Sales Compensation: Trends, Tools, Analytics, and Solutions for the Emerging Environment.

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Sales compensation plays a crucial role in sales force execution and growth, especially as companies seek to emerge from the market stall. In this Sales Management Association webcast, two sales compensation experts will examine current trends and best practices among firms utilizing sales compensation in today’s challenging environment.

In this Sales Management Association webcast, Ted Briggs, Principal at Better Sales Comp Consultants, and Brian Hartlen, Vice President Marketing for Varicent Software present insights in the following areas:

- Trends in sales compensation design, implementation, and management;
- Sales compensation program governance;
- Tools and solutions that improve sales compensation;
- Standard and advanced analytics to increase return on your sales compensation expenditure;
- The impact of Sales Performance Management, and emerging discipline driving innovation and productivity among firms utilizing incentive compensation; including
- Best practice case studies of Sales Performance Management in Fortune 1000 companies.

This abridged presentation is provided as a preview. View the original webcast in its entirety and download the complete slide deck at the Sales Management Association's Member Resource Library.

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Sales Compensation: Trends, Tools, Analytics, and Solutions for the Emerging Environment.

  1. 1. Sales CompensationTrends, Tools, Analytics, and Solutions for the Emerging Environment<br />Ted Briggs<br />Principal<br />Better Sales Comp Consultants<br />Brian Hartlen<br />Vice President Marketing<br />Varicent<br />November 24, 2009<br />© 2009 The Sales Management Association <br />
  2. 2. The Sales Management Association<br />Visit Us Online at www.salesmanagement.org<br />A global, cross-industry professional association for sales operations and sales management.<br />Focused in providing research, case studies, training, peer networking, and professional development to our membership. <br />2<br />Copyright © 2008 - 2010 The Sales Management Association. All rights reserved.<br />
  3. 3. Learn More<br />The Sales Management Association<br />This abridged presentation is provided as a preview. <br />Sales Management Association members may access the presentation in its entirety, and download copies in PowerPoint format, at the Sales Management Association website: www.salesmanagement.org.<br />Consider joining The Sales Management Association, the premier professional association for sales management and sales operations professionals.<br />3<br />Copyright © 2008 - 2010 The Sales Management Association. All rights reserved.<br />
  4. 4. Today’s Webcast<br />Agenda<br /><ul><li>Governance
  5. 5. Plan Development
  6. 6. Plan Management
  7. 7. Sales Compensation Analytics
  8. 8. Basic
  9. 9. Advanced
  10. 10. Leveraging Information Technology
  11. 11. Today’s Environment
  12. 12. Role of Technology
  13. 13. Sales Performance Management</li></ul>4<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  14. 14. Sales Compensation Governance<br />What Does it Mean?<br /><ul><li>It’s a common sense look at how sales compensation plan decisions are made and how they are managed…
  15. 15. Who performs which tasks?
  16. 16. Under what timelines?
  17. 17. Under what philosophy or direction?
  18. 18. With which degrees of authority?
  19. 19. Good sales compensation governance gives stakeholders peace of mind that plan decisions are made…
  20. 20. Wisely
  21. 21. Strategically
  22. 22. With everyone’s understanding and buy-in</li></ul>5<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  23. 23. Sales Compensation Governance<br />Plan Development and Plan Management<br />6<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  24. 24. B. Define Clear Ownership<br />Where Responsible Resides<br />Sales Strategy Formulation<br />Job Role Definition and Application<br />7<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  25. 25. Plan Analytics<br />The Basics and Beyond<br /><ul><li>You are most likely aware of the “usual suspects” in terms of compensation plan analytics
  26. 26. Can provide great value
  27. 27. Serve as the foundation to any analytical program
  28. 28. But companies now more than ever are focusing on next level analytics for better sales compensation and better sales effectiveness
  29. 29. Headcount planning
  30. 30. Quota setting
  31. 31. CCOS-based segment analysis</li></ul>8<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  32. 32. Next Generation II – Quota Setting<br />Leveraging Market-Based Information<br />Categorizing Accounts<br />Applying Growth Rates<br />Reconciling Bottom Up and Top Down<br />Market-Based Information Driving Account Level Goals<br /><ul><li>Incorporating more inputs, more stakeholders, and greater effort
  33. 33. Understand the particular growth rates by industry segments, geographies, and account types
  34. 34. Better aligning sales and marketing groups
  35. 35. Categorizing accounts
  36. 36. Ability to identify growth rates by account type
  37. 37. Applying the appropriate market-informed rates to each account
  38. 38. Comparing account driven growth rates versus top down estimates
  39. 39. Further analysis to close gaps</li></ul>9<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  40. 40. Sales Compensation Trends<br />Recovering from the Economic Crisis<br /><ul><li>The last twelve months involved companies making many fast-paced (hasty?) and challenging (short-sighted?) decisions
  41. 41. Sales cuts and pay reductions may have compromised the role and perceptions of the sales team’s value
  42. 42. Unraveling the changes made will take time, particularly as the economy still limps forward but is poised for recovery
  43. 43. We need to transition from “what the heck happened” to “what now”? </li></ul>10<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  44. 44. Compensation Design ElementsWhat ‘s Under Consideration?<br /><ul><li>Eligibility
  45. 45. Ranges and Structure
  46. 46. Incentive Mix *
  47. 47. Upside *
  48. 48. Performance Measures *
  49. 49. Performance Targets
  50. 50. Crediting
  51. 51. Plan Mechanics *</li></ul>11<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  52. 52. Poll Question 1 <br />Incentive Mix<br />As it relates to base-salary/at-risk ratios (incentive mix) our company has acted or is considering:<br />As it relates to base-salary/at-risk ratios (incentive mix) our company has acted or is considering:<br />30%<br />Increasing At-Risk Pay<br />Increasing at-risk pay as a percentage of target compensation<br />Decreasing at-risk pay as a percentage of target compensation<br />Not made or considering any changes to base/incentive mix levels<br />Decreasing At-Risk Pay<br />14%<br />56%<br />No Change<br />12<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  53. 53. Poll Question 4<br />Plan Mechanics<br />As it relates to plan mechanics our company has acted or is considering:<br />As it relates to base-salary/at-risk ratios (incentive mix) our company has acted or is considering:<br />Substantially Changing<br />10%<br />As it relates to plan mechanics, our company has acted or is considering:<br />Substantially changing our plan mechanics<br />Moderately changing our plan mechanics<br />Only tweaking our plan mechanics<br />Not making any changes to our plan mechanics<br />Increasing at-risk pay as a percentage of target compensation<br />Decreasing at-risk pay as a percentage of target compensation<br />Not made or considering any changes to base/incentive mix levels<br />Moderately Changing<br />30%<br />44%<br />Just Tweaking<br />17%<br />No Change<br />13<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  54. 54. Today’s Challenges<br />Slow Rigid Error Prone<br /><ul><li>Inability to look at the impact of recent, or planned changes
  55. 55. Inability to implement new plans quickly
  56. 56. Managing overpayments and errors
  57. 57. Sales creates its own ‘shadow accounting systems’
  58. 58. Challenged to meet audit and compliance requirements
  59. 59. Inability to model/analyze effectiveness of incentive spend
  60. 60. Too much time and effort to administer and maintain incentive compensation processes
  61. 61. Payment disputes consume significant time & effort
  62. 62. Limited ad-hoc reporting & analysis capabilities
  63. 63. No ‘tight’ links between incentive pay, sales territories, quotas and business metrics </li></ul>14<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  64. 64. Focusing on Good Business<br />Revenue<br />Cost of Sales<br />15<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  65. 65. Sales Performance Management<br />
  66. 66. Sales Performance Management Dashboard<br />
  67. 67. Sales PerformanceManagement<br />18<br />© 2009 The Sales Management Association, Better Sales Comp Consultants, and Varicent <br />
  68. 68. Learn More<br />The Sales Management Association<br />This abridged presentation is provided as a preview. <br />Sales Management Association members may access the presentation in its entirety, and download copies in PowerPoint format, at the Sales Management Association website: www.salesmanagement.org.<br />Consider joining The Sales Management Association, the premier professional association for sales management and sales operations professionals.<br />Copyright © 2008 - 2010 The Sales Management Association. All rights reserved.<br />
  69. 69. About The Sales Management Association<br />www.salesmanagement.org<br />The Sales Management Association is a global professional association for sales management and sales operations. The SMA fosters a community of interest among sales force effectiveness thought leaders, consultants, academics, and sales management practitioners across many industries.<br />Through training workshops, online resources, and research materials, The SMA addresses the management issues of greatest concern to members. The SMA’s focus areas include management leadership, sales force performance coaching, sales planning, sales process management, enabling technologies, incentive compensation, and sales force support.<br />© 2009 The Sales Management Association<br />

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