Xactly build your sales team

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How to build and incentivize a your sales team

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Xactly build your sales team

  1. 1. COMP PLAN DESIGN: BUILD YOUR SALES TEAM
  2. 2. @XactlyCorp CONNECTING THE PIECES
  3. 3. @XactlyCorp  Top and bottom line growth  Market share  Customer satisfaction  Strategic product revenue growth  New account acquisition  Top talent retention  Account/revenue retention WHAT ARE YOU TRYING TO ACHIEVE?
  4. 4. @XactlyCorp  Without incenting profits, margins can collapse as the sales team chases pure revenue numbers.  Consider adding a bonus for overall profitability each quarter.  Don’t overload incentive pay with too many variables. Zero in on the main company objectives. WHAT SHOULD YOU MEASURE?
  5. 5. @XactlyCorp  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? CHECKLIST
  6. 6. @XactlyCorp Annual Quota Targets Quarterly Quota Targets >80% of quota 67% >80% of quota 60% TIMING YOUR CASH FLOW
  7. 7. @XactlyCorp • Make it immediate • Majority of variable should be individual • Team bonuses can be accelerators or contests • Awards – President’s Club • Weekend escapes • Gift certificates THOUGHTS ON REWARDS
  8. 8. @XactlyCorp  When the deal is won?  Once the client is “live”?  After accounting recognizes the revenue?  When cash is in hand? WHEN SHOULD YOU PAY?
  9. 9. @XactlyCorp Are You Selling at Different Margins? Product Mix?
  10. 10. @XactlyCorp BUILDING YOUR SALES TEAM CAPTAIN PROSPECTOR FARMER SPECIALIST HUNTER
  11. 11. @XactlyCorp FIRST YOU HUNT REVENUE & GROWTH
  12. 12. @XactlyCorp HOW MUCH PAY AT RISK? Flat Salary 3% 1% - 15% 10% 16% - 25% 17% 26% - 40% 23% 41% - 60% 31% >60% 16% 2011 Sales Compensation and Performance Management Key Trends Analysis
  13. 13. @XactlyCorp DON’T GET DISTRACTED You can set goals for anything that you measure: • Units sold • Revenue dollars • New customers • Profits. If you track multiple metrics make one the primary measure.
  14. 14. @XactlyCorp 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
  15. 15. @XactlyCorp HOW MANY MEASURES? 1 2 3 4 5 6 7 PERFORMANCE
  16. 16. @XactlyCorp WE ARE GETTING BIGGER
  17. 17. @XactlyCorp 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?
  18. 18. @XactlyCorp CAPTAINING THE CAPTAIN  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?
  19. 19. @XactlyCorp TIME TO SEPARATE SOME ROLES
  20. 20. @XactlyCorp HOW MUCH CAN YOU GET FROM THE TERRITORY? Do they have the right personality? What is the opportunity? How much can the Farmer influence?
  21. 21. @XactlyCorp CHECKING THE FARMER PLAN  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.
  22. 22. @XactlyCorp PAYING THE FARMER  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.
  23. 23. @XactlyCorp PRIME THE PUMP
  24. 24. @XactlyCorp 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?
  25. 25. @XactlyCorp STAKING THE CLAIM  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 a  prospector to find new opportunities?  How many qualified leads are needed to become a closed opportunity? How long does it take?
  26. 26. @XactlyCorp PANNING FOR GOLD  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?
  27. 27. @XactlyCorp GET SOME EXPERT HELP
  28. 28. @XactlyCorp HOW COMPLEX IS YOUR PRODUCT LINE? Combining knowledge and presence
  29. 29. @XactlyCorp SPECIALIST: DO YOU NEED THEM?  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?
  30. 30. @XactlyCorp PAYING THE SPECIALIST  The complexity of the product will increase a specialist’s percent of salary consisting of variable pay  Quota = combined quotas of supported team members  Reward for other specialist’s activity, like fairly supporting sales staff, helping move new products, etc.
  31. 31. @XactlyCorp GETTING BIG – NOW SHARING CREDITS 1 DEAL 5 Commissions
  32. 32. @XactlyCorp 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?

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