SOX News

80% of Respondents View Sales Compensation as a Strategic Sales Performance Management Function: Survey

(OCt 23, 2007)-- Centive, released the results of an online, "blind" survey recently completed by over 100 US mid-market sales and finance executives. The survey reveals that while 80% of the executives view sales compensation management as a "strategic" function, fewer than 25% claim their current sales compensation system provides measurable strategic value.

The survey results validate previous analyses by industry analysts and thought leaders which indicate that for many companies, a significant gap exists between expectation and reality with respect to sales compensation programs and their effect on sales performance.Centive attributes this gap to a longstanding industry-wide reliance upon home-grown spreadsheet-based commission calculation systems. In fact, 92% of the survey respondents indicated they currently use in-house spreadsheet-based sales compensation systems, and within that group, 68% indicated their level of satisfaction at a "1" or "2" on a 5-point scale (5 being very satisfied).

Additional data points from the survey include the following:
-- 77% claim their current system provides no access to performance data until after the close of a period
-- 62% claim their current system does not easily support plan modeling or commission expense forecasting
-- 54% claim that commission disputes result in lost sales focus
-- 42% claim their current system does not support Sarbanes-Oxley compliance

With respect to evaluating a new solution:
-- 86% view ease-of-use as the most important attribute -- 78% view reporting and analytics as an essential feature-- 72% view real-time visibility as a critical element for driving salesperformance

"The results of this survey validate what we see time and time again, particularly in small and mid-market companies," said David J. Fritz, president, Growth Solutions, a management consulting firm specializing in
sales performance optimization. "Ultimately, sales compensation is one of the best means of communicating to the sales force what is important to accomplish; be it revenue growth, new customer acquisition, customer
loyalty, the placement of strategic products, etc."

Share or bookmarklet this web page at: