Even in the best of economic times, businesses should be getting the most out of their frontline employees – their sales force. In these tighter times, it’s even more important to make sure that your sales team is working effectively toward your company goals. Your compensation plan shouldn’t be a stand-alone policy that’s just administered over in the sales department. It should be directly tied to your company strategy.
According to a recent study from Gartner, most small and medium businesses don’t use automated Sales Performance Management (SPM) software, and up to 90% are still using spreadsheets to track sales force performance and commissions. Using spreadsheets is labor intensive, not very flexible, and is vulnerable to data entry errors. Part of the reason for sticking to spreadsheets is familiarity, and part is that there haven’t been affordable solutions designed for smaller businesses, and older Incentive Compensation Management (ICM) were complex and required a lot of internal resources to administer.
However, as with other business processes, there are more SaaS-based solutions for sales management cropping up that are specifically designed to help smaller businesses automate their plans. Xactly is one example. As with other SaaS products, they can be linked to CRM systems like Salesforce.com, so that sales strategy, process and performance can be integrated. When sales compensation can represent a big chunk of a small company’s budget (up to 10%, according to Gartner), it pays to make sure it’s being managed carefully and is driven by overall company strategy.
Laura Leites, Assistant Editor, Smallbiztechnology.com