The Seven Deadly Sins of Incentive Compensation

Michael DeLeonardisVICE PRESIDENT – INSIGHTS & BENCHMARKING, XACTLY CORP

WHAT IS XACTLY INSIGHTS

Who is making their numbers?

What is great performance?

Where are the bright spots?

How should you measure?

EXPERT SERVICES AND DATA FOCUSED ON WHAT BEST IN CLASS INCENTIVES LOOK LIKE?

VALUEVALUEDATADATA

COST &COMPLEXITY

COST &COMPLEXITY

COST &COMPLEXITY

COST &COMPLEXITY

TERABYTES

HUNDREDS ofTHOUSANDS

Subscribers

$BILLIONSPayments

BILLIONSCredits

The Seven Deadly SinsOF INCENTIVE COMPENSATION

The Seven Deadly Sins

1. Poor Alignment with Business Objectives

2. Lack of Traceability to Sales Behavior

3. Inability to Measure Success

4. Excessive Plan Components

5. Sharing the Wealth

6. Demotivating Measures

7. Eroding Profitability with Accelerators

The Seven Deadly Sins – 1-Alignment

$100k

$150k

$200k

$125kMonth 2Quota

Month 4Quota

Month 5Quota

Month 3Quota

$75k

Month 1Quota

Poor Alignment with Business Objectives

The Seven Deadly Sins – 2-Traceability

HCM ERP CPQ CRM

INCENTIVE COMPENSATION BIG DATA PLATFORM

The Seven Deadly Sins – 3-Measure Success

11

1 2 3 4 56 7

PERF

ORM

ANCE

The Seven Deadly Sins – 4-Plan Components

1 DEAL

75%

5 30 161

The Seven Deadly Sins – 5-Sharing the Wealth

Name variable compensation concepts that drive attainment

1

2

3

4

Pay Mix

Quota Timing

Commission Based Plans

Commission Rates

Holds & Releases

Capping

Bonus Based Plans

The Seven Deadly Sins – 6-Demotivating

The Seven Deadly Sins – 7-Accelerators

BUSINESS IMPACT WITH BIG DATA

+10%REVENUE

+30%SALES

PRODUCTIVITY

+40%MARGINS

$3MIN SAVINGS

INSIGHTS & BENCHMARK EXAMPLES

• Executive• Quota Setting• Quota Distribution• Sales Team Mix• Production by Product, Region,

Rep

• Finance• Sales Comp Profitability

(Spend/Revenue)• Spend by Plan• Spend by Role

• Sales Ops• Payout Curve Benchmarking• # of Components per Plan• Component Type by Role• Payment Triggers• Credits by Deal• Avg Commission Rates

• IT• Data Quality• System Usage Distribution• Processing Distributions

Insights Assessment - http://bit.ly/spinsights

QUESTIONS

225 W. Santa Clara St., Suite 1200San Jose, CA 95113T (720) 484-1829

www.xactlycorp.com

Michael DeLeonardis

mdeleonardis@xactlycorp.com

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@XactlyCorp

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