This document discusses how sales compensation management can drive business performance and profitability. It states that sales compensation management enables companies to align salespeople, channel partners, and other groups with corporate strategy. It also allows companies to influence key metrics like revenue, product sales, customer profitability, and overall business performance. The document provides examples of how sales compensation plans can be tailored to encourage specific behaviors that impact profits, such as reducing discounting, minimizing channel conflict, promoting strategic products, and selling optimized product mixes. It argues that sales performance management automates compensation administration, ensures incentives are tied to strategy, and helps companies evaluate how incentives influence business results.

1. FROM STRATEGY TO PROFITABILITY:
HOW SALES COMPENSATION MANAGEMENT DRIVES
BUSINESS PERFORMANCE
BY LESLIE STRETCH
PRESIDENT AND CEO CALLIDUS SOFTWARE INC.

2. SALES COMPENSATION MANAGEMENT
Enables organization to effectively align sales,
channel partners and other constituents to carry out
corporate strategy

3. SALES PERFORMANCE MANAGEMENT
 Automates the administration of incentives.
 Ensure frontline people and decision makers have
visibility into performance.
 Means for influencing sales growth, product
services, customer profitability, sales margin and
business performance as a whole.
 Efficiently align constituent’s activities with
corporate strategy and shareholder value.
 Gain control over the execution of strategy.
 Supply advanced business analytics and tools.

4. TARGETED CONSTITUENTS
• Potential for driving profitability
• Difficult to manage as more close to
customers than organization
Sales
Force
• Independent agents, brokers, distributers
or resellers
• demand and closing deals
• Improve sales coverage, market
specialization and profitable growth
Channel
Partners
• Not of top priority
• Effects line worker to senior executives
Non-sales
Employees

5.  Activities That Affect Profitability:
 Sales activities and product related activities—vary by individual and business
function.
 SPM ties incentives to each activity that can affect profitability.
 Sales
 Top-line metrics such as revenue, unit sales and territory growth require specific
ground level sales activities related to products or services sold.
 SPM drives the behaviours that affect sales results.
 Eg-SPIF(sales promotion incentive funds)
 Products
 Control of product sales at a granular level means organizations can weight incentives
to favour a specific product, service, product mix or product/ services mix.
 SPM helps organizations control new product sales, revenue growth in targeted product
lines, cross-selling, the combination of products and services sold.
 Customers
 Organizations can motivate salespeople to focus on certain aspects of the customer
relationship or serve customers in a specific way.
 An organization links rewards to customer satisfaction, customer retention or customer
profitability.

6.  Profits
 Price discounting, sales margin and account profitability all affect net profit results.
 Situations vary widely as to how profits are derived from products, services and customer
relationships.
 Collaboration
 When sales team and/or channel interactions are complex, SPM can motivate individuals to
collaborate more smoothly.
 Team selling and team performance can be powerful momentum builders with the assistance of
SPM.
 Business Performance
 With SPM, incentives can help drive the achievement of predetermined business objectives,
improve productivity and throughput, encourage adherence to quality standards, limit defects,
streamline inventory management and more.
 Structuring Incentives
 Sales incentives can range from commissions, bonuses or a percentage of sales revenues to more-
complex rewards.
 Channel incentives are similar to sales incentives. Channel partner rebates, discounts and market
development funds are also effective.
 Supplier incentives might include payment accelerators or improved payment terms for a new
supplier who satisfies certain service-level agreements.
 On the employee side, incentives can include bonuses, salary increases, stock options, management-
by-objective rewards and more.

7. FOLLOWING 4 SCENARIOS SHOW HOW SPM:
Transforms Common
business problems
To generate dramatic,
ongoing results
By modifying aspects of the compensation plan
using SPM

8. SCENARIO 1:REDUCING DISCOUNTING

9. SCENARIO 2 : MINIMIZING CHANNEL CONFLICT

10. SCENARIO 3 : STRATEGIC PRODUCTS

11. SCENARIO 4 :SELLING THE OPTIMIZED MIX

12. BENEFITS OF SALES PERFORMANCE MANAGEMENT
Automates
compensation, gives
administration
control and
awareness on
several levels.
Ensures that
incentives are tied
to actual strategic
goals and derive
tangible results.
Essential weapon for any
forward thinking
organizational’s arsenal,
aligns behavior to
corporate objectives and
shareholders value.
Evaluate how
successfully incentive
drove behavior ,
direction for fine
tuning the plans

13. Flexibility- provides ability to go backward and
forward in time and make changes where needed.
End to end automated solution that integrates
with existing systems and encompasses all
phases of the SPM cycle
Modeling- empower organizations to forecast
results by creating what if scenarios, improves
accuracy and predictability

14. THANKYOU!

15. QUESTIONS ?