1 in 12 Sales Commissions are Wrong – Are you the one?
Nobody wants to be “that person,” the Goofus to our Gallant, the Amelia Bedelia of the story, our own personal Jerry/Larry/Terry/Barry/Garry, if you watch Parks and Rec. No one wants to be the one who gets it wrong, but if you’re calculating your sales commissions on anything other than an automated system, chances are you could be that one in twelve. Let’s take a look at what it means to be the one, and figure out how to keep you off the office gag reel.
Coast to Coast
Every year, your organization has to allocate a sizable amount of money to cover sales commissions – this amount naturally varies by industry, company size, and forecasting if you’ve got a system equipped to provide you with such insights. But we’re talking about homegrown, spreadsheet systems here, so let’s assume it’s best guess benchmarking, and not predictive metrics. If you think commission spend is big at your company, consider that every company in the country, is doing the same, to the tune of roughly $638 billion. What may already seem like a sizable number in house is truly staggering in aggregate, and as such, the impact of error is also pretty stark.
The Hidden Cost
If one out of every twelve sales commissions is wrong, whether that be human error, manual entry error, or spreadsheet comparison error, that means that of the $638 billion, 1/12th of it is subject to errors. Let me do some quick math here and tell you that roughly 52 billion dollars is subject to error. Some companies may be able to eat that damage for a little while, but most companies would be crippled by consistent erroneous loss like this, and no company could hold out forever with this kind of hidden loss. But these are still big numbers, and people have a hard time visualizing the magnitude of such numbers, even if they can easily comprehend the core concept. You may realize that $52 billion is a wild number to subject to error, but you may not know what exactly you could do with that.
If I had a Dollar –
This is where we decided to have some fun trying to digest these hefty sums, because it was important for us to make those impossibly large numbers tangible. So next time you go to input sales commissions into a spreadsheet, just remember that with the money we’d all save by switching to an automated sales performance management system, you could run 30.6 full bipartisan presidential campaigns.
Not one for politics? Well, next time you get ready to utilize your homegrown system, and pray that all your payments are issued correctly this time, remember that your drive to work could have been a little cushier had you implemented a single source of truth for your data and payment information; with the money you’d protect, you could buy yourself a fleet of 260,000 Tesla Model S’s.
Maybe you’re more about the experience of life over the experience of the road. Well then let me tell you about the party you could have attended if you’d ensured all your sales commissions were correct, and protected that $52 billion. Because Beyoncé was there, 26,000 times to be precise. Oh yes, we used that money to book Beyoncé to sing at our hypothetical party because we leveraged our mobile platform to reduce shadow accounting and ensure trust in the numbers.
So, when it comes to sales commissions, 1 in 12 might not seem like a big number; but as we’ve seen, those numbers can add up fast. Your company needs to be protected on this core front if you want it to grow and thrive. So the question is, are you the one?
Moving from Traditional Licenses to Subscription (SaaS) – Better Sales Comp Practices
Sales compensation is a strategic business tool - no matter how you slice it. However, this is never more true than when you are making a dramatic shift within your company. Moving from traditional licenses to a subscription model is one of these shifts. With over two decades of industry experience, Clinton Gott of Better Sales Compensation Consultant is ready to share what he sees as the most common concerns companies voice when moving from a traditional license model to SaaS.