By: Chris Mason, V.P. Sales, Surgesoft

It is easy to speak to value in abstract terms but how does one turn that knowledge into action? How do you make a decision to move forward with a compensation initiative with all the executives on the same page? You need to build a value proposition that is easy to translate in action. It is easy to talk about improved process but the easy path to going back to business as usual is alluring however, we are what our habits tell us we are. In order to move beyond average into excellence, your processes have to be constantly improved and compensation is the easiest place to start.

There are 3 components to a value proposition (sales commission automation):

• Capabilities
• Provides the WHEN & WHY for prospects to automate their comp system
• Drives the sales process ensuring highly motivated reps throughout the year
• Provides competitive advantage through data analytics for making quick changes to the comp plans
• Impact
• Accelerate sales and reduce employee turnover
• Gain audit capabilities for compliance purposes
• Increased revenues and higher profitability
• Costs
• Reduce I.T. administration
• Improve accuracy and shorten pay cycle
• Lower turnover

What is value? We all basically know what value is but if you rely on established business models and older technologies after there have been significant innovations in the marketplace, you are using value-inhibiting behaviors. The standard way to view value is: Benefits – Costs=VALUE

• What Benefits?
• Value improvement that automation brings
• Alignment in overall strategy
• Visibility for the reps and management in the sales data
• Decrease overpayments and improved process
• What Costs?
• All costs associated with a new solution
• Annual subscription costs
• Implementation
• Plan Design and audit

You need to find the impact in order to move on this makeover. In order to find the true impact of your compensation process, look at both the strong and weak areas.

Items to analyze

• Error rates
• Turnover
• Sales Effectiveness
• Payouts Speed
• Audit capabilities
• Reporting to the field and executives
• Access and visibility
• Integration with disparate systems
• Communication to the field
• Time Savings for Administration
• Plan Complexity and understanding

Once you have this information you can begin to see the forest through the trees, and hopefully help the executive team see the light as well.

By: David Johnston, President, Surgesoft

The concept of Sales 2.0 being the future of selling is fraught with a number of unresolved issues and tenets that while not nullifying its influence, certainly add caveats to the claim. To quote Selling Power magazine, Sales 2.0 will bring "productivity-enhancing technologies that transform selling from an art to a science". In no way do I deny the positive impact that customer-focused technologies will have on the selling process, I do believe that their adoption and ability to influence buying decisions will take time and require structural changes in the relationships between buyers and sellers.

In particular, the current "gate-keeping" accountability of many procurement departments are limiting the potential for Sales 2.0 to accelerate, collaborate or align the buying/selling processes. While it might reduce time to respond to requests or produce quotes, the rendering of even small to medium corporate purchases into the RFP process will reduce the efficiency of the sales effort and continue to increase the sales cycle.

Technology is and will continue to have a dramatic impact on the sales environment. It must however be an enabler for performing salespeople with good sales management and strong customer relationships. Providing only a software solution without the infrastructure support of the selling organization, willing and engaged customers and sales processes that facilitate the use of the technology will not result in sustained performance improvement. I welcome your thoughts.

By: David Johnston, President, Surgesoft

The phrase, 'Garbage in... Garbage Out' is often used to describe the problems associated with poor data quality in systems applications. Nowhere is this more applicable than in Incentive Compensation Management (ICM) and Sales Performance Management (SPM) SaaS applications. Most often, the data used in these applications is pulled from different legacy systems (e.g.: Human Resources Information Systems (HRIS), Financial, Order Entry, ERP). The trouble is that these systems have been developed over the years to address different and specific needs for the organization, and usually not for sales. Therefore, when you attempt to integrate the data from these disparate systems you find that it doesn't always align nicely the way that you would like it. This why a SaaS application is so beneficial in addressing the incentive/performance needs of the sales organization.

The flexibility that is associated with SaaS is crucial. Having the ability to populate the transaction tables through either some type of middleware or using look-up tables to modify or add required formatting to the transaction allows greater consistency in the data. Further, loading data directly from the legacy systems without any data entry or 'cutting and pasting' of spreadsheets, reduces the potential for errors or omissions.

The configuration of the system in this regard is essential to the tracking and analysis that enables better decision-making and accuracy in payouts. Configuration requires not only knowledge of the application, but also the understanding of sales compensation and sales operations. It is very important to customers that the requirements and design of the system are addressed precisely and completely. Otherwise - and this is where a lot of implementations go awry - the post implementation changes and costs become astronomical. Be careful when third party implementations are undertaken, as the customer sales plans and processes, and education and understanding of the sales environment for two different groups (the contracted consultants and the software designers), will often result in the customer spending a lot of time and money on revisions and system modifications.

By: David Johnston, President, Surgesoft

Good technology can be a critical element in the sales performance of companies in today's competitive business environment. In order for these applications and systems to contribute to that achievement however, they must be aligned to the business goals and objectives of the organization. Developing a strategy for Sales Performance Management (SPM) technology is essential to developing the infrastructure that supports improved sales execution and results.

The graphic below shows the alignment that is required for improved sales execution.

Effective sales, marketing and service strategies are required to drive the identification of requirements for best practice sales processes, information needs for CRM creation, the performance metrics for sales compensation and competency requirements for sales training all impact the design and development of technology to sustain improvements in sales performance and business results. How effective is your organization at creating effective sales strategy?

By: David Johnston, President, Surgesoft

As 2009 exits and we enter the New Year, many people are trying to forget the financial turmoil and dismal business performance of the past twelve months. Looking forward to a potential for recovery of the business climate in 2010, many organizations are changing their sales compensation programs in order to position themselves for success. While it is critical for organizations to align their sales compensation to the business strategy going forward, it is essential that they take into account the following issues in developing a new sales compensation program:

1. Target Setting - Because of a reduction in spending by customers, many organizations have had to reduce targets at the beginning of the year or during 2009. Therefore, as they move into 2010, setting and reasonable, achievable targets will be more difficult. Therefore, it is important to ensure that the targets being allocated to the field sales force are based upon solid, known recurring or predictable revenues supported by new business expectations and new product introductions. Close alignment to marketing targets and initiatives will make the sales forecasts more realistic.
2. Margins - There has been a significant push in the past couple of years toward margin management and payout for profitable sales. Driving volume to support the infrastructure of the organization has been replaced by a focus on ensuring that each sale delivers the required margins necessary to be profitable at year end. Payouts should be tied to delivery of incremental margin, which supports the need for an outside, face-to-face salesperson.
3. Quality - The "how" in selling has increased dramatically in importance as sales methods have shifted from selling features and benefits of products to creating value and providing solutions to meet customers' needs. Whether it is through closer sales management and account reviews of the sales process in delivering the results or by demonstrating adherence to sales methodology as a qualifier for incentive payment, this ensure that excellence in execution is a component of both performance management and pay.
4. Strategy - The incorporation of longer-term strategic initiatives as a component in sales compensation plans is necessary to secure consistent, predictable revenues streams. Plans that pay only for short-term delivery of results make each performance period as difficult to deliver as the last. Investing in activities and results that are tied to deeper, multi-level relationships, introduction of strategic products to existing accounts or the acquisitions of new accounts all are crucial to stability and future success.
5. Communicate - Never has it been more important for sales organizations to maintain close, open and frank relations with their salespeople. There has been little movement of salespeople in the past couple of years (other than downsizing) due to the economic conditions. However, with recovery comes recruitment and your salespeople will be getting calls from your competitors and others looking to spirit them away. Keeping close to the ones that you must keep can make the difference between reaping the rewards of the recovery and struggling to fill open territories.

Remember...it is the good ones that can always find a job.

Surgesoft held it's latest webinar entitled, "Don't Let the Commission Plan Fail You in 2010" this past Thursday (December 10). Below are a couple of excerpts from that session.

This first video explains the importance of aligning your corporate strategy and goals with your compensation plans as part of a best-practice approach.

In this second video, Surgesoft VP of Sales, Chris Mason, explains the benefites of a hosted, software-as-a-service application to manage your sales compensation program.

This webinar can be seen in it's entirety and don't forget to sign up for Surgesoft's next best-practice webinar.

By: Adam Johnston, Surgesoft Inc.

In an article posted by Sue Barrett at SmartCompany.com recently, the question "What is the right incentive scheme for my sales team?" was raised.

Barrett discusses the need for a solid plan design as the foundation for any sales compensation program. She warns that some of the common pitfalls in this stage of the process include selecting measures that cannot be supported by automated systems, designing overly complicated schemes, and a lack of clarity in plan documentation and poor target setting.

Below are three ways to address these pitfalls along with graphical depictions of these solutions at work, in order to paint a clearer picture:

1. Select an automated system that is flexible enough to track any measure in your incentive program.









2. Automate the design process with a system that uses industry best-practices as its foundation, to readily create compensation plans that are easy to understand.








3. Use a system that creates clear, concise plan documents that can be communicated to the sales force easily, and in turn, focus your sales people to achieve the desired behaviours and results.