Sales Management Association Webcast Winning the … · 2018-02-04 · Sales Management Association...
Transcript of Sales Management Association Webcast Winning the … · 2018-02-04 · Sales Management Association...
Sales Management Association Webcast
21 November 2013
Presented by
Winning the Business Case for Sales
Performance Management (SPM)
#WinningSPM
About The Sales Management Association
A global, cross-industry professional association for sales
operations and sales management.
Focused in providing research, case studies, training, peer
networking, and professional development to our membership.
Fostering a community of thought-leaders, service providers,
academics, and practitioners.
Learn More: www.salesmanagement.org
#WinningSPM
Today’s Panelists
#WinningSPM
21 November 2013
Introduction
Sales Management Association Webcast
Presented by
#WinningSPM
Key Drivers for Sales Performance Management
Understand the Stakeholders
Financial ROI
Risk Mitigation
Sales Force Motivation
Business Visibility
Q&A
Wrap-Up
OUR TOPICS FOR TODAY
KEY DRIVERS FOR SPM IMPLEMENTATION
SPM
Business
Visibility
Financial
ROI
Risk
Mitigation
Sales Force
Motivation
SPM VALUE – UNDERSTAND THE STAKEHOLDER VIEW
• Identify all stakeholders – Decision Makers
– Influencers
• Figure out what is important to each stakeholder
• Build a case to address specific needs for each individual stakeholder. – A generic business doesn’t work well
MASSAGE THE MESSAGE PER AUDIENCE
Driver CEO CFO CIO VP Sales VP Sales
Ops
Internal
Audit
Financial
ROI
Risk
Mitigation
Sales Force
Motivation
Business
Visibility
FINANCIAL ROI
SPM
Business
Visibility
Financial
ROI
Risk
Mitigation
Sales Force
Motivation
FINANCIAL ROI – OVERVIEW
How to Calculate the ROI?
Step 1 - Calculate the System Costs
Step 2 - Estimate the Total Cost of
Ownership
Step 3 - Determine the ROI
FINANCIAL ROI – SYSTEM COSTS
Overpayments • Gartner estimates that manual systems such as spreadsheets produce an
average 3-8% error rate in overpayments. These errors are rarely reported and the funds are almost never recouped.
Shadow Accounting • Experts estimate that sales personnel spend 8 to 24 hours per months shadow
accounting – ensuring their commission payments are accurate
Excessive Sales Personnel Turnover • HR experts estimate the cost of replacing a sales person is 1.5 times their
salary
Payment Disputes • Manual systems lead to payment disputes which waste sales rep salaries,
unrealized revenue due to loss of selling time
Plan Administration Costs • Aberdeen Group estimates that the average company spends $1,500 per year
to administer their plans
FINANCIAL ROI – ESTIMATE THE TCO
FINANCIAL ROI – CALCULATE THE ROI
ROI Payback is the period that a capital investment would be paid back based on savings and revenue increases:
ROI Payback Time in Months
TCO = 12 X Capital Investment
divided by:
(Estimated Annual Savings)
(Estimated Annual Incremental Value) +
FINANCIAL ROI – CALCULATE THE ROI
• Calculate the savings or recovery percentage for each cost – Shadow accounting costs
– Overpayment costs
– Administrative costs
– Excessive attrition costs
– Dispute costs
– Dispute lost revenue
• A well implemented SPM system that should allow for 50-75% recovery of costs or incremental revenue realization, compared with spreadsheets or legacy systems
FINANCIAL ROI –TIPS
• Weigh the hard costs versus the soft
costs – Some of the cost ranges we have cited are based
on studies rather than on your business processes
– When measuring performance against a study, be
conservative about using the data
• Create an ROI Spreadsheet – Some straightforward calculations are listed in the
Iconixx White Paper
RISK MITIGATION
SPM
Business
Visibility
Financial
ROI
Risk
Mitigation
Sales Force
Motivation
DRIVER # 2 – RISK MITIGATION
Loss of Key Resource(s) in Comp Admin
Identify resources who are singularly responsible for key
functions
Paint a scenario where a key employee abruptly leaves, or
becomes unavailable
Educate management about Single Point of Failures
Highlight the dependencies on Individual Heroics v/s
Systematic Processes
DRIVER # 2 – RISK MITIGATION
Over Payment – With system, comes in processes and discipline
– High risk, if you have lots of shared/split credits
SOX / Audit Compliance – Highlight the risks presented by Audit failures
Lawsuits from Employees and Partners – Provide references to past or current lawsuits
– Risks to the brand as an employer
SALES FORCE MOTIVATION
SPM Sales Force
Motivation
Business
Visibility
Financial
ROI
Risk
Mitigation
DRIVER # 3 – SALES FORCE MOTIVATION
Align Comp Plans w/ Business Strategy
Short Term
-Frequent SPIFFS, a potent tool for business success
-SPIFFS, being temporary, are difficult to manage
-Highlight a SPIFF that is relevant to your business
Long Term - MBOs are great tools to ensure long term alignment
- System tools can facilitate the Workflows and Processes
- Highlight a few MBOs that are important
DRIVER # 3 – SALES FORCE MOTIVATION
Enhanced Reporting For Salesforce
Ability to publish reports more often
Frequent Reports Proactive Alerts Better Sales
Improved Trust in Commission Payments
BUSINESS VISIBILITY
SPM
Business
Visibility
Financial
ROI
Risk
Mitigation
Sales Force
Motivation
DRIVER # 4 –BUSINESS VISIBILITY
Territory Planning and Quota Planning
Highlight the guess work in planning the Quotas and Territories.
Point to a recent situation where Quota/Territory had to be updated
in the middle of the year
Forecasting and Modeling capabilities of SPM tools put some
science in the art of quota planning
DRIVER # 4 –BUSINESS VISIBILITY
Business Dashboard
Mock up a graphical Dashboard that your executives may appreciate
Reporting for external Channel Partners
Comparative Analysis across Managers and Territories
CONCLUSIONS
Calculate your anticipated ROI – A thoughtful calculation makes a more compelling
business case
These calculations are important for: – Reducing Risks
– Improving Employee Performance
– Aligning Business Goals and Plan Effectiveness
– Enhancing Management Insights
CONCLUSIONS
According to Gartner MarketScope Reports, SPM solutions result in…
Compensation spend decrease by 5%
A reduction in overpayments by 8-10%
40% less disputes from sales
A reduction in shadow accounting by up to 90%
And up to a 3% increase in revenue per sales payee
Questions and Discussion
Enter your questions in the
“Questions” box on the right
hand side of the webinar
application window.
Did we run out of time before we got to your
question? Presenters can follow-up with you
via email. Feel free to submit more questions if
you’d like an offline response.
Who’s role is SPM Implementation?
Which function in the
organization should lead and
SPM initiative?
Who should be involved?
Do you see sales operations
teams involved in these
decisions?
SPM vs. MBO?
Can SPM systems incorporate
MBO systems?
Sales Team Response to SPM?
What is the real impact of SPM
on the sales team?
What does SPM cost?
Is the cost per person, how do
you size the cost?
#WinningSPM