When evaluating Sales Performance Management (SPM) solutions, it’s easy to become enthralled with each vendor’s cool new features. Who doesn’t want the sexiest looking dashboards? AI and Machine Learning can be useful. Gamification sure sounds fun.
But how valuable is a cool feature if you can’t first address all your core, fundamental incentive compensation challenges? And how can you really know if all your needs will be met by a solution? To help you focus on what is most important when evaluating SPM solutions, consider these three foundational imperatives.
Every SPM vendor solution can look up a commission rate and perform simple calculations to determine commission. And if that’s all you do today, and all you’ll ever do in the future, then any solution can do the job. But what if you have interdependent payout metrics, for example where aggregate team performance drives individual payout curves? Or attainment of multiple summary goals determines transactional rates? Do you have complex crediting requirements that require evaluating multiple, time-based, hierarchical and matrix attributes? Are you sure everything can be handled within the SPM solution, without requiring pre-processing or external programming?
The point is it’s infinitely better to work with vendors up-front to setup the right evaluation criteria, to prove out the right use cases, rather than assume all will be all good and end up having to work around product deficiencies. Make sure you know precisely how each solution meets all your requirements today.
But no matter how well you define success criteria for the proof points in your evaluation, there will be unknowns. How can you ensure you won’t have a “bad surprise” down the road? The answer is to select a solution that is flexibly adaptive.
Most every solution provides some “best practice” guidance, setup wizards, out-of-the-box structure and leads you down the incentive compensation path. But what if you need to go off that path? How easy is it to add a new data source with your nomenclature and setup a new way of calculating results that hasn’t been done before (e.g. calculate a 10-week moving average sales metric by product and salesperson to drive dynamic weekly commission rates)? What if you need to do things differently than the way the vendor’s solution wants you to do it?
Make sure you fully evaluate, understand and appreciate the process for setting up new and different compensation data sources, calculations, plans, workflows, etc. Too much structure, too many “just fill in the blank” processes, will eventually feel more like a straitjacket instead of a helpful, guiding hand. Flexibility to adapt to new requirements is critical.
Only after you’re truly confident a solution fully meets your needs today without pre-processing or other workarounds, and the solution is flexible enough to adapt to your unknown future requirements, should you allow yourself to be wowed by cool features. But even then, make sure there is value beyond the cool factor. Is a vendor’s use of AI a gimmick? Or does it intelligently answer salespeople’s questions, significantly reduce the number of inquiries your compensation team needs to respond to, and help you understand the “why” instead of just the “what” of business? Only when it adds real value is a capability truly cool.
Clearly there are additional important factors to consider when evaluating an SPM solution – is the vendor dedicated to your success and do they provide excellent support, are there happy customers willing to talk about their experiences, is the vendor’s cloud safe and secure, etc. – but those are for another post.
These are the basics, the core of evaluating potential solutions. The path to success begins with focusing on what is truly relevant and important and not getting distracted by cool but secondary factors.
Varicent flexibly addresses the heart of what you need today and tomorrow, unlike any other solution. And it has some very cool, whiz-bang features – but don’t let them distract you.