Powering The Science of Motivation (A Recap of the Sales 2.0 Conference)

Compensation errors can be costly. Hear Xactly CEO's experience as a young sales rep and how he quickly learned the importance of accurate sales commissions.

5 min read

Would you brush your teeth with a toothbrush duct-taped to a blender? This is the question I posed to an audience of sales and marketing professionals earlier this week at the Sales 2.0 conference in San Francisco. I wasn’t being flippant. While many of us are out there selling cutting edge products, we still some how justify motivating our teams with a tool from 1982 (Excel).

Now, I’m not knocking Excel. It’s a great tool. We use it at Xactly every day. But, Excel was not designed for managing the commission payments for a sales team, any more than a blender is meant to safely power your toothbrush. You are creating real problems when you use Excel to motivate your sales team of two or 2,000. The math is too big, the equations too complicated.

The system is too slow to truly reward and actually encourages communication breakdowns. When you try to turn Excel into a sales motivator, you create real business problems. Consider an example I shared in my presentation: Back when I was a sales manager, I was paid $80,000 instead of $8,000. When I reported the mistake, my manager said to me:

Wow, Chris, do you realize we would have never caught that?”

Turns out, my employer overpaid three of us $72,000 each and didn’t realize it. Combined, that’s over $200,000! The good news for my company was that it recouped that particular sum. But imagine all of the incorrect payments they didn’t catch over the years. These kinds of incorrect payments happen all the time. They cost companies millions.

But this isn’t the only cost. Sales people who don’t trust their paychecks aren’t motivated to try for incentives. Why should they if their pay is essentially random? They may even waste time tracking their commissions. But, more and more companies are eliminating the sales roadblocks – like errors – created by running commissions in Excel. When they dump Excel for automation, they tap into the science of human psychology.

Research from CSO Insights and the Aberdeen Group even shows that companies that use new incentive solutions sell more, more efficiently. What these leading companies understand that others don’t (yet) is that the science of effective motivation can be built into incentive compensation tools. To see what I mean, consider these not-so hypotheticals. Would your sales reps be more motivated (and capable) to outperform quota if they:

  • Could track their performance against goals every minute of the day?
  • Knew exactly how much they’ll get if they closed a potential deal?
  • Trusted the accuracy of their payments?

What about your sales managers? Would they be more effective if they could compare sales reps’ performance by:

  • Territory,
  • Product,
  • And margin

All with the click of a button? We all know the power of human motivation. When you ditch the thing that stands between your incentive programs and real motivation – Excel-driven errors – you create a company culture that encourages performance and healthy competition, and accelerated revenue. So why are you trying to force 30-year-old technology to do something that it was never meant to do?