Incentive Compensation

5 Things to Consider Before Purchasing a Commissions Automation Software

Adithya Krishnaswamy
min read
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Buying a new phone. Some people love going through the entire process of the purchase. 

However, for some, it’s not so much of a thrill.  This is how it goes:

  • You browse through thousands of phone specs. 
  • You become hopelessly infatuated with one brand or one shopping website coupon and place ALL importance over it. 
  • Then, you read reviews by ten thousand odd people and scream at your indecisiveness.
  • After your mini-breakdown, you evaluate the products yourself and narrow it down to the final three.
  • You then compare them and pick the one that exactly matches your requirements. 

It might be simple to say, ‘Bah! It’s just a phone. Make a choice already.’. But, you are going to be stuck with this device for a very long time (probably spend more time with it than you do with actual, human people). 

Purchasing software is a lot like this. Even after all that pre-buy research, gathering feedback and making an informed purchase decision, your post sale experience can be miles apart from your expectations. 

There’s one massive difference between buying software and phones. If you’re not pleased with your phone’s performance, you could easily ditch it for another as you are the only user. With software, however, the repercussions are heavy. Like annual contracts, these things are expensive to change frequently. So, it’s better to take the evaluation process seriously.

Handling sales commissions is a task on its own. Now, club it with a bad, incompatible software and it’s hello, incompetence from hell! The trick to picking the right sales compensation vendor for your business is to evaluate how closely the vendor’s capabilities align with the key requirements of your sales compensation structures. 

This guide will help you with the evaluation process once you have shortlisted a few products. I’ve split each section into two parts:

  • Bare minimum: This is non-negotiable. You NEED these in your compensation software. 
  • Good to have: You can do without but wouldn’t hurt if you did have them. 

Integrations and Data Mapping

Bare minimum

  • CRM Integration: Your commissions automation software has to integrate with your CRM very tightly. 
  • Custom Data Mapping and Transformation: Your tool must have the ability to create custom data mapping structure to provide flexibility in inputing data. Most times, the data from CRM needs to first be transformed before you can payout and hence this functionality is extremely critical to have a flexible system.

Good to have

  • Payment Tool Integration: The processed commission output should either integrate directly with your payment systems or allow an export to quickly upload into the payment systems. 

Dashboards and Reporting

Bare minimum

  • Payee Dashboards: Payees should have access to their commission data, status, quota assigned, ramp data, and attainment information in real-time.  
  • Commissions Statement: Payees should be able to look at their detailed commission report with payouts at the deal level and also plan level (base or spiff). They should also be able to export the data.
  • Manager Level Views: Managers should have the flexibility to look at their reportee level performance by team, plan, quota, to name a few.

Good to have

  • Commission Plan Information: Reps should have access to view commission plan details and calculation methodology to better understand their incentives.
  • Notifications: Periodic proactive notifications could be sent to payees on their ongoing performance. 
  • Forecasting: It’s a huge motivation boost for reps when they visualize the commissions they could get paid if they were to close opportunities in their pipeline.

Quota Planning and Administration

Bare minimum

  • Quota Management: Setting up quota within the tool, assigning custom ramp structures to each role as well as having rollups of quota to managers is a must-have. 
  • Flexibility in Setting Quotas: While setting up quotas, your tool must be flexible enough to accommodate the most complex of compensation plans as per quota duration, schedule duration, and payout duration.

Good to have

  • Multiple Quotas: Today’s comp plans are not simple and will definitely have multiple criteria. Hence, you should be able to set up multiple quotas for each payee. 
  • Flexibility in Player-Coach Quota:  Each manager should be able to set quotes for reps individually and for the entire team.

Commission Plan Designing and Administration

Bare minimum

  • Autonomy: The software must be such that you are able to create and manage your own commission plans easily without vendor assistance. 
  • Multiple Plans: It must be easy to create multiple commission plans (one core plan and multiple spiff plans) for every payee is an absolute must as it is crucial 
  • Powerful Overrides: You must be able to make adjustments to input data (eg. split deals, clawbacks, double comp, etc.) overriding automated commission calculations.

Good to have

  • Commissions Support Help desk: In case of issues, payees can raise queries on the help desk and admins can keep track of queries raised with context on a ticketing system.
  • Simulation: There must be room to back-test and simulate payouts for drafted commission plans prior to publishing them can help refine your plans for higher efficiency.

Admin Functionalities

Bare minimum

  • Privacy controls like GDPR/CCPA
  • SOC2
  • Audit logs
  • Role-based access control with separate roles for Finance, Operations, Managers, Payees, and Super Admins

Good to have

  • Team management and ability to set up reporting hierarchy relationships within the platform
  • Multi-channel (email, phone, slack) support

Final Thoughts

Sales commissions are too crucial a thing to take lightly but at the same time, it’s not wise to spend hours and hours of your time processing them. The smart thing for you to do is automate. 

And, considering how important sales commissions are to drive performance of your customer-facing teams, you can’t just settle with any software you search online. 

Take your time to understand what your sales compensation plans demand from a software and scrutinize every tool you consider to make sure features align with your requirements. If you want to go all in and compare the hell out of potential vendors, we have the ultimate sales compensation vendor evaluation scorecard → here.

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