Something Strange in Your Sales Comp Plans? Who You Gonna Call?
The Ghostbusters reboot is mere days away and we are pretty excited. While a 100-foot marshmallow man is pretty tough to top, we can’t wait to see what the all-star cast of funny females comes up against. All these promos and billboards promoting the movie got us thinking about the dastardly elements that haunt our business everyday. For many companies, it’s one big scary monster called spreadsheets.
Not only do spreadsheets lock away data in individual compensation plans, but also from related systems – ERP, CRM, HCM, CPQ – inhibiting organizations from gaining a clear picture of how their company is really performing when it comes to sales.
Moreover, the data trapped in those past plans is likely to come back and haunt them (…remember that guy coming out of the painting in Ghostbusters II??). By automating their sales compensation, companies can avoid getting slimed by integrating and connecting that data. Moreover, they will be open to a new world of sales performance analysis and insight that can inform smarter, more rewarding compensation plans – both for the company and its sales reps.
Once automated, here are three questions you should be able to answer using your historical data to flush out the spooks and specters that may be lurking in your comp plans:
Did your plan motivate sales reps to sell more?
Ideally, you want your reps to receive increased compensation for increased performance. What you do not want to see are groups of “outliers” – reps who are underperforming or cashing in on mediocre effort. By slicing historical sales and compensation data by title, region, vertical market, product, customer segment, etc. you should be able to gain a good understanding of what is causing individual outliers.
Maybe the problem is the result of poor quota setting. Maybe these reps are focusing too much time selling the wrong product mix. You won’t really know until you get granular with the data to uncover the root causes
Did your plan help meet corporate objectives?
You need to know if what you’re doing compensation-wise is actually spurring company growth, and by how much. The answer is in the data, which you want to evaluate by territory, product, and customer segment to see where the real growth levers are, and then use that knowledge to fine-tune your compensation plan. Maybe you aren’t putting enough resources in a high-growth area, or maybe you’re putting too much emphasis on low-growth products.
In addition, evaluate whether special performance incentive funds (SPIFs) helped reach a targeted objective, and if they didn’t, use data to figure out why that was the case.
Did the plans scare off your best reps?
Did you lose overachievers in the past year? Perhaps your comp plan isn’t rich enough compared to the industry. Are reps leaving mid-year? Maybe they’re getting out before they miss their targets, which perhaps were set too high. Historical data can answer these and other questions around rep turnover. It’s also critical to compare how your compensation initiatives compare to best practices across companies of similar sizes and industries. By using empirical data from Xactly Insights™ to benchmark performance and design your incentive compensation plans, you can up level your incentive strategy to build a more powerful compensation process.
Analyzing past sales compensation big data is the best way to really understand how to maximize programs and results. With consolidated and analytics-ready compensation information, you are empowered to unshackle the ghosts of comp plans past and put them back to work to inform better compensation planning.