5 Sales Performance Management Trends in an Era of Efficient Growth

Organizations are doubling down on efficient growth, and for good reason. According to McKinsey, emphasizing efficient growth could enable software companies to unlock $500 billion in incremental shareholder value. 

More specifically, compensation and revenue operations leaders are making the most of their resources by optimizing their incentive programs and annual sales planning processes, using them as strategic levers to drive business growth.

Here’s how.

Trend 1: Bundling Incentives with Territory and Quota Planning 

Modern RevOps leaders are unifying territory and quota and incentive planning all in one place.

Rather than piecing together disparate Excel spreadsheets, which is a time-consuming and highly error-prone process, teams are using a modern SPM solution to aggregate data and make more informed planning decisions.

By centralizing critical data, compensation professionals can work faster, maximize territory planning effectiveness, and ensure that territories and quotas are aligned with payee incentives.  

Revenue leaders like Adam Edminston, Associate Director of Revenue Operations and Strategy at Bloomreach, are quickly adopting this trend.

Trend 2: Expanding Incentives Beyond Sales

Traditionally, incentive programs were only used for sales teams, but that’s no longer the case. Many modern companies are using commission plans across the organization to drive growth. 

[BLOCKQUOTE
| Quote: As organizations start to ask themselves what they should do to drive better outcomes and get the most return on these investments, incentives can be incredibly powerful, and they should look at expanding beyond the traditional notion that only sales should get commissions.
| Author: Katie Foote
| Title: CMO at CaptivateIQ (State of ICM Report)
]

According to the Alexander Group, 38% of organizations are changing which jobs are eligible for a sales comp plan, including more sales and sales management roles, customer success reps, sales engineers, and marketers.

CaptivateIQ’s State of ICM Report shows that almost half of respondents manage over 25 plan types, including plans for:

• Sales and business development (75%)
• Client services (31%)
• Customer success (28%)
• Executive leadership (6%)
• Marketing (6%)

And, even outside of the GTM organization, companies are creating incentive plans for other teams like product and engineering. 

As a compensation professional, you should be prepared to create more nuanced comp plans across the business. 

Trend 3: Faster and More Accurate Audits

Leading compensation and revenue teams are using automation and standardization to expedite the audit process. 

They’re using tools, including ICM platforms, to lock data, view snapshots of moments in time, and quickly assess past incentive details. 

Improving processes results in faster audits and more accurate results. 

[BLOCKQUOTE
| Quote: Audits are quicker, more accurate, and less of a hassle because many of these tools provide a lot of data locking and then snapshotting in the time, which gives you a clear perspective.
| Author: Sanchit Bhatnagar
| Title: Senior Manager of Customer Experience, CaptivateIQ
]

Trend 4: More Frequent Comp Plan Reviews

Incentive planning isn’t a set-it-and-forget-it exercise. Plans should be reviewed regularly to ensure they are aligned with business goals and changing organizational needs. 

In a time where hitting goals is more important than ever, comp teams are regularly reviewing critical plan metrics, such as:

• How efficiently is your program run?some text
  • Percentage of commissions accuracy
  • Commissions time-to-payroll
• How well does your program motivate reps?some text
  • Win rate
  • Average deal size
  • Average deal length
  • Percentage of reps hitting quota
  • Revenue growth
  • Individual attainment
  • Team-level attainment
  • Deal velocity
• What’s the ROI on your incentive compensation spend?some text
  • Compensation Cost of Sales (CCOS)
  • Customer Acquisition Cost (CAC)

And teams today are keeping up with frequent plan reviews by using AI. According to our State of ICM Report, 39% of respondents use AI to run dashboards and reports.

To keep pace with today’s market, make sure you consistently review your plans.

Trend 5: Increased Adoption of ICM & Sales Planning Tech

As compensation plans get more complex, comp professionals need a more efficient way to manage all parts of their ICM program.

Many companies are using an ICM platform or have plans to implement an ICM platform to improve the speed and accuracy of the end-to-end commissions process. 

Incentive compensation management solutions enable teams to:

• Save time by automating commissions
• Built trust with payees by providing in-depth visibility
• Make more informed business decisions with real-time insights

What trends are you seeing in the sales performance management space? Drop us a line at muliplier@captivateiq.com to let us know!