Sales Webinar | Hunters, Farmers and Comp Plan Design


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Learn how to best divide sales so you can conquer the market with Xactly expert Erik Charles. Review different roles, when you need them and how to reward them so they are motivated to improve your bottom line.

Published in: Business, Technology
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  • Incent right. Sell more. That simple principal is at the core of everything we do at Xactly.
  • Set Territories based on zip codes, area codes, named accounts, vertical markets, company size)Check industry databases to ensure that there are enough opportunities in each territory.Not everyone makes quota, so don’t make the sum of quota your annual goal!If everyone is at quota, how much will the company payout in total commissions?
  • You can set goals for anything that you measure:Units sold Revenue dollarsNew customersProfits. If you track multiple metrics make one the primary measure.
  • If the entire team hits quota, what is the Captain’s performance toward goal?If the Captain hits their goal, where is the company against plan?Captains will usually assign higher numbers downstream in case of a rep not performing.Are there open positions in the Captain’s team? How does the Captain’s quota reflect open positions, new reps and experienced reps?
  • Make sure you know what line items in a transaction reflect the appropriate renewal and up-sell revenue the Farmer owns.Don’t assign quota based on things the Farmer does not control.What periods should you track? If all of your renewals are at year-end, a monthly quota does not make sense. Try annual quotas instead.How much will the Farmer make if the renewal rate stays the same?Is there room for customer abuse?WARNING!Calculate total payouts as a percent of total renewals at different renewal levels, make sure that the payments you will make to the Farmer are worth the revenue and profits you will gain.
  • Are you measuring lead quality?Is your CRM set-up to handle passing leads to the appropriate reps and tracking what happens?Check:What has lead flow been in the past?Do you have the right environment for aprospector to find new opportunities?How many qualified leads are needed to become a closed opportunity? How long does it take?Do your prospectors develop their own lists or is marketing providing assistance?Is the plan incenting the prospector to deliver the right types of leads?Check the relationships between prospectors and sales reps, and watch to see how many they can support.How much of the closed revenue do you want to pay to ensure that only good leads are passed?
  • How technical is your product vs. your potential buyer?Is it a difficult demo?Is the concept you are selling a new one to prospective customers?Will the support person need to respond to competitive claims during demos?The complexity of the product will increase a specialist’s percent of salary consisting of variable pay.Quota = combined quotas of supported team membersReward for other specialist’s activity, like fairly supporting sales staff, helping move new products, etc.
  • Sales Webinar | Hunters, Farmers and Comp Plan Design

    1. 1. Hunters, Farmers andComp Plan DesignErik Charles | Senior Manager, Product MarketingXactly CorporationWill Wiegler | Chief Marketing OfficerThe TAS Group
    2. 2. Introductions Will Wiegler Chief Marketing Officer The TAS Group Erik Charles Senior Manager, Product Marketing Xactly Corporation © The TAS Group 2012
    3. 3. Poll #1What is the ratio of Hunters to Farmers in your sales organization?A: 1 : 1 HunterB: 1 : 2-3 HuntersC: 1 : 4+ Hunters © The TAS Group 2012
    4. 4. Poll #2What percentage of your budget is used for salesperformance incentives?A: 0%B: 1% - 3%C: 3% - 5%D: 5% - 8%E: 8% + © The TAS Group 2012
    5. 5. Hunters, Farmers, and Comp Plan Design
    6. 6. Connecting the Pieces #salescomp © The TAS Group 2012
    7. 7. What Should You Measure? #salescomp © The TAS Group 2012
    8. 8. Setting Quota So You Don’t Wipeout #salescomp © The TAS Group 2012
    9. 9. Timing Your Cash Flow • You will see spikes in revenue for whatever the measurement period is. • Combine monthly and quarterly goals with the annual numbers to help smooth the revenue cycle. 25% 20% 15% 10% 5% 0% 1 2 3 4 5 6 7 8 9 10 11 12 #salescomp © The TAS Group 2012
    10. 10. Thoughts on Rewards • Make it immediate • Majority of variable should be individual • Team bonuses can be accelerators or contests • Awards – President’s Club • Weekend escapes • Gift certificates #salescomp © The TAS Group 2012
    11. 11. When Should You Pay?  When the deal is won?  Once the client is “live”?  After accounting recognizes the revenue?  When cash is in hand? #salescomp © The TAS Group 2012
    12. 12. First You Hunt Revenue and Growth Are they hungry? Are you ready for them? Do you have a plan for them to hit the ground? #salescomp © The TAS Group 2012
    13. 13. How Much Pay at Risk? Flat Salary 3% >60% 1% - 15% 16% 10% 16% - 25% 17% 41% - 60% 31% 26% - 40% 23% #salescomp © The TAS Group 2012
    14. 14. Accelerating Uphill? #salescomp © The TAS Group 2012
    15. 15. Quick Steps For Paying The Hunter  Conduct a salary survey to set target pay.  How much of the target pay should be variable?  Pick metrics to base rewards on that meet corporate goals, focusing on the most important one.  Check out how much you’ll spend on sales if everyone makes quota. #salescomp © The TAS Group 2012
    16. 16. Things are Getting Bigger – Need a Captain Have you promoted your best rep out of the field or have you truly found a sales leader? #salescomp © The TAS Group 2012
    17. 17. How Much Can You Get From The Territory? Do they have the right personality? What is the opportunity? and How much can the Farmer influence? #salescomp © The TAS Group 2012
    18. 18. Now Its Time to Get Your Hunters Focused People not afraid of the phone. Will this be a stepping-stone towards becoming an account executive? #salescomp © The TAS Group 2012
    19. 19. How Complex is Your Product Line? Combining knowledge and presence #salescomp © The TAS Group 2012
    20. 20. Final Thoughts  What are you trying to achieve?  Who is going to sell for you?  How much leverage and upside?  What are you going to measure?  When will you write the check? #salescomp © The TAS Group 2012
    21. 21. Questions … 225 W. Santa Clara St., Suite 1200 San Jose, CA 95113 T (949) 439-3555 Erik W. Charles @erikchaz on Twitter #salescomp © The TAS Group 2012
    22. 22. Free Resources• Score your sales effectiveness. Get advice. See how you compare.• Create a customized sales process.• Read our blog featuring insights on sales effectiveness.• @dealmaker365 @thetasgroup Follow us on Twitter.• Learn more on our website. © The TAS Group 2012
    23. 23. Where You Can Find Us • US 866.570.3836 • US 866.469.2285 | 408.977.3132 • UK 01189 253 251 • Twitter: @xactlycorp • International +353 1 631 6140 • Blog: • blog/ • Twitter: @thetasgroup © The TAS Group 2012
    24. 24. Hunters, Farmers andComp Plan DesignErik Charles | Senior Manager, Product MarketingXactly CorporationWill Wiegler | Chief Marketing OfficerThe TAS Group