A recent field survey provides insight into the key business goals and requirements for sales incentive compensation identified by sales and finance executives. It validates the need to automate sales incentive compensation management with an affordable solution that meets these critical requirements.

The Top 5 Incentive Compensation Goals and Requirements of Sales & Finance Executives

#1. Modeling & forecasting: Executives understand that the sales incentive compensation process begins with modeling plans and forecasting commission costs. Their goal is to easily and efficiently build and analyze compensation plan models. They strive to eliminate the guessing game and deliver plans that align sales representatives with corporate objectives, improve plan effectiveness and predictably drive sales behavior.

• Compel® empowers sales and finance executives to easily build, analyze and track multiple plan models to better forecast and control sales incentive compensation costs. Once modeled, plans that meet revenue and cost parameters can easily be rolled into production and their effectiveness tracked graphically overtime.

#2. SOX compliance: Finance executives in particular identify the need to bring more financial control to the sales incentive compensation accounting process. As companies strive to comply with Sarbanes-Oxley requirements, it quickly becomes clear that spreadsheet-based incentive systems fall far short in supporting compliance initiatives.

• Compel enables Sarbanes-Oxley compliance in the area of sales incentive compensation management. The solution provides accurate reporting and commission calculations, best-in-class security, consistent processes, document and workflow controls and a valid audit trail of all changes made to plans and data. Compel audits compensation plan distribution and electronic acceptance by plan recipients and maintains plan version history.

#3. Visibility & reporting: Sales and finance executives seek to provide their representatives with immediate visibility into performance and earnings information to keep them focused, aligned and motivated. They also require that representatives and their managers have timely access to compensation reports.

• Compel provides sales representatives and managers with real-time visibility into key sales performance metrics and commission and bonus earnings through secure, interactive drill-down dashboards. In addition, Compel delivers both standard and custom reports, and enables users to create custom exports to Excel.

#4. Flexible plan design & changes: Executives identified the need to support complex sales incentive compensation plans. They also require the ability to easily manage changes “on the fly” — for example personnel changes (organization, transfers, promotions, etc.), changes to plan measures, products, teams, credit assignments, quotas and territories.

• Compels patent-pending wizard-based Plan Builder was designed specifically for business users (rather than IT) and makes it easy to create, manage and modify sales incentive compensation plans. The intuitive user interface provides logical flow and structure to ensure that the user knows where they are in the process at all times and that no step or plan element is missed. The Plan Builder even anticipates the user’s next step and displays only relevant options based on prior selections.

#5. Automation and process efficiency: Executives recognize the high costs and pain associated with legacy incentive compensation systems. They require the ability to calculate commissions faster with fewer resources, and to do this with fewer errors and disputes.

• Compel streamlines the manual and error-prone sales incentive compensation spreadsheet-based process by consolidating all data in a single centralized database that enforces consistent automated processes. The solution easily integrates with corporate source systems and ensures accuracy, data security and efficiency.

To learn more about Compel and how it has helped companies achieve their sales incentive compensation goals, follow the links below.

Centive, the leader in on-demand sales incentive management, is among the first strategic Salesforce.com partners to join the new AppExchange Incubator Program. The first in a world-wide series of Incubators just opened in January 2007 in San Mateo, California.

Participation in the Incubator Program enables Centive employees to work side by side with Salesforce.com employees and leverage the experience and best practices of the entire on-demand community. The Incubator program provides Centive with a full package of business services, including access to the Apex multi-tenant programming language and platform, technology infrastructure, product development, sales and marketing support and business development assistance, as well as office space. Centive expects that its investment in the Incubator program will help compress the development timeline and enhance the business benefits of its on-demand incentive management solution, Compel.

As a certified AppExchange sales incentive management solution, Compel provides tight integration with the leading on-demand CRM tool, Salesforce.com. The integration enables full automation of the sales lifecycle — From Prospect to Paycheck™ — and ensures that sales teams stay focused, aligned and motivated to close the right business.

The Compel Commission Forecaster makes it easy for sales representatives and managers to evaluate potential commission earnings based on deals in their pipeline. Users logged into their Salesforce.com account are one click away from their earnings and performance stats for the current period. By simply clicking the Commissions tab, without re-entering login information, users access an integrated view of both earned commissions and potential commissions within Compel. Behind the scenes, Compel imports the users opportunities from their Salesforce.com account and accurately calculates the projected payout based on the sales plan, accounting for thresholds and accelerators. Representatives and their managers can then drill down on projected earnings to review detail, and summarize, sort and group transactions by various dimensions to prioritize deals.

The tight integration with Salesforce.com motivates sales representatives to more diligently maintain records in the CRM system, leading to increased revenue forecast accuracy and sales productivity.

To learn more about the benefits of Compel’s tight integration with Salesforce.com, follow the links below.

In a recent article published in Destination CRM, Bob Conlin, CMO at Centive, reviews performance-oriented sales commission plan design for sales commission management. Although plan modeling and forecasting greatly impacts sales performance, most companies fail to successfully model plan variables and attainment scenarios.

Says Conlin, “The first best practice step in sales commission management begins with modeling sales commission plans to ensure they reward the rep and the company in equal measure. You can do almost everything else right when managing sales teams--but if your plans don’t work, results won’t meet expectations.”

Best practice sales commission management starts with building and modeling sales commission plans and involves the creation of multiple what-if scenarios so that a myriad of variables and changes can be evaluated. Companies then analyze and forecast related commission earnings at both a macro (plan) and micro (individual) level, and then choose those sets of sales commission plans that best fit corporate parameters for sales performance, revenue, and commission budget. Once the most effective plans are rolled out, sales and finance executives actively monitor actual attainment and compare it to modeled results. In the event of unforeseen internal or external developments, the company is able quickly to identify the trend and promptly respond by making appropriate changes in strategy, plans, people and processes.

As the leading on-demand sales commission management solution, Compel® provides complete modeling capabilities, including sales commission plan and participant modeling. With Compel Modeler, users can easily create and compare multiple scenarios and automatically calculate commission costs at the company and individual level. Customers forecast commission expense and model plan changes to ensure optimal and effective sales commission plans. The Compel Commission Forecaster empowers the sales team to forecast their own earnings for the current period, thus enhancing the motivational power of the sales commission management system.