CompCloud Keynote: Catch the New Wave of the Compensation Revolution
Eleven years ago, Xactly revolutionized the compensation space with the first ever cloud offering. This wave was all about getting our clients off of spreadsheets and onto a flexible, automated system. We consider that push to be the first wave of automated sales compensation management.
The second wave came when we realized that pure automation wasn’t enough; we needed to help organizations motivate employees and make other necessary business changes, and we could do that using data. Our customers are using this data to transform their businesses, and they are seeing enormous benefits. Before implementing Xactly, 52% of the reps at National Instruments were missing their quota, and 19% of their reps were being paid up to three times their target commission. These things clearly needed to be remedied. We helped them to adjust the way they set up their plans, enhance morale on their sales team, and more closely approach a bell curve in payment distribution. Overall, the companies of the S&P 500 that utilize Xactly saw an average revenue growth of 11.4%, while the rest of the S&P 500 saw revenue growth of -3.7%. With these kinds of obvious benefits, it’s surprising to note that 85% of companies haven’t yet automated their incentive compensation management process.
The third, new wave of sales performance management is industry benchmarks, which is reminiscent of how Amazon can suggest books for you based on what you’ve bought previously. These are insights that are actionable, and that’s what we’re seeking to provide our customers around compensation management. The next big innovation in our space is in optimizing plans and in the way we all use data; because it’s not just data, it’s insights that allow you to optimize your business. With this empirical data, you can gain insight into how your comp compares to other peers and industries, and are ultimately empowered to make impactful changes. Our customers can now go toe to toe with Sales Managers and anyone else in the organization armed with empirical, irrefutable payment data with no margin for error. Our data unveils actionable insights such as that the best performing companies only have 5 people credited per deal.
This data driven evolution is underway everywhere you look. Take the home automation industry for example; ten years ago, this industry didn’t even exist. If you wanted to warm your home, you waited until you returned from work and you turned up the dial on your thermostat. With solutions like Nest, you could be on a plane and turn down the heat in your home. Cabrera shared that he’d done just that (much to his wife’s chagrin) in their house. So, automation provides you with new controls and abilities, like adjusting your home’s temperature from a plane. But the key to automation isn’t what it can do, but what it can teach you. The additional value of a system like NEST is its ability to provide you with insights on usage patterns and historical comparisons between current and previous years. This allows users to make more informed choices around heating and cooling their homes, which in turn enables them both to save money and to benefit the environment. Xactly Insights offers a similar benefit; while it’s amazing to implement automated incentive compensation and make your life a lot easier, the value doesn’t end there. The game-changing element comes from utilizing your data to make more informed and strategic decisions.
Every so often, when the seas of change surge, there’s no other option but to ride the wave or risk sinking. Faced with these two options, most people want to ride the wave, but they don’t always know how. This is precisely what Chris Cabrera, the founder and CEO of Xactly, and Jeff Clark, the legendary Mavericks surfer, described to an enthralled audience this morning. Cabrera finished out his keynote by discussing what it takes to truly catch the wave and become a leader during times of transition, and we’re here to pass on many of the insights that Cabrera and Clark shared:
Chris Cabrera: This guy is a pioneer in his space, just as we are pioneers in our space. I thought it would be cool for you to hear from him about what it took to surf that first Mavericks. What in the world was going through your head that made you go swim out there?
Jeff Clark: I had gotten to be a good surfer at that point, and I knew what I was looking at. I knew that the wave I was looking at was really good – but I couldn’t talk anyone else into going out there with me to brave the waves and sharks. I told my buddy to tell the coast guard where he’d last seen me. Nothing was going to stop me from achieving that goal.
Chris Cabrera: You were so perceptive, so driven, and you were using data to find good surf spots.
Jeff Clark: Xactly – no pun intended. When we have surf contests, everyone is on a call sheet to go surfing, and I have to figure out when those waves are going to happen. And Mavericks doesn’t break until they’re 30 or 40 feet. We started using weather data from government satellites to track low pressure systems and wind speed. It was that kind of data, and some basic algebra, that allowed us to figure out if and when the waves would break.
As the pace of change continues to speed up, it’s important to embrace new ways of running our businesses and keep learning about the best way to ride the new waves as they come. Xactly challenges you to think differently, and recognize that data insights can change the game and help you ride your Maverick.
CSO Insights – Sales Management Optimization Study
This report shares key trends and best practices for sales compensation and performance management, as well as insights based on company size, industry, and annual revenue.