Incentive compensation is one of the greatest levers you have to align the sales organization with your company strategy. But sales managers can quickly drown in the data that’s needed to design the right plans. Sales reps, the finance department, human resources, and the executive suite all have ideas (and demands) to take into account. A sales manager has to balance the desire for high incentives (which drives motivation) with the desire to remain fiscally responsible.
Now, some sales technology vendors bundle compensation management with territory management, quota planning, and sales analytics. The technology solution for compensation management is generally referred to as sales performance management (SPM), and there are several good options for sales managers to consider.
Varicent is one SPM solution that has been sold to large corporations. But it now offers an on-demand version which would be more suitable to small and medium-sized companies.
Varicent’s compensation management allows users to build and modify complex incentive compensation plans using a wizard interface.
Using the Varicent Composer wizard, users can view and edit graphical representations of calculations and business rules. A recently added a feature called Presenter makes it easier to generate and distribute highly formatted and customized reports.
In addition to compensation management, Varicent SPM includes quota planning, territory management, and sales analytics all in one.
Varicent does not publically disclose its pricing.
Callidus offers another well known solution called Monaco Suite, a comprehensive sales performance management (SPM) system. Sophisticated SPM software for large companies comes with a large pricetag. However, Callidus has announced Commissions Manager, which is aimed at — and priced for — small and medium-sized companies.
Commissions Manager is a claims-based system where sales reps submit their statements of earned commissions for imbursement. It’s very much like an expense management system where you submit your expenses for payment.
Callidus Commissions Manager enables companies to set up compensation plans that include quotas, on-target-earnings and rate tables to pay commissions on a per-transaction basis or on year-to-date attainments. It is a self-service solution that allows sales representatives to initiate requests for credit and payment on closed opportunities.
Sales reps can calculate commissions on closed opportunities using the plans that have been assigned to them building trust in the process and system. The payment requests are then automatically routed to their manager via a configurable workflow. Approved payments are tied back to the opportunity and can be exported to financial or payroll systems. Reps are able to track their commissions more closely which lets them have more insight into how they will get paid.
Sales reps can also track their deal status and projected commissions, initiate claims for credit and payment on their closed deals and then track the status and amounts of paid and pending commissions, all as part of their day-to-day opportunity management.
The price is $50 per user per month.
Xactly is also a large player in sales performance management (SPM). At Dreamforce, the company announced its small- and medium-sized business program called Incent Express. It runs on Salesforce.com and it allows those CRM users to create sales compensation plans, calculate commissions and export payments to payroll, all from Incent Express.
You can base plans on custom criteria, such as deal amount, product margin, product mix, discount percent or non-cash values (like hours or quantity of deals). And because it runs on Salesforce.com CRM application, it allows users to calculate incentives using up-to-date information about accounts, people, products and opportunities.
One great feature for sales management is the ability to play out different compensation plan scenarios prior to implementation so you’ll know which will fit within your budgets, helping to avoid future surprises with over-compensation.
Xactly does not publically disclose its pricing.
Motivator Pro is a self-service sales compensation management system. It’s a Web-based system designed for easy use even by people who have never designed variable compensation plans before.
Users are guided step-by-step through an on-screen wizard. You can even start using one of the built-in sample plans. After entering your data into the planning wizard, use the system’s visual tools to bring your sales compensation plans to life. Review the details of an individual plan or compare plans side-by-side. Graphically view payout at any level of attainment to ensure there are no surprises. Adjust the mix of base and incentive pay until you get it just right. Even compare this year’s projected compensation to last year’s payout for each individual.You’ll clearly see the impact of every change you make — at a glance.
When you’re ready, it’s a snap to generate clear plans for every member of your team. Publish PDF documents that graphically communicate goals and rewards at any time of the year so your sales reps know where to focus their efforts. When you’re ready to calculate payments, Motivator Pro loads your transaction data to determine who gets credit then it calculates the payments. Motivator Pro uses the same calculation rules you created during planning to automate crediting and payment calculations.
Makana Solutions no longer publishes its pricing on its Website. When we last obtained pricing in May of 2009, the cost was $19 per month per account.
Nancy Nardin founded Smart Selling Tools after a prestigious career in high-tech and IT market research sales. She is considered the leading expert on sales productivity tools.