The Real Argument for Automated Compensation Solutions
Unleashing the Beast in Every Sales Professional
Within every sales professional is a primal, quota-crushing beast. It cannot abide the irritation of manual commission reconciliations and other distractions as it tracks and captures its prey. The sales beast cares only for the hunt.
The beastmaster, meanwhile, has no time for tedious compensation routines or inferior, time-consuming tools like spreadsheets. For a successful hunt, the beastmaster needs to wipe out every possibility of sales downtime that trivial administration and clunky processes may cause.
The beastmaster needs to unleash the beast. The beastmaster needs automated sales compensation. Sales compensation automation creates visibility, scalability, and simplicity. It solves critical problems for everyone involved, including:
- Mitigating administrative costs
- Improving data accuracy
- Providing for system scalability
- Creating sales insight
- Driving higher morale
- Lowering sales team churn
- Being able to rapidly adapt to organizational and market shifts
Now, see how an automated sales compensation solution enables all of that by empowering the beastmaster to:
- Lower administrative costs
- Reduce turnover
- Boost sales transparency
Lower Administrative Costs
Automated compensation solutions lower total administrative costs immediately and substantially. Finance, management, and operations resources are set free to contribute to additional corporate initiatives.
By comparison, old-fashioned or traditional compensation processes generally require you to import sales records into a spreadsheet and manually manipulate the data, attributes, compensation plans, and formulas. This methodology is inherently time-consuming and error-prone. It also limits efficiency and lacks scalability. Manual reporting requires days to produce individual reports via spreadsheets for every pay period.
Meanwhile, the beast is losing ground in the hunt and getting frustrated with the beastmaster.
Don’t just take our word for it. A report from the financial- modeling firm Mazars Group reported 90 percent of business spreadsheets contain at least one error. Each mistake on a spreadsheet may equate to lost revenue or a disgruntled beast on the sales team.
Organizations leveraging spreadsheets to manage compensation are inevitably producing errors and operating inefficiently. Compensation management solutions are developed and designed to eradicate human error and automate the payout process, delivering immediate, measurable business results.
How do compensation management solutions remove 98 percent of manual time and errors?
- Data Importation
- Customer-specific Business Rules
- Effective dating
Automated compensation management solutions enable finance and HR professionals to spend less time managing the sales beast and put more of their time, energy, and resources into sales and analysis, morale and retention, and other areas of specialization.
According to a study published in the Journal of Organizational Behavior, consistent turnover among high-performing employees is directly linked to poor company performance. The loss of strong employees — of the most effective sales beasts — is painful for any organization in several ways. For example, researchers found high turnover among high performers makes it more difficult to recruit similarly talented individuals.
When sales executives have little or no transparency into their compensation, particularly variable compensation, there is a direct impact on trust, motivation, morale, and dedication to their employer.
Companies that leverage an automated compensation solution decrease turnover measurably when compared with organizations that depend on static spreadsheets. Automated compensation improves employee retention by increasing payout accuracy and delivering individual transparency. This not only saves money in the long run but boosts long-term performance by increasing the stability and longevity of its most valued employees.
Recruitment efforts are always expensive, and that cost is compounded by opportunity costs when a company needs to replace a key sales executive or primary sales operations leader who left unexpectedly. An unexpected loss also:
- Puts additional pressure on the remaining staff and management
- Can negatively affect customer satisfaction
- Significantly diminished an organization's overall morale
Iconixx has found that the opportunity cost associated with a lost salesperson can account for approximately 50 percent of that individual’s quota for up to two quarters. In addition, the company must spend significant amounts for recruitment, onboarding, and ramp-up costs to replace that top performer (training, nonrefundable draws or guarantees, and similar costs).
When the Center for American Progress aggregated findings of 11 studies on retention, it found that the turnover costs equaled about one-fifth of the former worker’s salary. Rather than incurring this type of unnecessary operating expense, businesses should proactively work to retain their employees — especially the high performers who contribute to a culture of success.
Transparency is key to a happy sales force, and happy salespeople are more likely to stay at a company over the long term and be true top-performing, quota-slaying beasts. Salespeople who have a firm grasp of their organization’s compensation plans and their personal progress feel more engaged in the workplace. Unfortunately, spreadsheet-based systems used in large organizations create confusion and increase the number of errors. The results: increased stress and dissatisfaction within sales teams.
In addition, the high probability for errors is just part of the problem. Spreadsheet-based systems that require employees to manually enter sales data are also ripe for misuse and risk. As several studies and compensation automation vendors note, a majority of organizations have one person in charge of monitoring commission records and data — for the whole organization.
This individual — the beastmaster — cannot conduct adequate audits on all of the required forms. Plus, any audits they do complete require time that could be more profitably spent in other areas. With today’s modern compensation management solutions, data entry is automated. Any number of employees can be enabled to run and audit the system. Accuracy, accountability, dispute resolution, and traceability are all enhanced.
With Iconixx, for example, sales executives get increased visibility and transparency into their commissions and their data through dashboards, as well as commission reports. This allows individual employees to monitor their performance against their unique plan and goals. They can immediately inquire about potential discrepancies. Unlike using a spreadsheet, which simply gives employees a general sense of their progress toward a goal, an automated compensation solution provides interactive guidance for salespeople — motivating and driving those who desire to achieve and exceed their quotas.
Salespeople may also leverage a “what if” calculator. Delivered by Iconixx, this effective tool uses opportunity data to let people determine their possible commissions and bonuses. This supports sales professionals to determine how much a customer or sale may mean to them and what steps they’ll need to take to reach their goals and manage their pipelines. The Iconixx tool improves planning at the individual level, so employees may better manage their sales cycle, thus boosting overall sales substantially.
Because Iconixx eliminates the potential for errors and misuse, it also significantly reduces the number of disputes over compensation. Managers and sales operations are able to focus more on evaluation and strategy to reach sales goals and improve their processes. The efficiency gains, meanwhile, translate into worthwhile cost savings for the company.
Next Steps: Investigate an Automated Compensation Solution
If any company wants to unleash the quota-crushing beast that lies at the heart of every great salesperson, it needs a modern compensation management solution that has four vital features:
Good sales compensation plans are straightforward, fair, and simple for everyone involved. But even the best plans can become difficult to maintain with manual systems (like spreadsheets) when scaled to meet the needs of larger sales teams. Iconixx automates the design and administration of sales compensation plans to eliminate the manual burden of calculating sales commissions in a group sales environment.
Even straightforward sales compensation plans can create mistrust among the sales ranks when they are not clearly understood by all stakeholders in the process. Iconixx makes sales compensation transparent by empowering all participants in the commission process with real-time visibility into the factors that impact payments. When commission payouts are predictable and dependable, everyone in the sales ecosystem is motivated to focus on the work that truly matters.
Sales compensation plans are like snowflakes — no two are the same. The right compensation plan for your company probably even differs from salesperson to salesperson. Variable compensation plans combined with complex calculation and approval processes can lead to wasted time and money. Iconixx is flexible enough to automate even the most complex and varied sales compensation plans, leaving more time for the business of selling.
A single mistake in sales compensation (no matter how minor or innocent) can erode confidence in management. Salespeople are most effective when they can focus on their work knowing that the company always has their back on payday. Iconixx helps sales compensation plan administrators avoid mistakes of all sizes and types, resulting in a focused, trusting, and loyal sales force.