Plan for sales commissions as a simple driver

Description

Thie requires commissions to be calculated as a simple percentage of sales, or an expected amount per sales rep based on their compensation plan. This differs from something more complex in that it does not require a full compensation plan and territory plan build up to derive the sales numbers.

Example Use Case

Scenario: A large organization uses CPM software to manage their sales commissions. The nature of their compensation structure and continuous changes in sales quotas and targets makes managing and forecasting commissions a complex process.

Solution: Implementing planning for sales commissions as a simple driver within their CPM software, the organization can automate the commission calculations based on various sales scenarios. This allows a simple calculation such as “Sales Commission Rate * Quota * 80% attainment”. This simplifies the calculation and maintenance as sales compensation plans inevitably change every year.

Considerations

This requirement will satisfy most mid-market and SMB commission planning needs. This is due to the constantly changing nature of compensation plans, especially in the tech industry where they seem to change each year, or even mid-year.

We generally recommend against planning commissions at a very deep level of detail in the workforce model. This is due to the fact that a built out model one year can shift the next year, creating more work to re-build and arguably defeating the purpose of moving out of Excel.

If you are looking for a deep dive commission planning tool, that is often handled in its own instance. Some products have enough room for both, but it is not the rule.

Questions to Ask a Vendor

• Commission Formulas: Can we create simple commission calculations and assign them to salespeople in the workforce model?
• Commissions and Attainment: Can we import sales performance from a CRM and apply that to a salesperson in the CPM tool each month as new sales occur?
• Adding Salespeople: When we add salespeople, can we assign a quota to them in the workforce model?
• Calculation Support: What other types of calculations can we do that are not related to quotas to derive a commission expense?