Organizations that are driven by sales need to have every aspect of their sales process effectively managed and leveraged to bring them the maximum revenue at the lowest cost. Many organizations will turn to Sales Performance Management solutions to improve efficiency, but these solutions only cover some of the reasons why sales teams might be underperforming, and some SPM solutions can even lead to more administrative costs. One process that sales organizations often overlook when trying to improve efficiency is incentive compensation management, even though sales incentives are a driving force for sales teams and representatives.
Many sales organizations try to effectively motivate their sales teams using Sales Performance Management strategies, including SPM software to help their sales managers. However, these SPM software solutions can often focus on things like helping sales representatives organize their prospects, streamlining the sales process or motivating representatives through non-monetary rewards like mentorships or incentive clubs. While all these strategies can be effective, the most effective motivation for sales representatives is regular and accurate incentive compensation payments, pure and simple. When sales reps are kept up to date as to their sales incentive earnings, they know that their organization values them and wants to reward them for excellence. If an SPM solution doesn't include ICM system, then it can fall short of these expectations and leave a gap in performance management.
Sales management software solutions that neglect ICM can also cost a sales organization money in the form of administrative costs. When there is no automated system to track sales and calculate incentive compensation payments based on those sales, organizations have to spend money on payroll for administrative staff. Inaccurate commission payments can also cost money if they end up paying their sales representatives commissions on sales that weren't actually completed or bonuses for meeting quotas based on inaccurate records. An automated incentive compensation management system eliminates all these extra costs and saves sales organizations money.