New Survey Finds 80 Percent of Companies Aren't Fully Accurate with Sales Compensation Payouts
San Jose, CA—August 16, 2017–– New research released today by Xactly, a leading provider of cloud-based incentive solutions, found that over 80% of companies are not fully accurate with their sales commission payouts. Moreover, the survey found that 18% of companies don’t provide reporting on commission results to their sales reps and nearly half (47%) take four weeks or longer to process incentive compensation payouts. The survey also highlighted that companies using highly complex compensation plans have: a higher rate of rep turnover; lower quota attainment; and more commission payout errors.
“Incentive compensation is one of an organization’s most strategic and powerful weapons. However, if managed incorrectly, it can quickly breed mistrust, demotivate reps and stifle performance,” said Christopher W. Cabrera, founder and CEO of Xactly. “These survey findings validate the need that we see in the market to give reps greater visibility into their variable pay. With improved transparency, along with accurate and timely payouts, companies can motivate reps, build trust, and keep teams focused on selling.”
Survey respondents said that sales compensation represents an average 9.8% of their company’s overall revenue. With this level of commission spend, even a one percent error in accuracy can materially impact the business and cause rep mistrust.
Poor Data Quality, Manual Processes Make Administration Difficult
According to respondents, the three biggest problems for administering sales compensation programs are:
- Limited reporting capabilities (69% of respondents)
- Poor upstream data quality (42% of respondents)
- Highly manual and inefficient processes (30% of respondents)
Additional survey findings included:
- 23% of companies don’t communicate plans and quotas until two months after the start of a fiscal year – dramatically lessening a plan’s effectiveness
- 38% of companies say their analytics and reporting capabilities are insufficient or below average
- Companies with high complexity plans are almost 2.5x as likely to have payment accuracy rates of less than 80% than companies with low complexity plans
Xactly partnered with ZS to analyze the responses and identify trends for the research, which surveyed over 240 organizations in the U.S. To access the complete 2017 Sales Compensation Administration Best Practices Survey, click to download.
ZS is the world’s largest firm focused exclusively on helping companies improve overall performance and grow revenue and market share, through end-to-end sales and marketing solutions—from customer insights and strategy to analytics, operations and technology. More than 4,500 ZS professionals in 22 offices worldwide draw on deep industry and domain expertise to deliver impact for clients across multiple industries. To learn more, visit www.zs.com or follow us on Twitter and LinkedIn.
Headquartered in San Jose, California, Xactly is a leading provider of enterprise-class, cloud-based, incentive compensation solutions for employee and sales performance management. Xactly addresses a critical business need to incentivize employees and align their behaviors with company goals. Our products allow organizations to make more strategic decisions, increase employee performance, improve margins, and mitigate risk.
Our core values are key to our success, and each day we’re committed to upholding them by delivering the best we can to our customers. To learn more about Xactly and the latest issues and trends in SPM software, follow us on Twitter, Facebook, and subscribe to the Xactly blog.
©2017 Xactly Corporation. All rights reserved. Xactly, the Xactly logo, and “Inspire Performance” are registered trademarks or trademarks of Xactly Corporation in the United States and/or other countries. All other trademarks are the property of their respective owners.
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