3 Keys to a Motivating Sales Compensation Dashboard
Despite what many think, sales intelligence and performance dashboards are far more than dumb reporting tools. Sales compensation dashboards have huge potential to drive better sales performance through personalized “next-best-action” nudges and real-time commission reporting.
Clear and reliable dashboarding is the key to communicating the sales comp plan to reps, and so we take great care when designing and building them.
The following is the framework we follow to build incredibly motivating sales compensation dashboards for our customers.
Why Aim for Best-in-Class Comp Plan Communication?
Communication is one of the three pillars of sales compensation excellence, along with Design and Administration.
Poor communication of the sales compensation plan is at the root of many organizations’ sales performance issues. It is often due to a lack of resources or internal expertise, which impacts the organization’s agility and the efficacy of the comp plan.
The resource issues and manual data management involved the sales comp administration often result in delays and lagging reports, leaving reps with no choice but to start “shadow accounting” their payouts.
Shadow accounting is one of the most ignored hidden costs of sales compensation. Sales reps often spend between 4 to 16 hours a month working out their commission in spreadsheets. It’s a sign of eroding trust, leading to lower sales rep engagement and motivation and lost sales potential.
Excess ad-hoc troubleshooting or exemption requests and inefficient dispute resolution processes lead to demotivation, errors, and missed sales opportunities.
Without a proper understanding of how to make money from their compensation plan, reps are not positioned to sell effectively. Reps want to sell and make money, but poor communication leads to poor sales comp plan adoption due to a lack of understanding.
Reliable, real-time, helpful dashboards are the key to solving the Communication problem.
Three Principles for Best-in-Class Sales Compensation Dashboards
While many dashboard projects start well, they almost always end up broken, error-filled, or require too much work to keep updated.
Delayed or incorrect data results in reps losing trust in the dashboards, and it becomes a waste of resources to keep them updated. One of the biggest causes of sales commission disputes is confusing or incorrect dashboard data.
Key to a sales compensation dashboard that motivates your sales team is visibility and clarity.
Providing visibility reduces conflict and other problems that stem from lack of information or poor communication about the sales compensation plan. Full Visibility means:
Transparency means a full understanding how the plan mechanics work.
Sales reps need a full line of sight into all the performance details and variables that drive their pay. They need to know how all the deals they sell contribute to their overall compensation.
Give all stakeholders full visibility into the plan structure. That means commission dashboards with drill-down capabilities so that reps can dig into each component or deal and see how much they earned and why. It also means giving them feedback on all drivers of individual performance and measurement, not just some of them.Sales reps need a full line of sight into all the performance variables that drive their pay. They must know how all the deals they sell contribute to their compensation, or they cannot make the best use of the plan — and sales will suffer.… Click To Tweet
The closer you can tie an incentive to the behavior, the more powerful the reward mechanism is — and so more effective at driving future behavior. If a rep closes a deal and sees that reflected in their pay immediately after, the link between that behavior and the reward will be much stronger. The incentive to do it again will also be stronger.
Offer as much detail as possible in real-time. Display real-time payout tracking in sales rep dashboards with live updates on individual payout performance to drive motivation and encourage strategically aligned behavior.
Best-in-class sales compensation dashboards have flexible reporting and can automate and streamline ad-hoc reporting requests from stakeholders. Custom report changes and new dashboards must be dynamic enough to show performance in a SPIF or highlight a new sales kicker.
Adapting dashboards intelligently also requires robust analytical abilities. Every sales rep and organization is unique, and dashboard usage data can show you which payout performance metrics and information displays drive better sales performance.Most SPIFs underperform because reps either don't understand them, can't figure out how much more it's worth, or forget about them completely. Your sales comp plan is only as strong as your ability to communicate it to reps. #salescomp… Click To Tweet
Most organizations have dashboards that merely report the current (or latest available) status of several metrics with varying levels of detail.
Clarity on the real-time earning status and opportunity pipeline is critical. But there’s an opportunity to turn your reps’ dashboards into a real-time training tool that can increase revenue and employee engagement.
With the right dashboards, you can stop wasting money incentivizing the wrong thing and tell reps directly what to go after to increase their earnings.
Most SPIFs are calculated and administered outside of the core sales compensation software because it’s not agile enough to make quick changes mid-year.
That causes many SPIFs to underperform because reps either don’t understand them, can’t figure out how much more it’s worth, or forget about them completely.
Best-in-class sales comp dashboards should give reps a clear picture of their quota attainment and earnings, including short-term promotions and SPIFs.
With unified sales comp dashboards (like Forma.ai’s), you can forecast, calculate new SPIFs and then push a new display to rep’s dashboards to highlight it within days.
One important element of helping your reps understand how to take advantage of the sales compensation plan is showing how it works in practice. But sales managers can’t constantly motivate and direct reps to the best deals.
Forma.ai dashboards do this with a feature we call ‘Go-Get Cards.’
These sit at the top of the dashboard and are continually updated with personalized suggestions on:
- which deals to go after to reach the next tranche
- which SPIFs, Accelerators, or Kickers to take advantage of to increase their commission
- a live estimate of their variable compensation payout
That clarity radically increases the effectiveness of each rep because they’re not spending time figuring out what to do next or calculating their commission in spreadsheets. They instantly know the deals they need to prioritize to reach quota and can see much they will be paid from them without calculating it themselves.
“I don’t have to worry about motivating the sales team or telling them what to go after every day because they can just log in to Forma and see it.”Ryan Hagedorn, COO – Edmentum
Sales compensation dashboards should be evolving, collaborative tools. That means highly accessible channels to submit support and troubleshooting requests and a support team equipped to provide high-quality responses.
Getting reps to engage with their dashboards is such an important part of what we do that we integrate a feedback channel within Forma.ai’s platform. That allows reps to ask questions about why things are displayed the way they are or request new insights on their dashboards.
We also regularly talk to our customers’ reps to get their feedback on what’s working and figure out what is most motivating for them. That helps us learn whether they’re more motivated by bonuses or higher commissions or how their experience with the last SPIF etc.Sales compensation dashboards should be living, evolving, collaborative tools. Not the rigid, clunky readouts you see in most ICM tools. #salescomp #icm #dashboards Click To Tweet
Building a Winning Sales Compensation Dashboard
Bonus structures and SPIFs are often too complicated for traditional ICM software to visualize effectively. The dashboards so simple that they limit what the organization can do with their sales incentive plan design. Think about that for the moment: The comp plan’s effectiveness and the organization’s agility are restricted by what they can show through the dashboards.
That doesn’t make sense: The design of your sales compensation plans shouldn’t be limited by your incentive compensation software — or any other software.
Part of the issue is that most companies have limited experience in what makes an effective sales compensation dashboard. They get support implementing the software through a third-party vendor but often find they cannot adjust the dashboards later to show new or refined data.
The organization doesn’t get the most out of its dashboards or reports because they must be created manually or by a third party. Eventually, the dashboards and data fall into disrepair and misalignment, and people fall back to manually reporting in spreadsheets, further limiting the plan.
Unless the organization invests updating the tools regularly, they eventually fall out of sync with the needs of the org, and they are forced to do an expensive overhaul or switch vendors anyway.
To provide the most visibility and value, sales compensation dashboards must be constantly updated and tweaked to reflect the changing comp plans and business objectives. You must also be able to customize them to show different stakeholders the information they need to make decisions that move the business towards its goals.
Customers are often surprised at the level of customization that we can build, but that is only possible because we are obsessed with ensuring that Forma.ai becomes the source of truth for your sales performance data.
Everything else depends on the accuracy of your data, a real understanding of what behavior you want to incentivize, and the outcomes you expect from that behavior.