Author: Mirza Baig
Sales leaders are constantly trying to improve sales performance of their teams. Incentive compensation is an effective way that can result in such performance.
Before we discuss incentive compensation software, let’s first quickly look at sales performance management (SPM) and incentive compensation management (ICM).
A quick peek at Sales Performance Management (SPM)
SPM helps realize optimized sales execution resulting in increased revenue growth. It’s a strategy that empowers and drives sales teams to meet or exceed sales objectives effectively.
SPM also enables sales leadership to monitor, guide and help improve the sales team’s performance to sell more efficiently. Some aspects of achieving high sales performance are:
- Effectively territory planning
- Quota strategies
- Giving your sales reps the right incentives
- Automating commissions and other incentives
What is Incentive Compensation Management (ICM)?
Incentive compensation is a monetary gain to reward and motivate the sales teams. It is a part of a company's overall SPM strategy to help increase effectiveness of the sales teams.
ICM involves planning, organizing, overseeing, controlling of incentives as well as executing the payout calculations for the sales teams.
Managing and executing proper incentive compensation with excellent incentive plan can help companies achieve:
- Increased sales numbers by continuous motivation
- Team collaboration with team-based effort to close deals
- Reduced sales employee turnover by retaining happy workforce
Why the need for incentive compensation management (ICM) software?
With ICM software, companies can not only manage incentive comp. plans, it’s distribution and approvals, and calculate payouts but also significantly reduce disputes and the effort to resolve them.
Some of the benefits of implementing such a software are:
- Increase sales effectiveness - improved selling behavior
- Retain lost revenue - avoid over-payments
- Increase satisfaction - reduce underpayments and disputes
- Lower operational costs - effort to resolve disputes, speed and flexibility of modern tool
- Adaptable - speed to market for plan changes
- Compliance - risk and audit
- Quota Attainment - actual vs. plan
- Reduce sales force turnover - enable transparency, trust in payments, payee adoption
These business case drivers result in increased sales productivity leading to overall revenue growth. Modern cloud-based software applications, such as SAP Commissions, can deliver such benefits.
SAP Commissions can provide sales teams with payment and performance insight, anytime, anywhere, on any device. It allows administrators to quickly enable features and functionality without relying too much on IT.
Incentive compensation software - Administrator’s perspective
SAP Commissions administrations (admins) can model, compare, test, and roll out new incentive plans and promotions. Admins onboard new payee information. They create simple or complex incentive plans using intuitive drag-and-drop interfaces.
Some other administrative tasks include configuring the dashboard, so sales reps can have information in one place. They also configure the sales team’s user-interface and generate reports, as required.
Incentive compensation software - Sales Rep’s perspective
Sales reps can easily forecast potential income on deals they're working on. Once deals are closed, payouts can be made on a flexible schedule on a weekly, monthly, or quarterly basis.
Sales reps can also accept new compensation plans and view compensation statements. Sales personnel are continuously motivated with commissions, bonuses, multipliers, and performance insights.
SAP Commissions enables all this and more. In case of a suspected error in estimation or actual payout, it allows the sales rep to submit a dispute.
Incentive compensation software can help realize a company's vision on sales performance. It can shape up selling behaviors that contribute to the bottom-line revenue growth.
SAP Commissions, in particular, can automate and streamline the incentive compensation process from sales order-to-payout, for both direct and indirect sales force. It can resolve compensation inquiries swiftly.
It’s time to let go of your spreadsheets. Or, perhaps your old systems may not work effectively. A robust, cloud-based sales incentive compensation management software should be part of your sales performance strategy.
Learn more about the author, Mirza Baig.