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New Research Shows Widespread Desire to Improve Sales-Compensation Plans
The rise of complex sales efforts in international markets is leading global organizations to re-evaluate their sales-compensation plans and look to new technologies to boost sales-staff performance. Those are some of the key findings in "2008 Strategic Sales Compensation Survey," a new analysis of sales-force compensation challenges by Deloitte and Oracle.
The report also offers hope for companies trying to cope with these challenges. Deloitte advises them to tackle compensation complexities with a four-pronged strategy that includes an appropriate technology infrastructure to support sales-plan management (read the full report).
The survey found that only 41 percent of sales leaders are currently satisfied with their sales compensation programs, a sharp drop from 59 percent in 2006. In addition, only 46 percent of the respondents believe their sales-compensation plan is sufficiently driving the right selling behaviors, and complexity may be the cause. Their current sales tools may not be sufficient to manage the needs of the business.
Of the executives queried in the report, 46 percent said sales-force compensation plans have become more complex since 2006, thanks to rising numbers of sales representatives in multiple countries, increased team selling, more complicated quotas and territory assignments, and the demand for more precise metrics.
"Organizations have made strides in streamlining plan designs, but for many, administering the plans is still too complex," says Lisa Conley, a principal strategist for Oracle compensation products. "The processes need to be consistent and scalable, and incentive-compensation technology is the way to do that."
For example, an enabling technology such as Oracle Incentive Compensation (OIC) uses an underlying calculation engine to automatically factor in sales-plan variables such as line item product transactions, quotas, revenue or unit-based, non-revenue items, team sales, as well as individual calculations around draws and clawbacks to determine the appropriate compensation for each transaction for each payee.
"The technology can do all this without the strain and the stress resulting from the application of scores of different formulas and data sources for each person in the organization," she explains. "With OIC you can reduce your manual effort, increase your accuracy, and improve your time-to-payment, which is good for business and good for your sales personnel."
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