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Increasing Sales Commission Transparency

Increasing Sales Commission Transparency

Sales commissions can get notoriously challenging, especially for larger sales teams. Along the journey to effectively manage your sales comp, you'll have to deal with

  • Different streams of data from sales data to reference data and people data.
  • Various commission plans with differing quotas and territories. 
  • Workflows and reporting to do complex comp calculations while, at the same time, keeping your team happy.

And it's a slippery slope if you get it wrong. The fact is that insufficient compensation is the most common cause for sales reps leaving their jobs. In other words, you have to do everything you need to keep your reps motivates and help them meet their quotas, and be more productive. 

When you do this, they'll stick around, and you'll generate more revenue.

This post will look at how Optus, the second-largest telecommunications company in Australia, streamlined its sales commission processes. In doing so, it dramatically improved transparency for sales reps, managers, and executives by using Performio.

Optus's Sales Comp Challenges

Like many other companies, Optus faced severe challenges in their compensation management before using Performio.

These challenges typically include:

  • Outgrowing their legacy in-house solution. Before using Performio, the commissions and operations team at Optus calculated commissions using Excel and an in-house legacy solution. Now, for only a few sales reps, this could be easier, but at that stage, Optus already had 250 employees on the team.
  • Using highly complex plans that changed frequently. Another big problem it faced is that it had highly complex commission plans that changed frequently. It's simple, the market evolves, and changes in the market often mean changing business processes. In turn, this requires a shifting commission policy and a change in the way a company wants to incentivize its employees. As a result, when you use a data model that is not robust enough to accommodate flexibility, it causes a problem in your sales management processes.

The Transparency Conundrum

One of the biggest problems, though, was that, at the time, its processes lacked transparency and audibility. This was simply a result of different people calculating commissions using different bespoke in-house solutions or Excel worksheets.

At the time, sales reps received their results once a month via a spreadsheet or a PDF version. That was the only statement they had to show how their commissions were calculated. In simple terms, they had no real insight into the commission structure and its calculations.

Therefore, Optus knew that it had to find a solution that had this transparency built-in, which could also improve compliance and auditing. 

Enter Performio

To solve this problem, Optus decided on Performio, not only because it could allow it to meet its goals and solve its challenges, but also because the platform would scale with the business. This is vital, especially considering that Optus now has over 2500 sales reps. 

Performio gave it the system that could demonstrate to sales reps that the commission results were accurate. As such, it would enable sales reps to drill down into those results to get the information and confirmation they need.

This, in turn, provides sales reps with the confidence that their comps are calculated correctly and makes it easier for them to approach the Commissions Team if something was not right. 

And with them being able to see the commission calculations daily allows them to see their progress towards their quotas and fix problems earlier if there's a problem. In this way, sales reps are more productive, and they don't have to waste time if their commissions were calculated correctly. 

Achieving Transparency

On the way to achieving the transparency they needed, Optus focused on the components within its control. So, it started off by replicating its commission calculations in Performio to get the benefits of it.

Although this still required manually loading the data, it already gave Optus the benefit of reporting and statements that would give it the transparency it needed. Also, because it no longer had to send statements out manually, it made the commission team more efficient.

As a result of this increased efficiency, the team had more time to invest in the platform's automation aspect and ensure that the data was robust enough to automatically feed it into the system. So, ultimately, it's vital to start small and work your way up.

By doing this, it was able to focus on what matters most.

Paying people

Another way it achieved transparency was, before finalizing the commission results, it would make the results available for two to three days to allow sales reps to review their final numbers. 

This allowed both the commission team and sales reps to ensure that all the data is up to date. If there is a problem, sales reps can then point that out and ensure that their commission is calculated correctly.

Apart from providing transparency to the sales reps, it also provided much-needed transparency for the management and commission teams. This is simply because they know that they're not overpaying and that they've got suitable measures in place.

The key takeaways that can be learned from Optus' journey are:

  • Focusing on the critical elements. In other words, it's vital to focus on paying your sales reps and giving them the transparency they need to know that their commissions are calculated correctly. Ultimately, this makes them more productive and more likely to reach their quotas.
  • Starting small. Implementing the right sales commission management platform doesn't happen overnight, and it takes time. For this reason, it's better to start small with the basics and then move up to more complex implementations.
  • Working with the data you have when integrating the solution. When you integrate a platform, you shouldn't try to reinvent the wheel. So, like Optus, use the data that you have even if you have to load it manually.
  • Addressing data source issues directly. In other words, it's always better to make sure the data is accurate and correct at the source than trying to feed it into the system and correcting it there.

The Bottom Line

Using the right sales commission management software, companies like Optus can easily and quickly calculate their sales commission and gain insights from their data. This keeps sales teams happier, motivated, and more productive.

Here, Performio is a modern SaaS product that helps you manage and automate your sales commission calculation. It's designed for both mid-market and enterprise customers.

Its features include:

  • A modern user interface that differentiates it from the legacy competition.
  • A robust platform with an intuitive user interface and fast implementations.
  • A variety of integrations and a robust set of APIs.

Most of all, it's loved by customers like Optus, and it has the highest rating of all incentive compensation management platforms.

If you want more information on Performio or schedule a demo, or contact us for more details.

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