How Does SetSail Drive Sales Productivity?

Behavior change is hard. Actively changing another person's behavior is even harder. But there are plenty of companies out there that have been able to crack that code. They understand that people don't always or even rarely act rationally. I'm Kristen Berman, co founder of Irrational Labs. Over the years, we've helped countless companies understand and leverage behavioral science to increase the health, wealth, and happiness of their users. The idea behind the Science of Change was to create a podcast that demystifies the psychology of decision making. So here's how it works. Each week I get to chat with visionary product and organizational leaders to uncover their insights about user behavior and how they've managed to change it. I match this up with some of the latest research in the field to get to the bottom of our core psychologies. So let's dive in and unlock the secrets behind the Science of Change. The Science of Change podcast is presented by Set Sail, world's number one revenue execution platform. So I have really been looking forward to this episode. My guest today is Bert Louey, co founder and Chief Product Officer of Setsail. Setsail is a platform that helps sales organizations perform more effectively, and they do it in clever ways by using, you guessed it, behavioral economics tactics. Now, disclaimer alert. Set Sail is also our wonderful sponsor for the Science of Change podcast. This means you should be skeptical of our conflicts of interest here, but as you will hear in the show, and if you're a regular listener, you've probably figured out by now, I don't hold back with commentary or critique. What can I say? I'm a contrarian for a living. Anyway, Set Sail did review the episode, but made no edits. Also worth noting, I'm not getting paid by Setsail, so I am free of influence. The reason Setsail is a sponsor and now a guest is because I genuinely do appreciate their approach to motivation and am excited about what they're doing. Okay, so onto the meat. Bert and I talk about how to design sales incentives effectively, including optimal frequency, how to know how big or small to make a prize, and overall behaviors to encourage. We deep dive on the trade offs between extrinsic and intrinsic motivations, how being charismatic affects your sales, and the pros and cons of quotas. So let's get ready to wait for it. Set Sail on this super fascinating episode of the Science of Change. So at the high level, Set Sail encourages sales reps in a different way than they may be used to. You help them prioritize deals. Can you help explain how exactly that works and maybe what the reps were doing before sales, that sale came along.

Yeah. So I think traditionally a lot of reps will focus on deals that are going well or that are close to closing and that might not always be aligned with where their company wants them to focus. Their company might want to prioritize a new segment or a new industry or want them to be selling a new product that just got launched and that might run counter to what's made the rep successful in the past. And so setsail allows our customers to motivate their reps to focus on those other areas.

Wonderful. So this is the interesting part maybe is how do you motivate sales reps to do something different? So can you explain a few of the tactics that Setsale uses to motivate them to sell more and better?

Yeah. So at a high level, what SETSA will allow our customers to do is get insight into areas that they wouldn't be able to normally see. So traditionally a lot of sales leaders and sales organizations will look at pipeline and close one deals or they'll look at activity. Just how much activity, how many emails and meetings are happening, but a lot of stuff happens in between. And what sets it will allow our customers to do is look at those intermediate points. So yes, you had a meeting, but who is that meeting with? How many different people at your customers are you meeting with? What are you talking about? And so all the extra insight allows them to see and have visibility into the sales process. And then once they have that visibility, they can identify what are those steps that they care about most and add incentives and tracking to it.

Why would having visibility of our progress be useful? Because people are motivated by making progress. The perception of progress often sustains self efficacy and motivation when people are pursuing goals. There's one study out there that found when people were given starter stamps on a coffee loyalty card, they were faster to return and more likely to complete the card than those who started with an empty card, even when the absolute number of coffees required was equal. Visibility matters the most when people are approaching their goals. Goal gradient hypothesis suggests that people have a strong tendency to accelerate towards the goals when they know they are getting close. People in a buy 10 get one free coffee reward program purchase coffee more frequently the closer they are to earning the free coffee. Just like in swimming competitions that involve multiple laps, swimmers swim faster when they are swimming toward the visual finish line than when they are swimming away from it. So first it's picking the behavior that you want to encourage and then it's adding some kind of incentive along with it to motivate people to do that behavior. You mentioned things around prioritizing deals that maybe some isn't necessarily intuitive. What are the behaviors or the non intuitive things that you measure that you look at that and you're like, wow, that's crazy that that would predict closing a deal. And most people are underestimating its power.

So actually I would spin it a little bit. I think in general, the things that we find are really helpful to move a deal are things that would be intuitive. And what isn't intuitive is how much reps are doing those things today. So I'll give you an example. One of the most common things that our customers want their reps to do more of is reach power, right? Which means going after the decision makers, going after a more senior level contact. And I think to me, and most people would say that that's sort of sales 101, right? Which is like, yes, you want to reach power. Like anyone can understand that. But in reality what we find is that a lot of reps don't do that enough and a lot of deals might not actually have reached power or might have reached power too late in the sales cycle. And so that's an example of something where actually our customers and most people would find that intuitive. But when you look at the data, reps aren't doing it enough. And by giving visibility, shining a light on it, showing how much that's happening and adding that incentive, we've been able to increase the percent of deals that are reaching power and thus improve win rate and overall success of the reps.

So reps have some intuition and you just need to kind of further them. Do you have any thoughts on intrinsic versus extrinsic motivation? Intrinsic being? You know, I get up every morning and I just love my job and so I'm going to work late, work on the weekends. This is my passion versus extrinsic. You pay me to do something and I will do it. And I'm doing my job because of the external motivation of status or money. We've talked about this in previous episodes, but here's a quick refresher. Extrinsic motivation can come via tangible external rewards such as cash or even pay raises. Intrinsic motivation is the desire to do an activity for its inherent satisfaction. Intrinsic motivation is optimal. Imagine waking up and just wanting to exercise. That's the dream. But sometimes we can't muster up that intrinsic motivation and we need to fake it till we make it. In this case, extrinsic rewards can be very motivating. But back to Bert.

I guess my general answers both are really important, and so we don't want to rely on one versus the other. And to me, I think setsale really helps with both. So obviously, the incentive helps you with that extrinsic motivation. Right. They know that if I do this, I get rewarded with more money right away. And that's what we achieve with our weekly contests. At the same time, because we're able to identify what are the good behaviors and be able to show reps, like, where they're doing well, where they might be falling behind across all those different good behaviors. We really help reps who want to do better and become better sales reps on their own get that sort of insight into their own performance so that they can improve. So really what we're trying to do at satell is leverage or take advantage of both of those forms.

That's nice. So that really comes down and leverages training. So you want to get sales reps to be kind of incrementally better. And in sales, there's probably some art and some science. So what's your approach to training sales people to improve their skills?

Yeah. So set sail doesn't focus as much on training. It's more about visibility and motivation. What we have found is reps actually sort of going back to what I said before, reps are very smart and can figure out how to do the things they want to do. It's more about making clear what they should be focused on and motivating to do those consistently. That's really how setsail moves the needle. We found. Going back to the same example of reaching power, it's not that reps maybe don't know how to do it or don't know it's important. It's just being consistent about it and sort of remembering to do that, not giving up, giving them that little extra motivation to do those things. The quotes that we hear from reps are set sail, like, pushed me not to give up or set sail motivated me to go a little bit above and beyond what I would have done before. And that's where we see the increase in productivity.

Got it. Pushing on this a little bit, though, because you basically see a sales rep who's highly charismatic and maybe one who's not. And the intuition there is that the highly charismatic one may close more deals, get more leads. Is this a myth, or is this something that actually really does help improve your sales output? If you are the charming one? All right, so the idea that charming or physically attractive people are Favored is not exactly a secret, and there is even a term for it. Beauty Premium. A group of Italian researchers sent out more than 10,000 resumes to job openings using the same resume, changing only the name and the photo included. Resumes that arrived with an unattractive photo had a callback rate of about 17%. But when the same resume showed up with an attractive photo, the callback rate jumped to 50%. This is partly due to the halo effect of physical attractiveness. People tend to attach positive traits to physically attractive people. They are often rated as more competent, more trustworthy, more able, and even having better marriages and jobs. But this perception may not be a myth when it comes to sales reps. In one study, physically attractive people were shown to be more confident than their less beauty endowed peers. They also had better oral communication and social skills when interacting with others at work. After all, doesn't it seem like everyone becomes a bit nicer when they're talking to an attractive person?

So I'm not a sales rep myself. I mean I have some experience as the co founder of a company, so I can only tell you what I've seen and what I've observed with talking to our customers. But I think that sales is both an art and a science. And I wouldn't tell you I think it's a 5050 mix between those two. There's definitely some value in being charismatic like you said, and have some charm and build that relationship and trust with someone. Absolutely. But there's also a lot of value in those basic behaviors that I talked about before. Right. Reaching out consistently, like prospecting into accounts, responding to your customers on time. Right. Pitching using the latest messaging and collateral that your team has provided. These are all things that I think are a little bit more the science of it, like just like basic behaviors and best practices that as I said, often when we highlight to our customers, we'll see pretty significant gaps across the team. Usually when we're looking at these different signals that we have, there'll be a 5x or more difference between your top performers and your bottom performers on just those things that I mentioned. And so that's where Saidzel can really help our customers.

Can you give a practical example of what a contest looks like?

So the typical set sail contest will be weekly. So if I'm a rep in the contest, my manager and my leadership would have identified a few key behaviors that they want our team to be focused on. So as I said before, that could be reaching out to a certain named account list. It could be going higher and wider on my deals. Those would be a couple examples. And so on a daily basis in Setsale you can see my progress for the week. I'll earn points for doing different things such as reaching out to 10 or more companies or getting engagement from a C level contact at one of my customers and I'll earn points for those. Throughout the day there'll be a leaderboard that will be updated and at the end of the week typically setsail reward maybe the top three top five people in my contest with a cash price.

So what have you learned about leaderboards and what works and what doesn't?

For leaderboards, I think our main focus and what we've heard the most feedback on is one making sure they're very what you're rewarding in the leaderboard is very simple and easy to understand. The second important thing is making sure the leaderboard is up to date. So you want it to be really fresh. A lot of reps will if they achieve something, they want to see that right away in their leaderboard. They want to see themselves move up and get that quick feedback. The other thing that is important is making sure that everyone involved in our contests and our leaderboards understand why the leaderboard is actually tracking rewarding the things. That is sometimes when we run contests there's a disconnect between reps on the contest and what their leadership thinks is important and that will lead to a lot of challenges or lower the chances of of success.

Interesting. So having the rep or have you ever had the rep participate in setting those key behaviors for what is incentivized or what is in the contest this week?

Yeah, that's a good point. A lot of I think our best customers will involve their reps in deciding what is important and also the relative weight how many points some of those behaviors go to for sure. I think oftentimes I think that the people who use that sale the best will have leadership frontline managers plus reps as part of that input process on what to decide or what to incentivize.

Allowing reps to design the weekly contests is smart. Psychologists have found that letting employees have a say in decision making is a really cost efficient way to boost employee motivation. In a six week field experiment with more than 1700 Chinese factory workers, having a weekly meeting where workers could share work ideas and personal goals boosted workers productivity by 10% and had long lasting effects even nine weeks after the meetings ended. Now let's go to the prizes. So you have let's say a behavior of you said higher and wider. So I'm assuming that means you have to get to the power and hit more people. Is that a fair right?

Yeah, that's right. That's right. Getting to the decision maker plus having multiple supporters on your deal.

Okay, so you've set this key behavior. It's now the weekly contest. Am I as a rep tracking when I've hit another VP level or when I've sent an email or gotten an email from a different level? Like how does the actual guts of the tracking work?

So setsail is tied directly into how I as a rep and communicating with my customers. So we have integrations into email, calendar, call recording software, cadence software. So we are tied directly into that. So reps don't have to do anything for them. Sutsell is pretty lightweight so they can check their scores. They don't have to do any additional logging. They can see their progress. SetCell will detect that automatically and award the points and sort of celebrate those wins.

Cool. Okay, so I've just gotten an email from a vp. I've gotten higher than I've ever had before. How many points do I get and what do those points mean in terms of prizes?

So how many points you get depends on what you and your team have set up, so it's fully configurable. Sometimes our customers like to make their points really large, like 100 points for things. Sometimes they'll do like 5 or 10 points for things. But that it's totally configurable as well as the prizes. So we will give guidance to our customers. Hey, like you want to aim for, let's say and it sort of depends on the level and seniority of the rep too. You want to aim for anywhere from. We've had prizes anywhere from, you know, $50 for the top prize up to $500 for the top prize a week. It really depends on how much those reps earn. You know, what's the culture of the company in terms of giving out these special incentives.

He's right. There are benefits to holding weekly rather than monthly or yearly contests. Weekly contests provide quick feedback on your productivity. Immediate and relevant feedback has been shown to increase productivity in sales. The weekly cadence also allows people to break a larger goal into smaller and more granular goals, which makes it more manageable and easier to track. Economists from Harvard Business School did a field experiment where they changed the sales quota frequency from monthly to daily. This change led to an increase in sales performance, especially among low performing salespeople. But even with all these positives, weekly contests still have some caveats. In the experiment that changed sales quotas from monthly to daily, reps started to focus on selling large numbers of cheaper items rather than more expensive items that actually have higher profit margins. Focus on short term incremental returns can undermine pursuits of higher impact goals that are difficult to achieve or can only be achieved with long term investment and persistency. They also found that under the daily quota program, high performing reps gave up more frequently. If they experience bad luck or slow sales in the morning, they were more likely to sandbag the rest of the day and start fresh the next morning. But what does that mean for the weekly contests that Bert set? It means that employees, especially the top performers, could actually be less motivated and simply give up if they have a bad start of the week and are not on track to win the weekly contest. Okay, so now I've gotten the prize. Let's say I'm one of those, one of those lucky people who've gotten this $25 prize. Is my name put somewhere? Does everybody know? Does everybody know if I didn't get the prize and I'm the loser, I'm the bottom of the list. How does public visibility work here?

Yeah, so we definitely do celebrate. So within the app itself, there'll be a leaderboard within setsail so everyone can see who got first place and who won. There's notifications that go out over email as well to everyone on the team, including, you know, the managers and the leadership. And so we definitely do go through a lot to celebrate that. When back when folks were in the office, we have a TV experience that if you're on the sales floor, you could see the winners too, live on a television. We have not shamed losers though. That's something that again, sort of going with the what I said before about like not necessarily focusing on what are like low performers doing, focusing on good performers. In the same vein, we've been more around celebrating and highlighting strong performance. We have not shamed or tried to highlight people who are at the bottom. And that's more around just trying to be a culture of positive change of like good sales habits. That's what we want to focus our reps on.

One critique of this model could be that you're rewarding the people who are already very good. And maybe this is okay, but it may not incentivize them to do better. That the real upside in any organization is thinking about maybe the people in the middle that could incrementally improve or the people close to the bottom that aren't yet at the bottom. But could move a little up. How do you think about this potential problem where people who are already good are the ones collecting the $25 prizes every week?

Yeah, actually what we've seen is that this model that we've been talking about really does move the middle. We have seen that in our data that we're able to move sort of those middle performers who could be really good. Those are the folks actually where we see the greatest amount of change. And maybe that goes to why you don't want to always just reward number one. You want to reward at least a quarter to a third of the pack so that those middle performers are motivated. And that's, that's what we've seen.

Another critique could be that after I get a prize I say this is very nice, I don't need one for a while and you kind of take off the gas. So do you see any issues of after you've won something that the winners are less motivated or less incentivized the next weeks?

No, we haven't seen that either. And usually when folks win, they actually get even more engaged. I think it's actually what we've seen is that folks like to. One interesting behavior is we see. So when you win a contest, you get money in your set sale wallet. You don't necessarily have to cash it out right away and you can collect that money over time. And we see like top people who win actually like to continue to collect that money before they cash out. They kind of like to see that number growing. And yeah, we do not see a drop off in engagement. We often actually see more engagement for people who win.

Interesting. And have you experimented with other types of prizes? So I'll go with the final potential critique which could be, look, you're just paying me to improve. It feels like a very transactional relationship. I know this is sales, but do I mean anything more to you? Have you experimented with different types of non monetary incentives?

We haven't experimented with non monetary incentives in SETsale yet, but this is definitely something that we've had some interested in and want to do in the future. So some of our customers have done this on their own. Like they've used in order to supplement a weekly set sail cash contest. Maybe they'll do like a top points for the month. Let's give them a special prize for the team. Whether that be maybe the team with the most points at the end of the month will have a happy hour or can go out for an event or whoever performs the best will get lunch with a senior person at their company. Something like that. Our customers have done things like that just to change up the contest and add a little spark. So that's something that we are. We're interested in doing and might build into our platform in the future.

Nice. And any gift cards. So it's not necessarily a cash transfer, but it's at least a $25 to Olive Garden type thing.

Yeah. So our platform actually will support both. Like a cash card plus gift cards too. You could get both through Set Sail, but we have found that the cash card is most strongly preferred. Or essentially the equivalent you might think of. Like an Amazon gift card is probably one of our most popular ones.

Yeah. The research is mixed there. Right. Because people may prefer it in the moment you say, what do you want? And obviously cash so that I can decide to do what I want with it. But then it's questionable if this is the thing that drives motivation over time. So if I were to pay you $3 versus buy you a coffee, which do you value more? I probably value the coffee at that level. It's possible that if you give me $25 to Amazon, that may be interesting, but if you buy me a purse or a. A new toy for my kid, maybe this is more impactful.

Yeah, I would agree. I mean, I've seen that research too. And that's why it is something we're interested in doing. A lot of times, what we like to. When we talk to some reps, we actually ask, hey, what did you actually purchase with that gift card as well? Maybe to drive that link that you just mentioned. Right. Which is the actual thing as opposed to the gift card. So it's something that I think we will want to explore in the future. We just haven't built it into our platform yet.

Interesting. Are there any psychological tips you'd give anyone to reduce their fear of rejection, which probably goes beyond just sales?

Yeah, I guess, like, don't overthink it would be my main thing. Even, like, to your point, going beyond sales, I think sometimes we spend a lot of time trying to perfect the exact wording on email. And ultimately, like, there is an 80:20 aspect to it that don't overthink it too much. Um, and just put yourself out there.

If you could run one experiment within Set Sail, what experiment or a B test would you run? You have the magic power. Now, what experiment are. Are you looking to. What are you looking to learn?

That's a interesting question. I think one of the things that we've always wanted to experiment more with is how Much compensation or incentive is enough. What's the ideal amount? And so that's something that we haven't been able to do a test for, but something that we definitely would want to if one of our customers is willing to do it with us. So your point? What was the size of the prize? It's a question that all of our customers are curious about. And so if we could actually do some a B tests on it, I think we'd learn a lot.

Nice, that's great. And maybe following back on, people are getting just a clarifying people are getting a $25 prize for one behavior a week or are there multiple behaviors going on at the same time for them to shoot for and win the prize?

So generally we'd recommend tracking three to five different behaviors would be what's most common. So if the focus was on multi threading, for example, we might reward a behavior like reaching out to a new person that you never reached out to before. We might reward getting like up to let's say three engaged contacts on a deal. So even though if multi threading is a goal, we might reward a few steps within that. But we do want to be careful not to reward and track too many things at once. Because once if you're rewarding and tracking too many different behaviors or signals, it can get overwhelming and a rep might lose focus.

Got it. And then any thoughts on quotas and how quotas work for or against most teams?

Sales quotas are very important because ultimately revenue is what leads to companies overall success. The problem or the challenge with quotas is that they're sort of a lagging indicator if the rep is doing, if the rep is doing well. Because sales cycles are often anywhere from three, six, maybe even nine months long. There's a lot of stuff that happens before a deal is won that is important. And so what setsail does is we give visibility into those leading indicators success. We allow sales managers to know where to coach ahead of time. We keep reps motivated during that long sales cycle and that's how we help our customers be more successful.

So don't fully remove quotas, just in addition incentivize weekly behaviors that could drive the quota.

Yeah, especially for a lot of, you know, sales cycles can be long. Right. So there's a lot of work and effort that go in to winning a deal. And what we've shown is by rewarding those important milestones and behaviors along the way, you can increase those and increase the overall amount of revenue that you get at the end. If the only visibility and Incentive comes at the very end of that, then it's easy to lose focus, it's easy to lose motivation. And so by being able to automatically identify progress and behaviors along the way, we can help our sales managers coach and guide their teams. We can help keep reps motivated on the important things, and that's what leads to greater success in the long run.

Okay, last question. So in the very early days of feature films and motion pictures, they would just film from one angle. It was basically a reference point from stage performances. And they didn't really realize that they could move the camera and go on different angles. And so in hindsight, you'd look at that and be like, why didn't you just move the camera? Like just move the camera and be a better film. If you were to apply this to kind of the sales organization or industry right now and look back, what do you think is not obvious to us today, but in the future will be just so obvious and we'll ask ourselves, of course, why didn't we do that?

So I guess what I think we're going to be able to do with sales in the future is give reps and sales leaders essentially real time feedback into how their teams and how their deals are performing. Right now. A lot of the time is spent in one on one conversations and managers are essentially interrogating reps and like what's going on, how they're doing. And through automation and machine learning in the future, reps and managers will to see automatically how each of the deals are doing and be able to respond and improve much faster.

That was Bert Louey. So Sudsale is clearly onto something. Not only have they changed the classic incentive system within sales organizations, they figured out how to drive the right behaviors within that incentive system. In sales, there's an infinite number of things you can try, but sales reps, like all of us, don't have infinite amounts of time. Now with setsale, if they spend time on lower ROI activities, they lose not just the contest, but actual sales themselves. My worry, and this is generic to all sales commission structures, not just set sale, is that we forget some of the basics. Let me explain. Dan Ariely conducted a study at a semiconductor factory in Israel. Reps received messages at the start of the week that promised them specific rewards for assembling a prescribed number of chips each day. One group was promised a well done text message from the boss at the end of the week. Another group was promised a bonus of about $30. A third group was told that they would get a voucher for a free pizza. A fourth group, roughly 25% of the workers, got no message and no offer. What happened? At the beginning of the experiment, things seemed neck and neck, but as the week came to a close, the group that was promised a cash prize fell into last place, performing 13.2% worse than the control group. The winning group was the one that was promised only a well done text and they actually pulled ahead. Why? Imagine you get a bonus each day. It can lose its meaning and start to feel normal or even expected. You might just say I got one yesterday, I don't have to try as hard today. But compliments may have more staying power. Gratitude in general plays a substantial role in our overall happiness and motivation at work. A 2011 review of 50 studies on workplace motivation found that people tend to work harder when they felt like their work was being appreciated, which means that well done doesn't seem so insignificant after all. In hindsight, this may all feel silly obvious, but the tricky part of incentive design is that there are noisy signals about what could work and what may not work. For example, when given a hypothetical choice between cash and non cash incentives, people overwhelmingly choose the cash incentives. But studies consistently show that giving people additional compensation in the form of non cash rewards can be more motivating than cash. A frozen food company changed sales reps compensation plan from a cash and points for merchandise platform to an equivalent cash only plan. Even though the employees reported that they would prefer all cash, their sales dropped by 4.5%. The lesson? Trusting our intuition on this stuff is risky. Experimenting is going to be your best bet in finding out what actually works. The Science of Change podcast is presented by Setsale act on the moments to lead to a sale. Visit them at Setsale co or on LinkedIn to learn more about the world's number one revenue execution platform. If you like behavioral science and want to learn how you can apply it to your work, head to irrationallabs.com we have a variety of courses available. Use Discount code podcast for 20% off this podcast is produced by Irrational Labs and StudioPod Media. Our executive producer is Rachel Roberts. All episodes are written by me, Kristin Berman, and Ying Lin with expert script editing by Jack Buer. Special thanks to Lydia Troup for fact checking and citations.