Drilling Down Into Big Data to Manage Variable Incentive Risks

Drilling Down Into Big Data to Manage Variable Incentive RisksMarisa Massie

Controller, Bazaarvoice

© 2014 Proformative

2

Common Ground Across Industries

Success in Subscription Economy: Role of the Controller

Big DataSaaS and

Sales Comp Leader

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&docid=c3g676KX2iYwJM&tbnid=vg9Y1fJ3FuADTM:&ved=0CAUQjRw&url=https://twitter.com/Zuora&ei=PY1QUsC8KITI9gTjuoCwDQ&bvm=bv.53537100,d.eWU&psig=AFQjCNHN1woQo2FLm-wh5AZfJz8NlmcX9g&ust=1381097138848823

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=phLxUlqPI5YvWM&tbnid=3EwvKQ2UJ9TYJM:&ved=0CAUQjRw&url=http://www.joinsoftcorp.com/joinsoftcorp/pages/Clients.aspx&ei=gL5RUqGIAoWA9QTewoHIAg&bvm=bv.53537100,d.eWU&psig=AFQjCNFz5ivdswN9IDTjYjILHm0iC3ueqA&ust=1381175276639345


1.Source: Forrester Research

3

By 2016 an estimated

52% of total online and offline retail sales will be influenced by Internet content(1)

Confidential and Proprietary. © 2012 Bazaarvoice, Inc.

4

MillennialsTrust & influence.

2012 study by Bazaarvoice and The Center for Generational Kinetics

51%

84%59%

Trust strangers’ opinions over friends and family.

are influenced by UGC.

List internet as their main news source.


Bazaarvoice powers a network that connects brands and retailers to the authentic voices of people where they shop.

Brand content can be displayed across multiple retail sites

Content syndication across the Bazaarvoice network

Brand X

473BImpressions served since inception

145BImpressions served in FY2013

400MAverage impressions

served per day in FY2013

Global blue chip client base Travel and LeisureConsumer Products Financial ServicesRetail Technology


Evolution of Sales Performance Management

10

Big Data Plan Performance

Integrated SaaS Tools CRM & Sales Comp

3 MeasuresHunter vs. Farmer


11

Invest in the Top Line

Top 3 Investments

Cap Ex IT Sales Comp

Sales Comp 15-25% of Revenue

Get the comp plan right deliver the top line


12

Invest in Sales Comp – dramatically higher ROI

• Measure Plan Success • Deliver on key metrics

• Pay for real performance

• Lead data-driven decisions• Benchmarking

• Predictive Analytics

Invest in Excellent Data

What is the right Data to invest in?


13

What is Plan Success ….vs Saleperson Success?

Salesperson Success

• Made Quota – Going to Club

• Made OTE

• Paid on big deals

Plan Success

• Company hit sales targets• Right markets, right markets

• Achieved on all 3 elements• Not through SPIFFs, exceptions, etc.

• Paid without caps for the right deals


14

Managing Variable Incentive Risks

“Commissions paid, sales targets

missed”

“Risk from Blue Bird deals”

“Pay for Performance”

“Invest with Confidence”

“Game the Plan”


15

It All Seems so Simple When We Start

CFO SalesRevenue

GoalsMarketsProducts

Profitability

BehaviorsNew Business

ProductsRenewals

Cost Envelope Target OTE

Commission Plan

Quota Rates


16

When Does it Get so Difficult?

Experience Sword

http://images2.wikia.nocookie.net/__cb20110526214234/princeofpersia/en/images/9/9e/King's_Sword.jpg

http://images2.wikia.nocookie.net/__cb20110526214234/princeofpersia/en/images/9/9e/King's_Sword.jpg


17

What are the Battlegrounds?

Quotas

Payout Curves

Bluebird

How many measures?

“Outside Plan”

60% hit quotaOverassign wisely

Keep selling

Manage the rate per credit

Only ThreeLeverage Policy

2-3% OTE [across the business]

Midyear quota resetSplits w/o quota

Capped curves drive sales to next year

Capped payments

Build two measures into one

SPIFs, quarterly bonus, new logo, product

TRUSTCOMPLEXITYPLAN ELEMENT


18

Measure What You Manage

CFO EVP Sales

Revenue goalsMarketsProducts

Profitability

Behaviors ProductsRenewalsMulti-year

Quarterly consistencyProfessional Services

Outclauses

Cost EnvelopeTarget OTE

Club?

Commission PlanQuota Rates


Fast Feedback Reinforces Behaviors

Selling New Products

Everyone Wins

Contract Length

Longer, but not too long

Renewals

Collaboration

50% 30% 20%


20

Measure the Effectiveness of Your Plan

• Cost per revenue $$ or product?• Include everyone paid on the products

• Desired deal structure?• Product mix

• Contract term

• Cross-account customer profitability?


21

Insights & Benchmark Examples

• Executive• Quota Setting• Quota Modeling• Quota Distribution• Productivity by Product,

Region, Rep

• Finance• Sales Comp Profitability

(Spend/Revenue)• Spend by Plan• Spend by Role

• Sales Ops• Model Comp Plan• Payout Curve Benchmarking• Payment Triggers• Model Crediting• Effective Commission Rates

• IT• Data Quality• System Usage Distribution• Processing Distributions

v


22

How do you Invest in Excellent Data?

1. Tie all commission credits and payments to specific transactions

2.Architect your data across CRM, Sales Order and Comp ecosystem

3. Measure ALL payouts



23





24

Connecting the Dots to Big Data

Opportunity

Sales CompQuota/Commissions

Product Pricing Payment

Quote

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=InCuD3-o3YsvXM&tbnid=PMZ7rWhMwxjtPM:&ved=0CAgQjRwwAA&url=http://www.hbasecon.com/sponsors/&ei=S_VvUv_fBo2A2QXq1YGoBA&psig=AFQjCNHvOjH4NGYtlDv7qJcdAuzlwmkr_Q&ust=1383155403346094

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&docid=e_4Bd7FstoR8YM&tbnid=DZtgOR0dp7DWDM:&ved=0CAUQjRw&url=http://pictogram-free.com/39-person/041-person.html&ei=g_ZvUtmbKYSo8QGX44GwCg&bvm=bv.55123115,d.b2U&psig=AFQjCNG4CqIMhHUfyQhXI7iyphDEymjYsQ&ust=1383155669805232

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=OvbPeLdi1nmVlM&tbnid=JSbTVA21v8BFBM:&ved=0CAUQjRw&url=http://www.clker.com/clipart-267021.html&ei=O_dvUo-qN8OR8gHBt4GQCw&bvm=bv.55123115,d.b2U&psig=AFQjCNHq6kGpgpNwqWMqlBpBUyNBqpnRww&ust=1383155874368671

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=gCtq0hn7EK7irM&tbnid=z0xoBXoZGLTE5M:&ved=0CAUQjRw&url=http://www.iconarchive.com/show/finance-icons-by-visualpharm/invoice-icon.html&ei=jvhvUvPHOKSl8gGx5oCQCw&psig=AFQjCNGAkqrmBurHNyKlrM8d2FN5Ty68eA&ust=1383156198200123


25

1. Tie all Payments to Transactions

Order line details drive credit calculationOrder info, order start date, order end date, term, product ID, account or order ID

Leverage your comp system to calculate the credit and retain ‘references’ to opportunity, contract and account

Data transformation = data loss


2. Robust Data Architecture

26

Lead

Account &

Territory

Opp’ty OrderCompCredit

Source

Inside sales

Partner

Parent

Territory

Region

Sales Team

Support roles (e.g. SE)

Product

Terms

New or Renew

Tie to Order / Oppty / Accoun

t

Value-add data resides everywhere

Comp Tool

CRM


27

2. Automate and Enrich Data

LeadAccount

& Territory

Opp’ty OrderComp Credit

Comp Product Family

SPIF Object

Commission Event Object

Account Team for Splits

Role-based share

Credit Type

Deal Object


28

3. Measure All Payments

Trade-off ‘discretionary’ items to fund more impactful design elements

• Outside of Plan elements: Professional Services

• Expensive add-ons: SPIFs, Quarterly bonus,

• Unplanned expense: Exceptions, adjustments

Create Unique tracking IDs for these in Comp System

All Payments through Comp Team


29

Payback is Data-driven Decisions

• Maximized investment in highest value plan elements

• Robust risk modeling and forecasting

• Effective sales performance management

• Motivated sales team



30





31

Benchmarking Opportunities

Compare through ‘independent’ sources

• Benchmark vs. self• Prior year Plan Design Success• Monthly progress of current Plan

• Benchmark vs. others• Organize data to enable benchmarking


32

Quota Attainment vs Industry Benchmark

Attainment 0-80%

Attainment 80%-120%

Attainment Over 120%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

50%

15%

35%

20.00%

65.00%

15.00%

Attainment

Benchmark


Payout Curve Benchmark

PAYO

UT

%

0% 50% 100% 150% 200% 250% 300%0%

50%

100%

150%

200%

250%

ATTAINMENT %


34

You’re Not Alone…

Sibson Software Sales Comp Forum

• Renewals comp in ‘Hunter’ Plan

• Crediting new products

• Goal for 100% attainment / club

• Blue Bird Clauses

• SaaS vs. Software Sales comp


35

Benchmarking – Data Driven Decisions

• Start by analyzing your own performance

• Identify highest value areas

• Reach out to data sources


36

What’s next? Where do you go from here?

Assess commission data quality

Evaluate plan effectiveness at same level you designed

Look for benchmarks in preparation for next year’s plan

Invest in the infrastructure



37




Specific Transactions Architect Data Measure ALL

Measure Plan Success Start Benchmarking

Define Plan Success Design with trust


Xactly Solutions

38


39

Questions

Marisa Massie

[email protected]

415-728-2932

Subscription Economy: Role of the Controller

Zuora – Subscription Economy - eBook

@marisamassie

http://www.linkedin.com/in/mmassie

mailto:[email protected]

mailto:[email protected]

Drilling Down Into Big Data to Manage Variable Incentive RisksMarisa Massie

Controller, Bazaarvoice

Drilling Down Into Big Data to Manage Variable Incentive Risks

Business

Transcript of Drilling Down Into Big Data to Manage Variable Incentive Risks