Posted by Thereasa Fullmer on Thu, Jan 15, 2009 @ 01:55 PM
I am new to the Makana Marketing team and my first project was to help with our best practice webinar yesterday:
Finalize your 2009 Sales Compensation Plans. I have been hosting web seminars for the past five years. And while the audiences and content are different they all virtually run the same. You set up in a room an hour before, do a final run through, make sure the recording software is working, test the polling features, line up questions for the end if no one from the audience happens to ask anything... And this is where the need Makana is filling is different
On my first Web Seminar yesterday we had 16 questions and they were still coming in 30 minutes after the scheduled end time. These weren't the "what's the dial in number?" questions, they were the "how can I drive results" type questions. I guess it shouldn't have surprised me, because while polling the audience we learned that 2/3 of the attendees needed to have their compensation plans completed by the end of January. That's only 11 business days away! No wonder people were so attentive.
While listening to Liz and Teanna, two of our on-staff sales comp experts, talk about comp plans and especially during the Q&A portion of the web seminar, I suddenly realized that it's a lot harder than just taking a percentage of revenue and paying it out to your sales people. There are people trying to develop team plans, develop different plans based on what products are sold and trying to manage accelerators. And it explains why 87% of attendees were still analyzing, modeling and designing plans. I remember being in sales and those weeks of waiting around for my comp plan. In the mean time, I know I wasn't motivated to do much, because as Liz described in the webinar, sales people are motivated by money and if you don't know you are getting paid, you aren't motivated to get the deal done. On average we got our completed comp plans 4-6 weeks into the quarter. And they re-did them every quarter. And senior management would sit down and review each one. At the time I was just irritated it took so long, but now I understand why and know that it can be better.
It's great to know Makana has a solution that saves time, makes sales people more motivated and in the end helps drive the company strategy versus just unloading product.
Posted by Chris Mason on Tue, Aug 26, 2008 @ 09:03 AM
One of the most common unproductive tasks sales people are frequently compelled to do is their own commission calculations and accounting. This practice, often called shadow accounting, is an entirely wasteful process that uses valuable hours that salespeople should spend selling.
It boils down to an issue of trust. Does the rep trust the system that the company has in place? Does the rep understand the commission agreement in place? Can the rep "see" what will be paid out in the future? You can eliminate this need for 'shadow accounting' by making incentive structures less complex and build trust in your plans. When sales reps trust the plan, they feel that the commissions that they are being paid are accurate. Therefore accuracy is not the issue, the belief that the plans could be inaccurate is the issue. You can start by asking this question: When the sales rep gets their plan document to start the selling year, is that document understandable, concise and clear? If you have used Best Practices when building your plans, people will be able to see where they can make their money and not have to dig through the plan. The plan document will be able to communicate these ideas simply if there are fewer than four measures that they will be paid on contained in the plan. The easier is the goals of the plan are to understand, the greater the trust and consequently more time will be spent selling and achieving both individual and company goals. When a plan is simplified, the fear that there are errors disappears and the "shadow accounting" problem soon dissipates.
Christopher Mason
Director of Sales
