Business leaders know that improving top-line revenue is hard. After all, business is competitive and you will need all the help you can get. There are many software platforms out there that ‘claim’ to help you manage your organization’s sales performance. But oftentimes they just end up being yet another administrative or business process management tool that misses the mark on enabling you to achieve your strategic business objectives.
One of the key benefits of an effective Sales Performance Management (SPM) solution is providing data-driven insights that enable Sales Executives and Business Decision Makers to make informed decisions for their sales and compensation strategies. An SPM solution should add value to the decision-making process for any organization that has implemented one. If it does not, it may not be the lack of capabilities in your system but key factors missing from its implementation.
A productive system will allow business decision-makers to determine if the sales of the company are aligning with company goals. This may include exporting data from the system and into a Business Performance Management or Financial Performance Management system to see how it relates to the health and viability of the organization. It should also provide the data these business decision-makers need to understand and make decisions to ensure:
- Compensation plans are attracting and retain quality sales resources.
- Compensation plans are incenting company growth in a manner that is a value add to all parties, including the shareholders.
- Compensation plans are aligned with the business goals.
- Sales efforts are focused on areas where there is the greatest need.
- Sales executives are focusing their time where it’s needed most: product marketing, sales support, etc.
Additionally, a good SPM solution should allow for the auditability and traceability of data, so that existing trends can be tracked from a historical perspective and new trends can be identified. Just because a compensation plan worked 20 years ago, does not mean that it will appeal to or work within the current market. Just because a compensation plan worked a quarter ago, does not mean it will work today. Society changes based on cultural impacts, including things like the recent Covid-19 pandemic. Priorities change in response to economic shifts. Staying on top of decision-making data is critical to making sound business decisions.
A successful system should also provide sales managers the ability to review sales resources’ progress and identify which resources may need additional training or guidance. Keep in mind the success of the sale is not always about the numbers, but about retaining your customers and the ability to train and retain key sales resources. Executive attention into your sales resource’s progress matters.
If you are not utilizing your system to its full potential, then you are missing a large piece of the value of this system. What do you need to be able to utilize your system to start aiding in these key decision areas and even beyond? When we consider the decisions that a sales organization is driven by, then we must consider the viability of the system and the organization. It is critical to define what the Executive team and business decision-makers need to fully utilize a system. This goes beyond understanding only the compensation portion, and into the decision-making process.
Often times new systems are implemented to recreate the current state of your business processes. This approach causes the loss of the true value and potential of what a new and better system could provide. An out-of-the-box system will not meet every business requirement. Therefore, it is critical your implementation partners understand your goals, objectives, and most importantly your business. Your implementation partners should collaborate with you to optimize the solution within your business framework and processes to derive the best value from your flexible solution aligning it with your short-term and long-term company goals.
The goal of any SPM system implementation is to not only provide compensation of sales resources, transparency of plans, and payout information but also to enable strategic decision-making. As a business decision-maker or sales executive, are you getting all you need from your Incentive Compensation Management system? If not, maybe it is time to assess the gaps and take the next steps to close them.
By Susan Major, Senior Consultant, BHG.