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Boost Your Bottom Line with Effective Sales Compensation: Increase Sales Power

Sales compensation motivates sales representatives to achieve their targets and contributes to the company's bottom line.

You can use sales compensation capabilities to incentivize sales reps to prioritize profitable deals as well as negotiate better terms. For example, a commission structure that rewards sales reps for closing deals with higher profit margins would encourage them to prioritize these deals over those with floor prices.

Another advantage of the Sales Compensation capability is that it allows sales reps to see their compensation plan for a given deal in real time. In this way, they can identify opportunities for cross selling as well as upgrade to more profitable products.

By using sales compensation capabilities, you can drive better outcomes in quoting and negotiation guidance and this can help to prioritize profitable deals, provide guidance on quoting and negotiation, mitigate risks, and ultimately contribute to the company's bottom line.

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Sales Compensation Integration with Negotiation Guidance and Quoting

When purchased together, these capabilities will help your pricing game soar. The way this works is that in the Quoting capability, sales reps see the Negotiation Guidance provided by Pricefx’s Optimization capability. If they choose the stretch price, their compensation will increase accordingly, leading to an increase in the deal size. ​

Moreover, in Quoting, sales reps can choose recommended products provided by Pricefx’s Optimization capability. When adding new products to the deal, their compensation will increase accordingly, motivating sellers to push more of the product portfolio to the customer. 

To make it even more relevant to your business’ particular needs, together with Clustering (our customer and product segmentation accelerator), all these recommendations and profit increase potential will be targeted and relevant to your individual client portfolio. This means that your sellers will know exactly which customer and for which particular product(s) they will get compensated, and how much, based on the quality of the deal they close.

Advantages of Sales Compensation

The Sales Compensation Accelerator provides a solution for fast implementation of the company's sales compensation plan ensuring maximum visibility and transparency. The accelerator package includes:

Common compensation types

Approval workflow for compensation agreements, agreement records and payout values

Output templates for documents like Sales Compensation Agreement, configuration overview and progress reports

Dashboards with information about progress towards the plan

Dedicated views for compensation agreements and agreement records

Sales Compensation Benefits

Sales compensations is a Pricefx capability that allows you to design comprehensive compensation plans for your sales team to drive performance and profitability and an effective compensation plan can inspire your salespeople to sale more and achieve their goals. With the help of AI and the availability of data, you can now leverage sales compensation capabilities to drive better outcomes in quoting and negotiation guidance.

When sales reps can see their commission range in line with the order and the company targets, they can have confidence in their deal’s price. They can also apply various level for a quote and immediately see the impact it would have on their commissions.

In dashboards, the records can be easily tracked by anyone involved in a deal. They can be filtered by seller or date which makes it easy to analyse their result.

Common Business Scenarios

With Sales Compensation you can

• Implement compensation plans

• Handle adjustments and enquiries

• Push payments to your payroll

• Keep track of compensation plans

• Align company objectives with sales targets

• Improve time management:

You can save a lot of time implementing compensation plans by creating and saving your own or choosing from pre-defined schemas. Moreover, you get access to dashboards with views for sales leaders, administrators, and agents.

• Improve error control:

You can benefit from the error-free calculations. This will lead to fewer disputes or inquiries from the sales team and better compliance.  It will also allow you to lower the chance of overpayments per annum.

• Ensure full visibility:

You can ensure full visibility into the compensation level at the time of quote, leading to higher quota attainment and improved company results.

Make Sales Compensation Plans More Effective

The idea behind this is to connect the dots between marketing, sales, finance and pricing to drive profitability and performance and get better results while aligning with company targets.

In many businesses the 4 teams we mentioned above are usually working asynchronously and are rarely aware of what the others’ targets are. This is a good case scenario, but at times these departments can be at odds with each other which is detrimental to the company targets and the business overall.

The Sales Compensation plan allows all of these key players to come together for the company benefit by giving all the parties access to aggregated data essential for sales leads, pricing analysts or marketers.

Another way to make this more efficient is by ensuring the sales reps have the flexibility to make changes to the program based on the market conditions. In addition to flexibility, you must ensure that your sellers have visibility of the plan. While many companies cannot even provide an estimate of the commission at the price-point they are negotiating at a given time, with Sales Compensation, you can provide this data in real time and transparently.

Finally, Sales Compensation allows for a single source of truth, particularly with disputes or enquiries. While these are usually handled outside a given system, either via email, phone-calls or in person, it is a good idea to have them documented in one place. In Sales Compensations, you can keep track of all compensation records.

Sales Compensation Workflow

The workflow in the compensation plan is based on a standardized approach that still allows maximum flexibility to tailor it to your company’s needs.

Just follow the steps below and adjust where applicable to best meet your goals.

Create plan Select Schema Define Schema Calculate Results Manage Disputes Submit Approval Payout Sales Analyze Results.