Companies in the United States spend more than $800 billion a year on sales compensation. That’s three times more than they spend on online advertising and $100 million more than the US government spends on national defense. What’s that number called? Big data.
Big data isn’t the latest square on Buzzword Bingo or a concept so esoteric and, well, big that it’s easier to ignore than use. In fact, due to cloud computing, the ability to analyze multiple terabytes of information has paved the way for practical applications that were never before possible. This capability is the foundation of Xactly Insights, a new product that helps companies gauge the success of their sales incentive compensation programs.
Google’s Eric Schmidt is fond of saying, “In God we trust. Everyone else bring data.” But at Xactly, it’s believed that you can “incent right” only if you have big data that shows how your incentive-compensation plans and business processes compare to those of other companies of similar size, in the same industry, or across industries. In essence, the big data that exists within Xactly Insights lets customers know for sure, by delivering insight and benchmarks, when their compensation plans are actually achieving business objectives.
Even though compensation costs are so much higher than national online advertising spending, many companies fail to scrutinize compensation plans as closely as they monitor marketing spending. Businesses may not be very efficient at measuring, iterating, and optimizing their incentives and compensation, in part because there hasn’t been a good source of empirical data to inform or measure compensation plans.
This is the gap filled by Insights. Xactly has the only 100 percent cloud-based, multitenant compensation software in the market. That’s not just bingo-card fodder, either; it means that Xactly has the unique ability to gather an ever-growing amount of sales-performance data and from it develop insight and benchmarks that empower companies to align incentive compensation with sales strategy.
Sales leaders know that there are many factors to consider when drafting incentive-compensation plans. But because objective data hasn’t been readily available, plan design typically has been guided by academic research and consultants’ best practices.
Empirical performance data adds a crucial element to the equation, so sales leaders can get to the root causes of some of their perplexing issues. Consider these examples:
If too few sales reps are hitting quota, it could be that their compensation plan has too many measures, resulting in divided focus. Based on Xactly’s analysis, the ideal number is three measures; more than five is a sure recipe for frustration.
Are you worried about retaining your top salespeople? Data can provide an indicator. Take a look at this year’s sales numbers compared to last year’s. If your rock stars’ numbers are down, they may have one foot out the door. A few tweaks to your compensation plan might be all it takes to keep them.
These are just two examples of the actionable insight that comes from tracking big data. Companies that use data to optimize their incentive-compensation practices position themselves to drive better employee performance and engagement, leading to higher sales and greater organizational efficiency.
In short, Xactly Insights will provide the critical information your company needs to make strategic compensation decisions and “incent right.”
For more information or to tap into the data power of Xactly Insights, go to http://insightsassessment.xactlycorp.com/icat/