YOUR PATH TO GROWTH Best Practice Channel Sales Compensation
OUR PRESENTERS TODAY Erik Charles Sr. Product Marketing Manager Xactly Corporation Daniel Hawtof VP, Product Management Channelinsight Adam Hanin Sr. Director, Industry Solutions High Tech Salesforce.com
ABOUT salesforce.com, XACTLY AND CHANNELINSIGHT salesforce.com is the enterprise cloud computing company that is leading the shift to the Social EnterpriseTM. Our trusted cloud platform and apps including our flagship CRM solution help employees collaborate easily and connect with customers like never before. Xactly, recognizing that sales compensation is one of the prime motivators for a company's success, empowers companies of all sizes to incent right. Channelinsight solves the challenges of growing your channel sales by providing the actionable information needed to drive your channel business decisions. Together we provide the first and only channel sales compensation management solution!
AGENDA Why improve compensation in the channel? Channel Compensation Challenges Sales In vs. Sales Out Channel compensation With actionable data, the sky is the limit for creative compensation! Why haven t we done this before? It s all pre-integrated in salesforce.com
$1.2 TRILLION IN IT CHANNEL REVENUE FOR 2012 $2.058 Trillion IT Global Forecast for 2012 Gartner Forecast Alert: IT Spending, WW 2008-2015, 4Q11 Update 60% CHANNEL SALES REVENUE Tech marketers plan to increase their channel enablement budget to 8.5% of overall marketing this year, up from 7% in 2011. Tim Harmon, Forrester, March 14, 2012 CRN 40% DIRECT SALES REVENUE
SALES LEVERAGE IN THE CHANNEL
CHANNEL COMPENSATION CHALLENGES Lack of accuracy, visibility, transparency Delays in sales data submission and reconciliation Cause a disconnect between sales action and reward No real payment for performance Little planning or thought put into channel compensation Not performance based Compensation plan for Channel Sales Managers Pay on sales-in, not sales-out
WHY COMPENSATING ON SALES-IN DOESN T WORK Channel Sales reps are paid when the distributor or reseller buys product and puts into their inventory This encourages channel stuffing Want inventory to turn 4 48 times annually Stock rotation product returned from the channel Fire Sales erode value of product Manufacturer and Channel goals are misaligned
DO YOU HAVE THE INFORMATION YOU NEED TO COMPENSATE ON SALES OUT? Sales Out Model Channel Rep is paid when the product is sold to the end-customer just like a direct sales rep Must know when product is shipped Best source is POS data, difficult to utilize Reward the channel manager for moving product through the channel to end-customers
RETURN ON REWARDS: THE SCIENCE OF MOTIVATION
CONNECT THE PIECES
INSIGHT Variable Pay or Base Pay? What's the best way to incent? Pay on discount %? President's Club Eligibility?
INCENTIVES WORK
WHY DON T WE USE INCENTIVES MORE?
LACK OF VISIBILITY
MISALIGNMENT
DO YOU KNOW WHO IS BEST?
HOW WELL DOES EARNINGS TRACK PERFORMANCE?
RE-THINK YOUR TARGET PAY Establishing Goals and Rewards Quantitative and Qualitative Base vs. Variable Base Salary Target Incentive Upside Incentive $TTC Source: New Sigma Gen Y Standard
RE-THINK HOW YOU PAY Variable Pay Methodology Make it immediate Majority of variable should be individual Team bonuses can be accelerators or contests Awards President s Club Weekend escapes Gift certificates
RE-THINK WHAT YOU REWARD Product Mix?
BUILD IN SOME LEVERAGE AT MULTIPLE STEPS
DON T SETTLE FOR GOOD ENOUGH
LET SALES SEE THE WHAT IF THAT MATTERS
RIGHT TOOLS: LEADERBOARDS Show them where they stand Monitor activity (dashboards and displays) Provide feedback and guidance
RIGHT TOOLS: MOBILE
WHY HAVEN T WE DONE THIS BEFORE? Channel Sales data is difficult to collect provided in multiple formats not timely not usable
IMPROVE DATA QUALITY Data is the Achilles heel of the channel. Tiffani Bova Gartner Technology & Service Provider Research Data alone is not enough: Not Organized Not Actionable Reports and Analytics Too much data with too little insight results in an inability to understand how well your compensation plan is driving sales behavior
DATA COLLECTION Source 10s, 100s, even 1000s of different partners Manually extracted and submitted Data is not standardized Many different formats
IMPROVE DATA QUALITY Site errors identified, enhanced and learned
TRACK TRANSACTION DATA
LINK REPORTING AND COMPENSATION TO TRANSACTION DATA
BEST OF ALL, IT S ALL IN SALESFORCE Partners Market Leadership Customer Success Product Innovation The world is uncertain. Your channel sales don t have to be. Salesforce-to- Salesforce Partner Portal Forrester Wave Leader* Content Ideas Cases *CRM Suites for Large Organizations, Forrester, Q1 2010, includes assessment of PRM capabilities
SALES CLOUD FOR PARTNERS STAY CONNECTED TO YOUR CHANNEL AND GROW REVENUE Partners Maximize Channel Sales Automate deal registration, lead distribution, opportunity tracking Gain Real-time Visibility Instant insight into channel pipeline, revenue, and partner performance Work with Partners in Real-time Collaborate on opportunities, leads, and more using Salesforce-to-Salesforce Partner Portal Your Application
WHAT S IN IT FOR YOUR CHANNEL? Painless Deal Registration Exclusive pricing, discount, and rebate incentives Deal support Automated Lead Distribution Qualified leads Deal protection Reduced channel conflict MDF and Coop Reward for existing/new business Incentives tied to completion of training and certifications Intuitive User Experience Self-service, one-stop-shop Relevant content Collaboration Feedback loop
ENABLE THE ENTIRE PARTNER ECOSYSTEM ALL IN THE CLOUD Build Sell & Service Recruit Community Manage Co-Market Collaborate Measure LMS ISVs Contracts Incentives TPM POS CPQ Communicate Mapping email and Marketing Automation
COMP PLAN CHECKLIST RE-THINK WHAT YOU PAY FOR What are your buckets? Bucket 1 your volume products that drive your revenue Bucket 2 you high margin product add-ons that drive your profits Reward the behavior that the company values Don t pay for channel stuffing Don t pay for products that never leave the shelf Pay for the booked revenue! You can REPORT on where the product is, but don t pay until you are going to get paid Seeing POTENTIAL commissions will help drive support of the channel Comp Plan Checklist Re-Think How you Pay How much leverage? Higher payouts for higher throughput drives more business More steps on the staircase gives incremental goals, instead of waiting
COMP PLAN CHECKLIST IMPROVE DATA AND AUTOMATION Actionable Data from the Channel Single point of contact for all partner data Patented matching technology ensures accurate data Actionable information delivered in reports, drill-down analytics or as data export Display Data in the CRM Integrate with Salesforce.com Automate your incentive plans Daily updates of credits thanks to ChannelInsight Constant view of activity thanks to Salesforce.com Timely and accurate incentive payments thanks to Xactly
MORE THAN 2,100 CUSTOMERS SUCCEED WITH SALES CLOUD FOR PARTNERS SOURCE: SALESFORCE.COM CUSTOMER SURVEY FOR SALESFORCE PARTNER NETWORKS CUSTOMERS, CONDUCTED SEPT. 2008, BY AN INDEPENDENT THIRD-PARTY FIRM, CRITICAL METRICS LLC.
PROVEN CUSTOMER SUCCESS FASTER REVENUE GROWTH 146% SHORTER SALES CYCLES QUICKER SALES LOWER SALES TURNOVER MORE REPS MAKE QUOTA 36% 37% 25% 7%
QUESTIONS? 225 W. Santa Clara St., Suite 1200 San Jose, CA 95113 T (949) 439-3555 www.xactlycorp.com Erik W. Charles echarles@xactlycorp.com