As a CMO, I have the opportunity to speak with many sales leaders about their experiences with sales performance management (SPM) solutions. One recurring frustration they share is the struggle with inflexible systems that create more problems than they solve. I recently spoke with a CRO who expressed challenges with their current platform: "There's always going to be that 5% of data that’s not right—but if you get 95% right, that’s okay. I feel like [our current solution] gets it right only 40% of the time. What's worse, it's a black box, and sellers can't see why they are getting paid what they are. The minute a salesperson thinks they’re getting shortchanged, their head is out of the game." This isn’t an isolated issue. Studies show that fewer than 50% of sales representatives have met their quotas every year since 2017. While there are likely many culprits for this, one thing we do know is that companies using manual sales planning and compensation processes lose 2%–5% of revenue due to inefficiencies and unoptimized rep assignments. The True Cost of Compensation Confusion When sales reps don’t trust their compensation system, the impact goes beyond frustration. Lost Productivity If you work in comp, you know that your goal is to keep sellers selling. But when you have a tool that doesn’t give reps complete transparency into what they’re earning and why, they spend their time verifying commission calculations and sending you questions about it. Instead of selling, they’re spending up to 10% of their time on unnecessary admin work. Meanwhile, admin teams end up spending too much of their time dealing with compensation disputes, pulling reports and responding to inquiries. Financial Losses On the surface, 2% revenue leakage from compensation errors (both human and system) may seem small. But at scale, that 2% means millions in lost profit! Overpayments don't just drain budget. They force finance teams to track down errors, process corrections, and reconcile discrepancies. Inaccurate payouts also throw off financial forecasts, making it harder to predict expenses and plan with confidence. Morale When reps don’t trust whether they’re being paid correctly, they get upset. (Rightly so!) What happens then? First they get disengaged, then they start looking for a new job. And as you know, the cost of replacing a top-performing sales rep isn’t just the resources you have to pour into hiring a new one—it’s lost deals, missed quotas, and longer ramp-up time. Why Inflexibility is a Business Killer One of the biggest challenges with legacy systems is their inability to scale and adapt to changing business needs. One executive described the frustration of working with a rigid system: "Our team has to pull a bunch of manual reports just to figure out why clawbacks happened. The impact? Reps believe they're being shortchanged, and once that trust is gone, it's hard to rebuild." It’s worth asking yourself: Have I built complex workarounds just to make my compensation system function? Have I accepted that these inefficiencies are just part of the job? For example, legacy systems often: 1. Struggle with Large Data Sets Legacy systems often fail to handle the sheer volume of CRM, HRIS, and transactional data required for accurate commission calculations. KPN, a leading telecommunications company, faced major challenges with its compensation system’s ability to process large amounts of data, leading to payment delays and inefficiencies. Their compensation system took up to 28 hours to process payments, requiring more than 20 people to manage the workload. Slow calculations led to payment delays, errors, and frustration for sales teams who couldn’t trust their payouts. 2. Require Extensive Manual Work In rigid systems, adjusting quotas, credits, or deal structures requires manual intervention. ServiceNow struggled with slow, manual quota adjustments that created unnecessary bottlenecks, making it harder to adapt to changing sales conditions. Every update required manual work, slowing down approvals and delaying sales plan rollouts, leaving reps uncertain about their earnings. 3. Lack Deep Analytics Legacy systems provide only basic descriptive data, making it difficult to analyze sales performance, identify trends, or pinpoint issues in compensation plans. Colt Technologies couldn't track or analyze how compensation changes impacted sales performance. Their outdated system required external IT consultants for even minor adjustments, delaying changes and limiting the insights needed to optimize sales incentives. The Path to a Smarter Compensation Solution Does any of this sound familiar? If so, know that it doesn’t have to be. It turns out that there is a better way. How do we know? Because we work directly with many of the world’s leading sales organizations. What do they do that’s different? Importantly, they don’t spend time wrestling with rigid compensation plans. They use flexible, automated systems that make it easy to adjust quotas, align incentives, and pay reps accurately. That means fewer disputes, less time spent fixing errors, and more confidence that compensation is driving the right sales behaviors. In fact, in our experience, organizations that adopt AI-powered, integrated SPM solutions see revenue uplifts of 4%–10%. A modern sales compensation platform should give you: Real-time transparency – Sales reps should have clear, immediate visibility into their earnings and adjustments. Automation and accuracy – Less manual work means fewer errors, faster payouts, and more time to focus on optimizing sales performance. Scalability and flexibility – Whether you’re adding new sellers, adjusting quotas mid-year, or updating incentive structures, your compensation system should handle changes quickly without hours of manual work. Predictive insights – AI-powered analytics should analyze sales territories to spot imbalances and make recommendations, mitigate risk by identifying sellers or customers at risk of churn, and spot flag under-resourced accounts before they become a problem. What Are You Actually Paying for Your Comp Software? An outdated compensation system may seem cost-effective on paper, but the hidden costs tell a different story. Lost revenue, wasted time, and manual work add up fast. Companies that aren’t using an integrated SPM solution struggle to adapt to market shifts, leading to delays in sales plan distribution and missed revenue opportunities, effectively leaving sales teams sidelined. Without a truly flexible system, every adjustment to quotas, territories, or incentives means spreadsheets, workarounds, and back-and-forth approvals. Reps wait for clarity, admins spend hours fixing errors, and forecasting becomes reactive instead of strategic. Is your sales compensation system holding you back? The right compensation system doesn’t just pay reps, it fuels growth. If yours isn’t doing that, it’s worth exploring a solution that keeps up with the evolving complexity of your sales organization. See how a modern compensation system can improve accuracy, efficiency, and revenue performance today.
Bill Hobbib
Chief Marketing Officer
