2. Today’s Speaker
Liz Cobb, Founder & CEO Makana Solutions
• Makana is the third compensation
management company Liz founded
• Over 20 years in sales compensation
design and process automation
• Liz is a recognized industry expert, has
consulted for hundreds of companies and
speaks frequently on effective sales
compensation
3. Today’s Speaker
Teanna Spence, Compensation Director,
Makana Solutions Inc.
Teanna has 28 years' experience in
•
financial systems including 14 years in
incentive design, management,
automation, and best-practices
development for many companies in a
wide range of industries including DEC,
Cabletron, Kinkos, Aspect Computers,
and Staples.
4. About Makana Solutions
“the most innovative product I’ve seen
lately…they really understand how
people design plans and work.”
James Hollincheck Research VP
“Plan design is a key element of
effective sales compensation, which
drives sales behavior. Salesforce users
“We believe CEO Cobb's significant knowledge can take advantage of a dedicated sales
of and insight into the sales compensation comp planning solution via the
industry….will help land Makana Solutions a AppExchange with Makana Motivator.”
solid position in the expanding market.”
George Hu, CMO
Judy Hodges, Research Analyst
5. Create Great Sales Comp for 2009
Create Great Plans Planning to Payment
• See the big picture • Create Great Plans
• Access built-in best practice • Calculate payments
• Anticipate incentive costs • Share commission statements
and management reports
• Generate graphical plan
documents
6. Makana Solutions, Inc.
Brilliant plans
energize the
team to achieve
the strategy.
Makana
Motivator helps
companies
build brilliant
plans quickly.
7. Motivator Express - $19/mo
Clear, motivating
plans built on top of
a strong foundation
of strategy
Make a Brilliant Plan
8. When does your plan need to be done?
35%
30%
25%
20%
15%
10%
5%
0%
Overdue Middle of January End of January End of February End of March
9. Today you will learn…
• How to create brilliant plans and
finish in TIME!
– Review the process
– Collaborate with your planning team
– Produce clear and motivating
incentive compensation plans
– Get you ready for rollout
10. Why is Sales Planning Important?
• Effective sales incentives:
– Improve sales motivation
– Tell your team what to sell and to whom
– Reduce turnover
• What do your comp plans
communicate?
– Sales reps always ‘find the money’
– Corporate strategy must be clear
– It will drive their behavior – ideally in the way
you intended
***Mismanagement Can be Costly
11. General Thoughts
• Sales people will follow the money
• Reward at the point of persuasion
– The point at which the sales person can help
the customer make choices
– The sales person must be in control of
achieving his or her goal
12. Planning Now…
• You are busy and have:
• No visibility
• No training
• No tools
• No help
13. Establish Timeline – When is that Kickoff?
Approve
Analysis Design, model & document
& rollout
W1 W2 W3 W4 W5 W6 W7 W8
1. Analysis
2. Design
3. Documentation
4. Implementation
Traditional timeline for a $10M SW company with 10 reps
“ ”
We probably reduced the process from a 2 person, 2 month
process to a one person, two week process.
Steve Balk, VP Sales
16. Where are you in the process
outlined above?
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Analysis Cost Modeling Design Documentation Roll out
17. Analysis -- Look at Last Year’s Plans
Approve
Analysis Design, model & document
& rollout
• Did you get the results you wanted?
• Did you reward for the right metrics?
• Did the team work together as
intended?
• Did you pay for performance?
– Too much?
– Too little?
18. Assess Team Motivation
• Is your sales team pumped?
• Are you seeing unintended
consequences?
• What is your turnover?
• What is your performance distribution?
• How are they spending their time?
19. Confirm the Strategy
• Understand the overall company goals
– Key economic drivers
– Areas of growth
– New markets
– New channels
20. Design and Align – 4 Key Steps
Design, model & Approve
Analysis
document & rollout
4
3 Produce
Comp
Plans
Model
2 Costs
Define Plan
1 Elements
Identify
Job Roles
Market
Strategy
21. 4
3
Eligible Job Roles
1 2
Lead Outside Account Customer
Generation Sales Management Service
• All customer facing roles
• Measurable influence over the actions of the customer
• Willing to consider at least 15% of TTC as incentive
22. 4
2 Define Plan Key Elements
3
1
• Summary level info for
alignment and benchmarking
• Performance measures and
goals
• Payout Components & Rates
23. 4
2 Plan Summary
3
1
• Target Total Comp
– Market
– Budget
– Equity across plans
– Scope of job
– Type of sale
– Level of experience
• Leverage
– Mix of salary vs. incentive
– The higher the risk, the
greater the rewards
24. 4
2 Base to Incentive Ratio
3
1
Makana How much comp should be variable at target?
Mix Max Incentive Mix
Matrix 0%/100%
Individual
Current New
products, products,
customers markets
60/40 40/60
Control
New
Current
products,
products,
markets
customers
Team
60/40
85/15
Min Incentive Mix
Existing New
85%/15%
Products/Markets
25. 4
2 A Good Plan Must be Measurable
3
1
• No more than 3 measures!
• Do measure:
– Sales volume, margin, units sold
– Product mix, new accounts
• Don’t measure:
– Management activities
• Input to CRM system
• Sales calls/week
– The past
• What are the goals per measure?
26. 4
2 Crediting Terms Must Be Clear
3
1
Be specific about:
• What is measured
– What’s the value? Net? Margin? Gross?
• Who gets credit
– Multiple roles can erode margins
• When they are eligible
– Booking, invoice, cash receipt
• How exceptions are managed
– Person starts late, leaves early, goes on LOA
– Be careful of precedence
– What happens if there is a customer problem
27. 4
2 Identify Key Payout Components
3
1
• 3-5 at most
• Make sure focus is
clear
• No component should
be less than 20% of TIC
28. 4
2 3
Review Across Roles for Alignment
1
• Examine:
– Mix and leverage according to level of personal
influence
– Common measurements for team alignment
– Strategic alignment of measures to company goals
– Equity within company
– Competitiveness of pay
29. 3 4
Model Costs
2
1
• Know overall budget for commissions
• Start with top down using historical
attainment
• Check for full allocation of quotas
• Know incentive cost of sales
• Review direct versus overlay
• Compare to last year
– don’t surprise your top performers
30. 4
3
Produce Plan Documents
2
1
• Be clear and motivating
– Easy to see rewards
– Keep top priorities in mind
– Define exceptions precisely
31. 4
3
Produce Plan Documents
2
1
• Include T&Cs that matter:
– Eligibility, effective period, crediting rules for measures
– Transition policies
• late start, LOA, termination, etc.
– Customer changes
• Dissatisfaction
• Returns
– Ramp up of new hires
• Draws/guarantees
• Be careful of committee review – don’t
lose consistency but do include legal
32. Rollout & Implementation
Approve
Analysis Design, model & document
& rollout
• Rollout
– Be aware of history
– Explain transitional issues
• Implementation
– Make sure you have access to the accounting data
– Automate as much as possible
– Allow time to test your automation
– Explain new plans to your Administrator
33. Questions & Answers
Makana Motivator Additional Information
• Time savings
• Planning
– www.makanasolutions.com/save
– Motivator Express
• Cash Receipt Blog Post
– $19/month
– www.makanasolutions.com/Blog
• Planning to Payment • December 9th Posting
• More Best Practices
– Motivator Pro
– Sample plans
– $29/month per payee
– Sample reports
– Request an online
– Webinars
demonstration
– Surveys
– info@makanasolutions.com
– www.makanasolutions.com/resources
– (877) 881-0001
