We have this running joke in tech marketing when presenting the value of a SaaS platform and how your product is different from the competition. Essentially, you can boil it down to features and benefits. It’s easy to get lost in the details of these two things and sometimes they cross over into confusing territory where you can’t quite distinguish the differences between them. This is what we call the conundrum of featured benefits and beneficial features 😆.
All joking aside, finding the major competitive differentiator in your product and articulating that is the key to success. We’ll break down the four benefits (NOT features) of Performio’s incentive compensation management software and why components (NOT JUST rules and formulas) truly are a game changer.
When selecting a software solution for Incentive Compensation Management (ICM), it’s important to understand each option’s underlying architecture.
Some ICM solutions are powered by formulas. These are much the same as what you’ll work with if you’re doing all your ICM in Excel spreadsheets. They’re capable of handling complex plans and calculations, but they’re also error prone and don’t scale well.
A few (older) ICM solutions use rules instead. These provide users with an interface allowing them to personalize parameters to make if/then statements for calculating commissions. They’re meant to be easier to use than formulas, but they can’t handle the complexities of many common compensation structures. They also come with limited scalability (due to the lack of options to reuse elements of logic) .
Performio uses components to power our ICM software, incorporating the best aspects of both formulas and rules—without any of the drawbacks. You’ll get an easy-to-use click-to-configure interface, and you won’t be limited to a few basic rules. Performio has packed the nearly 20-years of ICM expertise and frequently used combinations of formulas and rules into predefined components, enabling simplicity and efficiency. We’ve been doing this for a long time and know the complexities of incentive compensation better than anyone.
Here are the four most important benefits of Performio’s component-based ICM architecture.
1. Components are easy to use
Formulas can be a nightmare to work with. First there’s the learning curve of mastering all the different functions and figuring out the proper syntax to use. Next there’s the tedious process of manually writing out each formula, making sure you’ve referenced the right data and performed the proper calculations. And then there’s the ongoing maintenance—a single change to a comp plan often requires dozens of little adjustments across many different formulas. And somehow you have to keep track of it all, remembering which formulas go where and what each one of them is meant to do.
With Performio’s components, you can forget all of that. Instead, you’ll be presented with a clean, intuitive UI that allows you to configure your plans without ever needing to touch a line of code. We provide pre-built components to save you time when working with the most common types of compensation calculations, and for the rest, you can easily build your own components by simply inputting your parameters into a form.
And when you inevitably need to make changes to your comp plan, you simply go back to the applicable component, make the change once, and all other affected components will update automatically!
2. Components offer complete flexibility
When building out your sales compensation plans, you never want to be limited by the software you’re using. The predefined parameters it allows users to work with simply can’t keep up with the complexity of many organizations’ comp plans. Performio’s prepackaged components streamline various ICM use cases (such as commission per sale, on target commission with new and renewal ARR, AVC or gross margin etc.), eliminating the need for complex rule or formula coding and manual testing. But the true flexibility comes with the fact that you can copy/duplicate and repurpose individual components, events, or entire plans. Imagine your entire organization has 15 different account manager plans and a few more for managers. They are similar but not quite exactly the same. With Performio, you can save time by not building these plans from scratch, but instead, you can repurpose existing plans and components. You have total control of how the components within the plans produce a payable — whether you’re measuring against an annual target or quarterly goals, what frequency the component releases commissions (for example, monthly or quarterly), or the weighting of the component against the overall plan.
By the time an organization realizes how little flexibility plan-based solutions offer, it’s usually too late. They’ve already gone through the process of integrating the solution, so they just have to make do with the limitations of their software, simplifying their sales comp plans accordingly and missing out on the additional revenue they could’ve generated. Eventually, they get fed up with it enough to look for a more flexible solution—and many of them end up turning to Performio at this stage.
We’ve already covered how Performio’s components are also easy to use, but unlike plans, they don’t limit you in any way. We offer preconfigured components to make your life easier, but you’ll never be held back by them. You can customize and modify any aspect of your sales comp plan and commissions calculations to get everything exactly right for your needs. No compromises.
3. Components offer infinite scalability
One of the biggest problems with formulas and rules is that neither of those architectures is sufficiently scalable. Either one can seem to work well enough at first—especially for smaller organizations that don’t have enough sales reps to really stress the limits of their ICM solution. But most organizations don’t intend to stay small for long.
The more your organization grows, the more sales reps and sales teams you’ll need to employ. Your sales compensation plans will become more complicated, involving more special scenarios and unique exception casse. You’ll have more commissions to calculate and pay out. And every little change you need to make will become exponentially more difficult.
Unlike rules and formulas, components are indifferent to scale. The components are all easily accessible and logically sorted, meaning you can make changes as needed without any hassle. And the whole process of calculating and issuing commissions is automated. You can pay 5,000 sales reps as easily as 50.
Performio’s component-based software isn’t just the best ICM solution for your needs right now—it’s also an investment in the future. No matter how large your organization grows, Performio will scale with you, providing peace of mind for decades to come.
4. Components provide unparalleled accuracy
The more manual input users have to provide, the greater the risk of human errors. This is one of the biggest problems with using formula-based ICM solutions. Every formula has to be manually typed out, manually linked to the data sources it pulls from, and manually updated as needed, leaving the door wide open for errors to be introduced at any step along the way.
Best-case scenario with formulas: the errors are obvious and quickly spotted. It may still take hours to track down and fix the error, but at least you know something is wrong. More often than not, though, the errors go unnoticed, resulting in inaccurate commissions being paid for as long as it takes for someone to finally realize there’s a problem. And then you’ll have to deal with the hassle of sending updated payments, issuing the dreaded clawbacks, or simply eating the costs.
With components, everything that can be automated has been. Because there are no formulas to type, the chances of human error are drastically reduced, resulting in accurate commissions you can rely on every time.
Take a closer look under the hood of different ICM architectures
We’ve scratched the surface in this article on why we at Performio chose to build its technology with components rather than just formulas or rules. But we put together a whole ebook—which you can download for free—that takes a deep dive into all three ICM options, weighing the pros and cons of each.
Check out ICM Software Under the Hood: A Guide to Rules, Formulas & Components to learn more.
And to see what Performio can do for your organization, request a demo today!