Realise the potential of superior compensation management – IBM Sales Performance Management

IBM Incentive Compensation ManagementAlign Sales Performance with Sales Strategy Alan ChapmanGeneral ManagerIBM Sales Performance Management

► Sales Incentive Compensation is the link between corporate strategy and customer-facing activity

► This business process is one of the lowest hanging fruit for savings and efficiencies

► Next generation sales forces will need to rely on data for competitive advantage

Three Axioms

Show me the sales incentive plan …“

and I’ll show you the company’s business

priorities”

Priorities are reflected in comp plans and configured in SPM systems

territory definitions, account assignments, plan measures, rates,

crediting rules and more

“Our main goal was to get more strategic… flexibility meant everything in enabling us to clarify that vision and execute on it.”“IBM Incentive Compensation Management can support every idea we have in terms of how we want to manage compensation.”

— Getty Images

Tailor incentives based on company priorities

Bonus for bundling multiple key products together (e.g. mortgage along with insurance)Recognizing cross-selling new product families to their customers (e.g. first long-term debt product for that household)Rewarding employees for referring customers to another business unit

— An IBM customer, North American bank

Reward associates who have spent time helping their guest choose a whole outfit IBM ICM analyzes sales tickets to identify associates whose guests have purchased a shoulder garment and three other items

Extra 2.5% commission on the sale— Destination XL



Drivers Incentive Plan Route efficiency

(units per hour) Customer satisfaction Safety (hurdle for

participation)— Waste Management

Sales rep dashboards to understand how they’re doing and target their future efforts




Three Axioms

Many firms still rely on a patchwork of spreadsheets, email, manual processes, and outdated legacy systems to manage and administer variable comp plans

Manual stepsWorkaroundsErrors

Legacy approaches are a drain on the company

Is it hard to imagine why?

Is it hard to imagine why?

With IBM – administrators organize their business logic visually to gain efficiencies, reduce errors and facilitate collaboration

Cost of errors and commission overpayments estimated at greater than $1 million per year

— An IBM customer in financial services

FACT #1

REDUCE ERRORSBY MORE THAN

90%

FACT #2

REDUCE IT/ADMINSTAFFING

BY MORE THAN

40%

FACT #3

REDUCE PROCESSING

TIMESBY MORE THAN

50%

“Enterprises will miss the equivalent of 5% to 10% of annual sales as “lost opportunities” which could have been captured by improving the management of overall SPM”

“many plan participants maintain their own compensation tracking documents that they use to double check their compensation departments' calculations.”

— David O'Connell, Aite Group

Focus Sellers on Selling

“By having transparency into the system we don’t have to worry about them saying, ‘Wait—I don’t get this.’“…spend more time selling”

— An IBM customer in mobile e-commerce

“If you don't get your territory right, you can't get you incentive compensation right. If you can't get your incentive compensation right, you can't motivate your sales team. We knew that the foundation needed to be started with territory management.”

— EMD Millipore https://www.youtube.com/

watch?v=-25WYf8YiL0

“Previously, they only received compensation reports on a monthly basis; now, they have daily insight.” “By checking their own performance regularly, they can keep themselves on track to hit their targets.”

— Huntington Bank

Utilize mobile technology for field sales staff

“Over 1400 of our field sales reps can access their sales compensation system via their iPads along with the other tools they use on-site with customers.” “They don’t miss a beat when it comes to understanding the compensation implications of their selling activities.”

— An IBM customer in the media industry




Three Axioms

SPM Maturity Curve

Scaling a Market

Time

CHAOS pre-ICM

STABILIZE the operation

OPTIMIZE decisions & processes

SPM

Com

pete

ncy

and

Valu

e

Manage your sales team

Pay for Performance

YTD

Sale

s

YTD Quota Attainment

Boom Bust Analysis

2013

Atta

inm

ent

2014 Attainment

Quota Distribution Top & Bottom Performers

Ranking1234

RepMarilynAbdulSteveJian

Attainment183%121%98%42%#

of R

eps

Quota Attainment %

Manage your sales team

What can we learn with Watson Analytics?

Information you might already possess. Have you ever correlated it?

► Sales by product, payee, territory and month

► Compensation: Plan type, payout by component, payee and month

► Territory hierarchy: city, state, region, country

► Payee hierarchy: payee, manager

► Time in role ► Tenure with company

► Performance rating ► Base salary► Education► Last employer► HR survey info (How

well do you understand the comp? Are you paid fairly? etc.)

► External demographics (household income, real estate values, etc.)

All Payouts Data Store

Easily get data from ICM over to Watson Analytics

Advanced analytics without the complexity

Think differently

Designing effective comp plans

Coaching your sales

reps

Territory decisions

Hiring the right sellers

Prioritizing leads

Smarter quotas




Recap: Three Axioms

To learn more

ibm.com/spm

Business

Realise the potential of superior compensation management – IBM Sales Performance Management