From Pizza to Path for Transformation: Steps to Reinvent the Sales Comp Process Blog 2 of a 6-Part Series
Following Cox Automotive on their journey to creating an unstoppable sales force, OpenSymmetry and Xactly uncover how Cox Automotive kicked off the process to get from grueling late nights in the office for sales compensation payout cycles to sales compensation efficiency and success in part 2 of our 6-part blog series.
How did a call to order pizza turn into a wakeup call for Cox Automotive’s sales operations leadership team?
A local pizza joint around the corner from the Cox Automotive headquarters had the sales compensation team’s customary order memorized because the same order was placed like clockwork – at 11 PM the night before commissions were issued. This was when the team would manually calculate and recalculate commissions into the wee hours of the morning.
The pizza wakeup call reinforced what had already been revealed in Cox Automotive’s Global People Survey (and what was covered in the first blog in this series — it was time for a change to their incentive plan and quota management. The 60 to 70-hour workweek for their sales compensation team could not continue.
Faced with the reality of dissatisfied sales and sales comp teams, unreliable data coming from multiple sources, and antiquated manual processes, Cox Automotive was at a crossroads. While they knew their current incentive plan and quota management process needed to be homogenized and simplified, Cox Automotive admittedly didn’t know how to move forward.
With several data sources including weekly projection reporting, Xactly Incent for commissions data, and Salesforce for sales data, there were information gaps that manifested in constant adjustments to get the right commission amounts. The accuracy rate sat at 92-93%, which meant that a lot of dollars were constantly on the move in the 7-8% error margin. Unsure if they were faced with a technology problem or an implementation issue, Cox Automotive needed an outside source to objectively help address their challenges.
Identifying the Experts
The first step in the process was to identify the experts in the field. Committed to not building a plan for change in a silo, the Cox Automotive team sought guidance from sales compensation experts. This led Cox Automotive to connect with OpenSymmetry, a leading implementer of Sales Performance Management (SPM) technology. OpenSymmetry brought an impartial perspective of the available technologies in the incentive compensation space and was able to confirm that Cox Automotive’s existing technologies, if configured correctly, could not only solve their challenges but put them on the road to becoming a world-class sales operations organization.
At Xactly’s annual CompCloud conference, Cox Automotive, OpenSymmetry, and Xactly joined forces to define and evaluate Cox Automotive’s core competencies and create a plan to configure their existing tools to reach their desired future state. With 40 different compensation plans for over 200 people, and a small but mighty team of 10 compensation specialists pushing a million transactions every month, the stakes were high in ensuring that this plan for change would succeed.
With some initial examination, it was uncovered that as Cox Automotive experienced rapid growth and change in the sales organization, the processes built within the Xactly toolset had not kept pace to meet their evolving needs, though the technology was fully capable. Cox Automotive needed to assess and articulate the newly desired end goals with the sales team and determine how to optimize the Xactly toolset to get there.
Articulating the Current State
To tackle the huge endeavor of changing the sales compensation process, the first priority of the leadership team was to get a clear view of the current state of sales compensation and define the problem as encompassing more than just quota and commission, focusing on the root of the commission calculation issues rather than output alone.
The Cox Automotive team hashed out a list of pain points – among them were lack of visibility, use of spreadsheets to recalculate numbers from the tool, multiple sources of data, and an unmanageable number of adjustments to commission payouts. After that, they needed to define a new vision for their team and processes, identify the root causes of current problems, and build a roadmap for change.
Creating a Roadmap for Change
The final step was to create a roadmap for change. Senior Director of Sales Operations for Manheim, the largest subsidiary of Cox Automotive, Justin Ritchie formed a research committee to evaluate each area of the compensation process against internal corporate goals as well as industry benchmarks to create priorities for the change process. Taking a “crawl, walk, run” approach, the phases for change were mapped out and ranked in order of greatest pain or greatest possible impact to the teams.
The compensation process involved several software vendors, so it was crucial for OpenSymmetry, ultimately responsible for executing the roadmap, to maintain a high-level view of the process so that each piece of technology could be effectively integrated into the process end-to-end, from territory management and compensation to reporting and performance management.
With the problems defined, a future state in view, experts on board, and roadmap in hand, Cox Automotive was on their way to becoming a world-class sales operations organization with an unstoppable sales force. In subsequent blogs, we’ll walk through the people element of the plan – how Cox Automotive gained buy-in from everyone in the sales process, from executives to end-users – as well as tell the story of how “the plan” came to life to ultimately achieve higher visibility, faster decision making, and agility in the sales team for growth.
The icing on the cake? A commissions payout accuracy rate of 99.9%. Subscribe above to get blog 3 of this series and more delivered straight to your inbox!
Complete Guide to Sales Team Compensation
Putting together your sales team requires you to consider the specifics of each person’s tasks, how those responsibilities move the team toward the given goal – and how to properly compensate each member.