For Top Performance, Connect the Dots Between CRM and Sales Compensation


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It seems that there’s hardly a company around anymore that doesn’t rely on some sort of automated CRM application, particularly with the new breed of on-demand CRM solutions delivering such compelling value. The visibility these solutions provide is invaluable in driving sales and satisfying customers. But what about post-sales visibility—the kind that can come from leveraging sales compensation information?

Sadly, post-sales visibility is an area where most companies still scramble for data and, thus, miss out on the synergies that can exist between CRM processes and strategic compensation programs—programs that change behaviors so sales reps sell the most profitable products and consistently engage in desired activities. Yet it doesn’t have to be this way. It’s now perfectly possible to build a bridge between pre- and post-sales data and leverage them both within a single environment to mold sales behaviors and maximize performance. But first you have to chuck the spreadsheets.

As I pointed out a year ago, most companies remain mired in cumbersome spreadsheet-driven processes when managing incentive compensation. Among the many consequences is that these compensation processes exist in a silo, insulated from a company’s CRM applications and data. With no easy way to integrate pre- and post-sales data, sales reps have no ready visibility into how to most profitably address a “live” opportunity and structure a sale. In other words, they can’t easily see how much more money they personally will make by selling the things the company wants them to sell—such as excess inventory products and higher margin offerings.

Even management couldn’t measure progress or see how each rep was being compensated without waiting for ad hoc reports.

Here’s how one company—a telecommunications services company offering data, Internet and voice solutions to businesses in the mid-Atlantic region—is successfully addressing this issue. The company’s sales landscape is extremely complex, with a diverse set of products and services and with reps being paid based on such variables as customer location (for example, does the building already have lighting, or does there have to be costly new construction?).

Looking to maximally leverage existing infrastructure, the company tries to incent reps to sell into buildings where it already has a presence. But because of a heavy reliance on cumbersome and inflexible spreadsheet-based processes, it was difficult to design and implement the kind of sophisticated compensation plan that would align sales behavior to this and other corporate objectives. Moreover, reps lacked real-time visibility into their plans and where they stood in regard to them, and even management couldn’t measure progress or see how each rep was being compensated without waiting for ad hoc reports. Something had to change.

The answer was to get rid of the spreadsheets. Leveraging an on-demand sales compensation management solution in place of spreadsheets, the company started with consolidating post-sales, compensation-related data from such areas as product databases, HR systems and order-entry systems into a single database. Each rep’s compensation is calculated based on predetermined business rules. Step 2, using the same solution, reps get real-time, web-based visibility into where they stand versus plan and how they are getting paid. So far, so good.

Now here’s the pre- and post-sales integration part. As an increasing number of organizations do, the company uses an on-demand CRM application—in this case,’s Salesforce CRM—to automate its sales process. With accurate compensation data readily available to reps online, the company has been able to extend its CRM investment in a powerful way. Specifically, the company has linked its sales compensation management solution directly to its implementation. Reps now run “what if” scenarios based on Salesforce CRM “live” opportunity data coupled with accurate compensation plan data from their on-demand sales compensation management solution, and they are able to do it without leaving their CRM application.

Once logged in to Salesforce CRM, reps can go straight into the compensation management application through a drop-down menu, with no additional login. To run “what ifs,” they access Salesforce opportunities of interest (using filters such as date and probability of closure) and estimate potential commissions and bonus payments before, during and after a sale using an incentive estimator within the compensation management solution.

The upshot is that reps are now able to quickly discover where best to put their efforts based on potential commissions and bonuses—commissions and bonuses designed to align their behaviors with the company’s strategic objectives. And so the wall is broken down between pre- and post-sales data and processes, and new synergies are allowed to flourish, leading to strengthened strategic focus and increased sales performance.

Christopher Cabrera
Xactly Corp.
Christopher W. Cabrera is president and CEO of Xactly Corp. and the coauthor of Xactly Sales Compensation for Dummies. Previously, he was senior vice president of operations for Callidus Software. A Silicon Valley resident, Cabrera earned a bachelor's degree in business administration from USC and an MBA from Santa Clara University.


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