Selling with 360-degree Visibility: Dream or Reality?
The Sales-Performance Puzzle: How to Solve It

Five New Year's Resolutions for the Data-Driven Sales Leader

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


Recently, many sales managers have told me that they feel they could and should be operating more strategically — but they lack the data they need to make critical business decisions and consistently drive performance. Here are five New Year’s resolutions to help you make better, more strategic management decisions and get your team on a better track for 2013.

Resolution #1: Find out how much sales compensation really costs.

Most sales managers and sales-compensation analysts consider Compensation Cost of Sales (CCOS) a key metric for making the right strategic decisions. To correctly determine the percentage of total revenue spent on salaries and incentives, however, you must have the right data.

Collecting that data is not always as easy as it sounds, because it lives all over. For example, base pay may be stored in payroll software, while commission information may be stored on spreadsheets. Instead, consider this:

  • Sync all of your business data — finance, ERP, sales, CRM, etc. — in one automated sales-compensation tool.
  • Use complete, real-time data to determine percentage of spend.

Resolution #2:  Spend more on sales.

I know what you’re thinking: “Shouldn’t we reduce costs?” The short answer is yes. But you’ll spend less in the long run (and increase profits and revenue) if you spend more on sales where it counts. For example, drill into your top-performing territories, products, and performers. What opportunities do you see to increase spend for long-term improvements? Maybe data indicates that you should sweeten the pot for certain top performers or increase sales spending in certain territories.

Resolution #3:  Determine exactly where to allocate funds for coaching and training.

Many sales managers take a one-size-fits-all approach to coaching and training. But research by Harvard Business Review and CEB has shown that sales managers get the best ROI on coaching dollars by investing in midlevel performers. (Top performers don’t require the same level of coaching, while poor performers often can’t be helped, no matter what you do.) Here are a few action steps I recommend:

  • Review your data to determine the effectiveness of your coaching and training programs.
  • Identify sales reps who could most benefit from coaching and training (typically midlevel performers).
  • Customize training and coaching programs to increase performance where you need it most, based on what’s worked well already.

Resolution #4: Eliminate payment errors.

Sales-compensation plans can be complicated and confusing. And the information can take forever to true-up, get approved, and so on. The net effect is often inaccurate or delayed payments. What can you do to simplify? 1) Export sales-compensation data from the database directly to your payroll system. 2) Eliminate errors with an automated sales-compensation solution. Your reps will thank you for timely and accurate comp-plan payments in 2013.

Resolution #5: Comply with sales commission regulations.

You know noncompliance can be very costly, but how effective are you at staying up-to-date on legislation?

For example, have you heard about California AB 1396? It’s a new law requiring companies with any commission-based employees providing services in California to have written commission plans in place by January 1, 2013. (Read more about the details on Xactly’s blog.)

Stay compliant:

  • Create plan documents that specify how commissions will be tracked and paid, then route them to employees for approval.
  • Use an automated tool to guarantee consistency between commission plans and information used to calculate and report on commissions.
  • Partner with a company that will keep you abreast of future legal requirements.

We all want to do better in the new year. These five resolutions for sales managers will help you make the decisions necessary to ensure that your sales team is set up for success. 

Share your comment


Feed You can follow this conversation by subscribing to the comment feed for this post.

The comments to this entry are closed.