Sales effectiveness is a complex juggling act. You need to react quickly to competitive advances and business climate changes while ensuring retailers, dealers and other sales channels can access accurate compensation data on demand. For most organizations, it’s more than a homegrown incentive management application can handle. That’s why organizations are increasingly turning to incentive management technology such as that provided by Callidus Software. Most recently, Bell Canada selected Callidus for solutions to automate the design, administration, reporting and analysis of incentive compensation.
Telecom companies like Bell Canada face three main challenges – all of which can be solved through technology, observes Shanker Trivedi, vice president, chief marketing officer at Callidus Software. The challenges – which are not unique to telecom organizations – are these:
1. Distribution. In the telecom industry, companies gain competitive advantage and win the war for market share through their distribution network. If the network is strong and efficient, and if they’re pushing your product, you win. Think about walking into a Radio Shack store to buy a cell phone. There are multiple choices, many of which look almost exactly the same. So most of the time, it’s the sales rep’s enthusiasm for one phone versus another that makes the difference. Gaining that enthusiasm, and thus gaining market share, has everything to do with your management of distribution incentives, says Trivedi. “The more accurately, quickly and targeted you pay people, the better you’ll do,” he says. Yet a huge challenge for telecom providers is paying distributors on time and accurately – many can’t do it. Technology minimizes the probability of inaccuracies.
2. Business agility and change management. All companies struggle with the ability to adapt quickly to changes in the market. It’s a particular headache for telecom companies because they design and offer new calling plans every few weeks to keep up with competitive pressures. The problem comes when sales compensation plans can’t keep up. If companies are going to successfully sell their new calling plans, they need to reward sales reps for selling them. Yet compensation plans aren’t reflecting the change in the company’s product line; reps are still being rewarded for selling old plans. “I’ve sat in meetings where executives said they wanted to change direction and I said okay, let’s change the compensation plan and the finance guy said that would take six months,” says Trivedi. “If you want reps to sell it, you need to reward it.” Trivedi says Callidus software can change compensation plans within hours and deploy them throughout the organization.
3. Consolidation; mergers and acquisition. As companies merge and consolidate, there’s a rationalization that needs to happen. Take the Sprint/Nextel merger, for instance. Between them, they had four or five incompatible compensation systems, says Trivedi. It’s the same story in other industries, as well. When First Union bought Wachovia in September 2001, a similar problem surfaced. First Union had relied on a homegrown application to track incentive pay; Wachovia relied on spreadsheets. Ultimately, the new Wachovia selected Callidus TrueComp incentive management software, which automated the tracking of referrals and payments in the general bank. The software also has an economic modeling function for managing a collection of more than 30 incentive compensation programs for more than 25,000 payees, mostly tellers and the hierarchy above them in the retail bank. “Each company should have a single compensation system,” says Trivedi. “You’ll have different compensation plans within a company, but a single system allows you to reduce back-office costs.”
For more information, visit www.callidussoftware.com.