, and in life, you have to keep listening and learning if you want to succeed.

Many entrepreneurs get started and get stuck! So, how do you grow your business when you don’t know where to start? I asked Frank Cespedes, Senior Lecturer at Harvard Business School, to help me shed some light on this topic. Frank has consulted businesses around the world and his latest book, Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling, has been hailed “The best sales book of the year” by Strategy+Business Magazine. Here’s what Frank had to say:

It’s tough to start a business that gets traction with paying customers. Data indicate that less than half of US start-ups survive beyond three years. But it’s much harder to grow. Even for businesses that attract venture funding, fewer than 6% achieve more than $10 million in revenues and fewer than 2% more than $50 million. The increase in angel groups, the advent of crowd-funding, the slow but steady spread of VC money beyond its traditional few cities, and mechanisms like incubators make it more possible to start a business. But as one investor says, “It has never been easier to start a company, and never harder to build one.”

Read the full article on Inc.com.

Does Social Media Sell? The Jury Is Out (and getting impatient)

Does Social Media Sell? The Jury Is Out (and getting impatient)

My sincere thank-you to DrivingSales and Paul Moran for his response, “Does Social Media Sell? A Harvard Professor Says No,” to my HBR.org article, “Is Social Media Actually Helping Your Company’s Bottom Line?” Paul says I am taking “a shallow perspective” on this topic. I disagree, and here’s why:

First, Paul does not take issue with the facts in my article: that most companies don’t have ROI measures for their social media investments; that few companies, according to the McKinsey research, even have accountable managers in place for that spending; that much online discourse about products and companies is fake, bought, or otherwise engineered, not “engagement” with potential customers; and that the comScore data about the unviewability of many display ads is bad news. Well, Mrs. Lincoln, except for those details, it’s a great play!

In fact, Paul agrees that many companies “are digging themselves into a large social media hole that will be very hard to climb out of.” His agreement supports a basic point in my article: “people tend to overhype new technologies and misallocate resources, especially marketers.” Don’t shoot the messenger who points out what the emperor is not wearing.

Read the full article on DrivingSales.

Is Social Media Actually Helping Your Company’s Bottom Line?

Is Social Media Actually Helping Your Company’s Bottom Line?

When it comes to business, we talk too much about social media and expect too little. It’s like the old joke about sales people: one person says, “I made some valuable contacts today,” and the other responds, “I didn’t get any orders, either.” Companies measure the market results of their sales investments. But few have measures or even have accountable managers in place for their social media investments, and only 7% say their organizations “understand the exact value at stake from digital.” Meanwhile, according to a Gallup survey, 62% of U.S. adults who use social media say these sites have no influence on their purchasing decisions and only 5% say they have a great deal of influence.

Read the full article on HBR.org.

Reinvent Your Sales Process While Still Hitting Your Numbers

Harvard Business Review

If you have a monopoly, then your reward is a quiet life, one devoid of having to deal with competition. But most firms face changing competition, threats to their installed base, and quarterly investor expectations — all of which place sometimes conflicting demands on sales efforts. Sales forces are expected to both:

Maintain the current business: Be predictable and consistent. Because the company relies on existing sources of revenue to keep the business going, sales faces constant pressure to “make the numbers” and focus on the short term. “Nothing happens until you make a sale” and achieve target numbers, and there are typically firm-wide consequences if you don’t.

Adapt to the new: Keep innovating. Current numbers are important, but preparing for future needs creates the necessary foundation for profitable growth. Sales must also generate new sources of revenue and so learn to sell new products, through expanded channels and applications, to new customer segments. This becomes more critical as market life cycles shorten and the time in which companies can maintain product differentiation shrinks.

Read the full article on HBR.org.

Managing Profitable Growth: The CFO’s Role

The CFO's Role

The goal of strategy is sustained profitable growth, and that means earning returns above your cost of capital or what economists call “Economic Profit” (EP). Companies seeking profitable growth, therefore, face two interdependent tasks: grow the top line and manage the costs and financial efficiency of their customer-acquisition efforts. While sales growth contains the “sizzle,” continuous cost-productivity improvements are the “steak” that feeds the bottom line.

But these tasks are often disconnected in companies. Employees then view cost-reduction initiatives as “what Finance does” (if Finance does them) in a series of one-time initiatives, not an ongoing process. Conversely, the top line is Sales’ domain and Finance does after-the-fact scorekeeping of revenues and margins. The results of that silo’d approach are not good. An analysis of nearly 3,000 nonfinancial companies from 2007–2011 found that the top quintile of firms accounted for 90% of all the EP measured, while the bottom two quintiles destroyed more than $450 billion in EP during this period.

CFOs can change these results by providing leadership and shining light on key links between sales activities, cost management, and profitable growth. To play that role, a CFO must set clear goals. Cost management requires training, preparation, and hours of execution, so pick your shots, not try to manage too many categories too quickly. Prioritize the important areas (usually those with the greatest saving opportunity) and establish the right metrics for measuring effectiveness on an ongoing basis.

Read the full article on The Price of Business

The myths behind pushy salespeople

The myths behind pushy salespeople

What does it take to be a good salesperson? There’s a wide range of responses. Most reflect what you’d expect to find in the Boy Scout Handbook, with commonly cited traits like modesty, listening, curiosity, achievement orientation, and lack of discouragement. In pop culture, it’s a different story. Salespeople are represented by the likes of Leonardo DiCaprio’s flamboyant character in The Wolf of Wall Street, who addresses a group on how to make a sale by challenging them to “sell me this pen.” And popular business author Dan Pink comes at it from yet another angle, touting a personality study which claims that “ambiverts” (people neither extremely introverted or extroverted) sell best.

These traits are so broad that, at best, they simply say that people tend to do business with people they like (but not always and not as often as many sales trainers assume). At worst, they recycle the old cynical description of a salesperson as someone who practices “the art of arresting the human intelligence long enough to get money from it.” In both cases, they’re stereotypes — formulaic and hackneyed images that obscure the realities.

For the realities, look at successful entrepreneurs—most of whom, in early-stage ventures, must sell—and their diverse paths. Jim Koch, for instance, went from bar to bar with six packs of beer to get Sam Adams started. Larry Ellison adopted famously aggressive sales tactics when he started Oracle Technology, a business where, if you win, you win a long-term contract and a string of licensing fees, and if you lose, you’re out of that account for years. It pays to be aggressive in that situation. But Mary Kay Ash focused her cosmetics salespeople on a combination of visible incentives (the signature pink Cadillacs), the intrinsic rewards and constant celebration of female achievement (when outlets for such achievements were more limited), and the kinder and gentler power of social networks.

Read the full article on Fortune.