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Are Profits for Your Company and Salespeople Aligned?

Cabrera_newToday's blog post is by Christopher Cabrera, CEO of Xactly Corporation, the industry leader in sales compensation automation.


Many sales organizations get challenged when it comes to mergers and acquisitions. Some do well; others do not. Regardless, significant growth events—mergers, gigantic new accounts or game-changing product releases—almost always jolt companies into making major process changes.

When a major supplier to the Orthotics & Prosthetics (O&P) industry acquired another company, it doubled its sales force overnight. Because the leadership decided to make one radical change, they increased sales performance and greatly reduced their administrative burden—while increasing Salesforce user adoption. (Read Cascade’s story.)

Another company made a similar decision following a multi-billion dollar acquisition. It now motivates strategic sales behaviors based on revenues, margins and units across 8 regions and 500 sales people. Sales leaders assess the effectiveness of their sophisticated sales plan with valuable analytics and reports, generated in minutes. (Read Carestream Health’s story.)

What did Cascade and Carestream Health knew that some others don’t is that sales performance hinges on the tenets of human behavioral science—that humans instinctively behave in certain ways when they have the right incentive to do so. This is why the radical change that both companies made was to automate their incentive compensation management processes.

To further illustrate the concept of motivation, think about what happens when a well-known high roller visits a swanky club. Why does the staff treat him so well? Because they know his black AmEx means he’s likely to spend more and leave a generous tip.

Salepeople are no different. They do more of what they know will benefit them and less of what doesn’t. That’s why real-time access to performance data improves employee behaviors and performance.

When sales data is easy to access and easy to use, sales reps can see in real-time how they will be compensated for selling the things the company wants them to sell, such as higher-margin products.

They can even run “what-if” scenarios to determine how to structure a sale for maximum payout of commissions, bonuses and special incentives.

Meanwhile, sales leaders can break down what their teams’ success is made of and achieve detailed visibility into what’s working in their sales compensation and what’s not—what has been sold, to whom, at what margins, through which channels, in which regions and at what price.

The key here is good, clean data. For many, post-sales information is scattered across a variety of systems, including ERP, HR and payroll. Often, it’s bound up in spreadsheets.

More and more companies retire those error-laden spreadsheets and centralize post-sales data into a single sales compensation management system. Xactly’s customers pull this information from as many as 30 places and everything is still seamless.

This radically changes the landscape for post-sales data, just as CRM optimized the sales pipeline.

Data allows companies to target incentives to get more of what they want from reps. Just ask Cascade and Carestream Health.

To learn more about The Science of Motivating Reps, join Christopher Cabrera at the Sales 2.0 Conference in San Francisco on Monday, April 2.

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Niclas Rasmusson

I agree with your words, although I see signs of a new trend. Salespersons are more restrictive and actually put relations and values in the front seat. Do I actually want to do business with this customer? I e.g. say no to customers I believe will not be able to successfully implement a change in the sales organization as targeted in the management team. A customer that not give full management support to the rollout plans and implementation is a customer I don´t want to work with. My bonus is organizations and individuals that exceeds the performance of the market and their competitors. I want others to be successful - thats my value and call.

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