While at Dreamforce 2017, Gary Cottrell, Director of Strategic Solutions at Xactly, sat down with Ely Lai, Sr. Director, Global Compensation at DocuSign to discuss how the digital transformation company leveraged sales compensation as a revenue engine.
This interview explored how organizations can apply data-driven intelligence to all aspects of their compensation strategy. Working closely with Xactly, DocuSign was able to integrate its core compensation system with advanced analytics and modeling to gain a new level of insight into what drives performance and motivates reps.
The session itself highlighted how tuning-up four key components in compensation plans work to deliver better business results.
On Increasing Efficiency
When asked what compensation challenges DocuSign was looking to solve, increasing efficiency stood out as a particular area of focus. At first, Lai wanted to implement sales comp technology to automate and ensure accurate calculations and payments in a timely manner. Today, the way the tool is used has moved far beyond first-line efficiencies to overcoming the challenges of audit requirements, staying competitive, and increasing responsiveness. All in real-time, of course.
On Analyzing Sales Comp Data
For Lai, the analytics that needed tracking ranged from attainment by rep to spend across the company and region to total variable spend against target SPIF performance. When analyzing this data, the right numbers can reveal a lot about the health of your comp plan. For instance, Lai pointed out the following:
- When you look at pay as a percentage of attainment, you want to understand the outliers. What is causing overpayment or underpayment? Common causes are due to new hire ramps, if you have put in caps, or if there were wrong assumptions in planning.
- When you analyze the total spend against your original cost model and see discrepancies between actual numbers and the plan, there needs to be an additional review of performance and expectations.
- By reviewing total earned numbers under each component against total expected earned, critical insights can be gained. For instance, this data can reveal flaws in the plan design—such as if certain reps are being overpaid for low performance.
Transforming the Business
The plan design phase at DocuSign starts like it does at many other companies. First, sales leaders are interviewed to understand the sales strategy for the following year. This sets the tone for informing FP&A on the sales compensation budget and design. Moving into the plan design stage means Lai takes on three comp pillars.
- Benchmarking: Benchmarks against industry and competitors provide a very holistic view of how to keep a competitive edge in the market. Comparing the overall variable cost and pay rates of sales in the market is vital to success.
- Modeling: Using historical data and performance to look at the cost of sales by role, market segmentation, and regions produce a baseline for modeling the plan. This is particularly helpful when needing to make trade-offs in regards to what incentives to fund.
- Plan Changes: Surprisingly, many companies do not change their comp plan every year. But for DocuSign this has been best practice. Each year during the planning process, incentive plans are realigned to complement the goals of the company.
Central to DocuSign’s revenue engine is the commitment to enabling growth. This progress starts with a partnership between sales leadership and the comp admin team. With both teams working closely guidance and support can be easily provided—ensuring the organization keeps growing!
This eliminates an “us versus them” mentality and encourages an environment where complex issues can be openly discussed and solved. DocuSign proudly does this across all of their functions: finance, sales, and rev-ops. And at the end of the day, it's this perfect mix of tools and people that enables DocuSign to focus on the initiatives that matter most to its business.