Any well-implemented sales incentive plan has a few moving parts such as:
- Defining incentive plans
- Communicating incentives
- Enrolling participants
- Crediting sales transactions
- Calculating attained commissions
- Measuring sales effectiveness (reporting)
- Forecasting and managing spend
Proper sales commission automation “takes care” of those aspects. Failure to automate commissions is often not fatal, but it can be very costly (often in subtle, deeply damaging ways).
Here are a few situations where a lack of automation can cause obvious pain:
- Having no automated participant enrollment process increases the likelihood that disgruntled sales employees will quit (or sue) due to misunderstandings regarding incentives. And things get uglier if the incentive plan was not legally protected.
- Failing to provide an automated way for sales representatives to easily verify which sales transactions they were credited with, often results in significant time wasted in “shadow accounting”. Representatives then spend hours auditing transactions to make sure none was missed.
- A lack of robust calculation capabilities result in errors – often requiring last minute corrections, demoralizing claw-backs, or penny-pinching adjustments. There is also a risk of more significant errors (ex: counting refunds as purchases, incorrectly converting between currencies, double-crediting transactions, etc.).
These are just some of the more obvious pains a lack of automation can cause. However, the true (hidden) impact of insufficient automation is a gigantic time drain due to a lack of credibility.
While it might be technically acceptable to distribute old-fashioned commission spreadsheets, a modern sales force does expect an electronic portal where they can enroll in incentive plans, review crediting, and check rewards. Not providing them with this capability is what makes an entire sales operation feel amateurish.
And an amateurish-looking commission management environment is a liability and a vulnerability. It means that your sales team is much more likely to engage in commission disputes, to question your compensation model, and to try to “negotiate” various adjustments.
And so – that’s where the real cost is because your team isn’t focused on what matters – selling more. So what are you waiting for?