Moving Beyond Automating Comp
Are you considering a compensation solution and wondering what else you should be looking for? Or, have you taken the leap to automate your compensation processes, experienced the benefits, and are now thinking about what’s next?
Continuous improvement is the only way forward in your increasingly competitive environment. Gains in sales execution and operational eﬃciency can make the difference in your company’s continued quest to one-up last year’s performance, gain market share, and drive revenue.
For Vodafone, it was clear that they needed to do more than automate their compensation processes.
In the early days of using Xactly, automation was the first key initiative. We wanted to use the platform to reduce processing time and easily introduce more complex plans while maintaining accuracy.” The second phase of Vodafone’s use of Xactly changed the focus to plan enhancements that would drive specific rep behavior that was tied to company goals.
Automating the incentive compensation process saves our customers time, enhances efficiency, and significantly reduces shadow accounting. Even more importantly, sales ops transitions from being tactical to strategic. These benefits in comp lead to the question of what next? Where else can we automate? What other parts of the sales organizations would benefit from this transformation?
Working with industry-leading customers such as Salesforce, Cox Automotive, and Big Network System, over the past 15 years, Xactly recognized it was only solving a small piece of the puzzle. Getting compensation right is imperative, but there are decisions that happen before and after the creation of a comp plan that makes the difference between having a great year or completely missing your targets.
According to Salesforce, 57 percent of sales reps will miss their sales quota this year. For an enterprise of 5,000 sellers with $100,000 quotas, imagine that the 57 percent only hit 50 percent of quota. That’s an astounding $142.5M lost in potential revenue.
There is an ecosystem that exists around incentive comp—finance, sales ops, and sales are partners in the success of the organization and own interdependent pieces. Our answer to what’s next? Take into account each step that is involved in enhancing your sales performance.
Determining the Next Step
What’s next is collaboration, and that happens with unified systems that encourage cross-team communication, transparency into performance, and the actions needed to make informed decisions on the next best step. It means looking beyond comp and having conversations about the factors that contributed to the comp plans created, the teams that have been put together and the insights that can be drawn as the year proceeds and reps hit or miss their targets. At Xactly we’ve embraced the concept of Sales Performance Management (SPM).
Sales performance management (SPM) software comprises tools and process functions that automate and unite back-oﬃce sales processes. It is implemented to improve sales execution and operational eﬃciency.
Planning is foundational to SPM and building compensation plans that are realistic. Finance shares the targets with sales ops, and sales ops, along with sales leadership, manages a number of different data points, spreadsheets, and stakeholders to determine the best plan of action. A mix of gut-feel and countless hours of perfecting formulas leads to the creation of a plan that is then unfortunately, barely consulted as the year progresses.
Real-time visibility into when you are sliding away from the original plan is critical in making the proactive decision to return to a path of high growth. Not making the right decision at the right time could lead to a less than ideal year, either moderate growth, or worse, a decline.
At Xactly, our SPM Value Chain purposely reflects the connected and continuous nature of an integrated approach to sales performance management.
There is no right way to start evolving beyond comp. We also started with incentive compensation to manage our internal teams, but it's now time to look beyond and recognize your organization needs more than an automated comp solution. You may be ready to automate the planning process or you need to look for ways to optimize your comp plans. Below we share with you our own story as well as two of our customers as they started to evolve their approach beyond incentive comp and embrace sales performance management.
Guiding Our Customers Beyond Comp
Don’t have time to read the whole post, but want to learn more about specific customer experiences? Check out these customer stories.
Cox Automotive Automates Comp and Then Turns to Territory Planning
Cox Automotive, one of the largest global automotive enterprises, was spending the bulk of their time manually integrating data and calculating compensation for their growing sales team. Not only did this limit visibility, but it also prohibited them from looking at their data more strategically and designing programs that would inspire performance across the sales organization.
Automating comp helped Cox’s sales organization save approximately 7,200 hours per year but more importantly, their sales ops team identified the opportunity to evolve their archaic territory management practices.
It’s more than calculating commissions…it’s inspiring a sales team to be the best they can be. We use Xactly to inspire this performance.
Compensation had been automated, but Cox was still hand-drawing their territory maps. This manual territory management process was tied to their compensation processes and was disconnected from the realities of their workforce and causing frustration and delays. With a proper territory optimization tool in place, accounts were distributed for maximum impact, and sales managers now had the visibility needed to quickly adapt to new information and changes in the sales team.
Additionally, changes in territories could now be automatically aligned with a need to change comp plans. Cox’s sales ops team can now view their data more strategically and design plans that are better aligned with territory assignment to inspire better performance across the sales organization.
Dig deeper into the details on Cox Automotives Evolution through their six-part blog series on Creating a world-class sales operations organization.
For Cox Automotive, the right next step was looking at enhancing territory planning but that may not be right for your business. For Big Switch Networks it was looking at ways to better leverage data to build best in class comp plans to inspire their team.
Big Switch Networks Turns their focus to Benchmarking After Automating Comp
Automating comp was table stakes for Big Switch Networks. The goal wasn’t just sales ops efficiency; it was greater transparency into the sales team to attract and retain top sales talent with competitive sales compensation plans.
Benchmarking data can turn planning from a game of darts into a data-driven, credible, and scientific process. Big Switch Networks used benchmarking to ensure the plans being built were competitive in their industry. And automating comp allowed them to keep a close eye on sales rep behaviors to ensure on-track development.
Having a data set of industry comp plans that is consistently updated and can be tracked and monitored was really important for Big Switch Networks. We’re in growth mode hiring tenure and new reps, it's important to get it right and recognize the comp that needs to be put in place to motivate reps at different levels.
Whether you start with improving how you plan or accessing additional benchmarking and analytics data to enhance incentive comp, the important part is that you start. We’re not just guiding our customers on the path to evolve beyond comp. We are doing the same at our own company because we recognize it's imperative in continuing to enhance our sales performance and remain competitive.
Xactly’s Crawl, Walk, Run Approach to Evolving Beyond Comp
At Xactly, we use every product across our finance, HR, sales ops, and sales teams. It wasn’t an overnight transition. We also had to identify where the next best place to automate and drive cross-team collaboration was. Xactly’s Assistant Controller, Tom Stehno, advocated for automation of commission expenses. Tom had no visibility into Xactly’s compensation plans or how the company calculated commissions. The accounting team would manually have to source commission information and then transpose it for their systems.
Automating commission expense allowed for seamless integration with incentive comp. Beyond now being able to easily access commission data and reduce potential accounting errors, Tom can now see who was commissioned at a specific rate at any time and work more collaboratively with sales and sales ops.
After establishing a streamlined approach to comp, we turned our attention to capacity, quota, and territory planning. Patrick Hart, our VP of Financial Planning and Analysis and Clark Green, VP of Sales Ops, collaboratively initiated a process to automate our entire approach to planning.
Captured in this webinar, Patrick and Clark discuss their approach as well as the impact of embracing an automated approach to planning. Not only have they improved operational efficiency, but at Xactly, we are now able to work collaboratively with sales leadership to proactively pivot to changes in productivity, market fluctuations, and ward off sales rep attrition of our top reps.
Marc Gemassmer, our Chief Sales Officer notes, “If you don’t have sales planning right, your team is already on the defensive before the season starts. If you haven’t hired at the right pace, you can’t accommodate quota capacity. If territories aren’t balanced, you could be missing potential sales opportunities. If quotas are unfair or unachievable, you negatively impact your team’s morale and risk losing top performers. All of which hurts your ability to hit your numbers.”
Interested in reading more? Learn more from our Xactly’s Chief Sales Officer Marc Gessmaer in his blog series on Sales Planning.
Embarking on the SPM Journey
The SPM path varies for every customer. The days of only focusing on automating comp are over. Success is achieved by looking at every aspect of the systems and processes connected to sales performance. Regardless of the path chosen, it's clear the benefits our customers are experiencing by evolving beyond comp, and it also highlights the continuous nature of the process. Technology isn’t enough. It's important to bridge the gap between people, process, and mindset.
We are your partner in offering a solution that maps to your organization's unique needs. Through our strat services, implementation, and customer success teams, our orientation is helping you navigate and figure out what’s next to help take your company to the next level that makes sense for you.
Our goal is to arm you with a solution that enhances your ability to make informed decisions through increased team collaboration, real-time data updates, and a single source of truth to determine when a pivot is needed or when to double down on current practices. Xactly is here to help as your partner to guide you as you start to evolve beyond comp.
Ready to get started? Take our SPM assessment to kick off your discovery of the next best step.
Not sure what to consider when looking beyond comp? Check out our blog, A Guide to Data-driven Sales, that looks at each part of sales performance management and the questions that can be easily answered as you automate.