Sales Incentive Management
Why Have Sales Incentives? High-performance sales team know the answer to this and generally, any organization trying to achieve goals knows incentives work to motivate our teams and create a competitive environment. Incentive plans are important for several reasons:
- Acknowledgment of Milestones and Achievements
- Exceeding sales goals
- Fostering teamwork
- Improving employee retention
- Motivating sales staff
- Rewarding employees
- Rewarding extraordinary Service and Top performers
However, incentives can be particularly hard to track if the item you are incentivizing against keeps changing.
This is particularly important for Subscription and Cloud-based sales!
Most Microsoft partners do not have sales compensation and commission tracking systems. These are expensive systems and require a significant time and effort to implement. The general sense is that Sales Incentive management systems are good for much larger sales teams.
Because of these perceived costs and complexities, most Sales organizations just don’t have Sales incentive for Cloud-based Sales -even though this is where the growth is. And in the rare case where the Sales plans are setup, the process is All manual and takes up a LOT of time!
The commission and sales incentive tracking process is usually a manual task consisting of spreadsheets and calculations. And the sales teams have no idea what their payout is until the accounting team concludes the calculations at the end of a period and confirms the payout.
Sales Incentives Implementation Challenges
This process creates an ineffective incentive implementation that does little to motivate the sales team. The typical challenges that we see with traditional incentives implementation:
- Having different incentive plans, different types of services and keeping track of commissions
- Recurring revenue: i.e. cloud solutions
- One-time sales
- Service solutions: i.e. managed, resource and support services
- Manual calculations of incentives and types of payouts
- Payout based on cash receipts — salesperson is not paid until the customer has paid
- Payout based on the invoice — the commission is based on what is charged to the customer
- Payout based on booking — customer makes a commitment to purchase the solution
- Keeping the sales team motivated to keep selling if they don’t know how much they’re making
Work 365 is a Subscription Management and Billing Automation solution built on Dynamics 365 for Microsoft Partners in the CSP program. Work 365 helps MSPs, VARs and ISVs grow and scale their monthly recurring revenue. And add to the bottom line by providing bundling, self-service, e-commerce, payments, and incentive management
So How Does Work 365 changes the Sales Incentive game?
Work 365 calculates incentives based on the invoices that are generated against a Partner’s services within a determined period of performance through this simple three-step process:
Step 1: The Leadership defines the Incentive Plans which can be specific to a Product Class (i.e. IP, Resale or Services), for specified period, frequency and the Incentive type. The plan can specify whether the incentive is earned on the Net basis or Revenue basis.
Step 2: The Sales Person sells and Provisions a Subscription that matches the Incentive Plan
Step 3: …thats it!
The earnings and payout calculations are then fully automated just like how the Billing is automated through Work 365. The Sales team members can confirm/audit their incentives, and finance and admin teams can approve, manage, and make the payments — all within the same system. Whether the sales commissions are for Azure Sales, managing CSP Licensing Sales or Service based sales the system can calculate the incentives!
- No more manual calculations of incentives — Work 365 automatically calculates incentives based on the billing contracts and subscriptions invoices that are generated from the system
- Automatic prorated incentive calculations — Work 365 already prorates licenses on a monthly or daily basis. Now the prorated incentives tied to the prorated licenses are automatically calculated.
- Saves time spent on incentive management — Work 365 has the potential to cut time spent by 30-50% because all the information is within one system so there is no back-and-forth or validating data/calculations
Work 365 helps you scale and grow! The sales members keep track of their sales progress, commissions, and payouts. While the accounting and finance teams save time managing the sales compensation plans and ensuring that payout is accurate based on the sales data located within the system. Your sales team is the driving force behind your CSP business. Managing the sales incentives properly can help keep your sales team motivated and incentivized to keep performing and driving business growth.
Since all the source data is in the system, everyone can access the information directly from within Work 365, leaving little room for error.
Watch our webinar on how Work 365 can help your CSP business with sales incentive management.