3 Key Ways To Successfully Measure A Commission Management Solution

  • 24 January 2020
  • Colm Barry

Commission Management systems can drive significant benefits to an organisation, especially those seeking to explore and optimize all relevant areas to gain an edge wherever they can, to fully realize their revenue potential.

At Leaptree, we explore 3 key performance areas with our customers which can be positively impacted by this technology. Those three key areas are Planning, Processing & Preventing.

1. Planning – this area is all around building out the compensation plans for the financial year/time period ahead, ensuring the plans are holistic and all connected to the relevant workstreams [e.g. sales; pre-sales; marketing; business development] and their key revenue goals. Leveraging Commission Management systems to perform this function ensures the compensations plan issued via the systems are 100% accurate and directly connected to the systems that trace deal-wins. There is also the added benefit of being able to introduce complementary compensation plans seamlessly mid-season [short-term sales incentives, for example] without disrupting existing agreements.

2. Processing – the core focus here is collating all the relevant information here to ensure the payment runs at the end of a stated period are 100% accurate. These end-of-period processes are connected directly to the compensation plans, where the exact incentive terms have been defined [e.g. commission percentages, credit rules]. Once processed, employees will receive their online statements with exact details of their commission payments.

3. Preventing‘prevention is better than cure’ – presenting timely and accurate compensation information to your revenue teams will greatly reduce the complaints. Ensuring dashboards/email notifications/statements/compensation plans are configured properly and communicate clearly is essential. Processes will still need to be supported – in a structured manner though as opposed to ad-hoc. The ability to track these queries is vital to smooth the path to increased trust, resulting in a significant reduction in challenges.

From reviewing these areas with our clients, we then set target goals to achieve within each, with 50% being the minimum acceptable target for each strand. In some scenarios, however, ‘two out of three ain’t bad’ - at least, in phase one of the implementation. An organisation may have no issues that their planning process takes 8 weeks at the start of each financial year - their fundamental issues may stem from the time it takes to process End-Of-Period commission runs combined with the volume of ad-hoc commission payment disputes they are consistently dealing with it.

Another organisation may have no real issues with their end-of-period processing workload but realise that they are consumed with payments disputes as there are no formal compensation plans in place. ‘Best shoe fits’ really applies here to achieve tangible results with these technologies.

Neil Young is Managing Director of Leaptree, a Revenue Performance Platform software company serving the Salesforce ecosystem, specializing in commission management solutions. Find out more @ www.leaptree.com