Sales Performance Management Best Practices Blog

Cherry picking sales compensation nuggets from recent Insurance Industry study

Posted by Jerry Hegarty on Thu, Sep 17, 2015 @ 17:09 PM

Celent recently conducted a survey involving 11 major insurance carries managing thousands of sales reps/agents/producers seeking to understand the state of automation for processes such as distribution management and sales commissions & incentive compensation. This type of research is valuable to sales business leaders in all industries as the dynamics and insights we can glean for the experiences of those who compete tooth & nail for every dollar in this mature industry provide lessons for all.

After reviewing the results of this survey I tried to distill everything down to a few insightful ‘nuggets’ tovshare.

  • One very surprising nugget pulled from the survey is the fact that executives at these companies though that it is more important that their sales compensation be accurate than to be effective. Said another way, it is more important to calculate commissions and incentive compensation in a timely and accurate manner than to have plan designs which are completely optimized to driving desired behaviors.
    • Take away lesson; focus on putting in place the infrastructure you need to scale your process and ensure the timeliness and accuracy of your process then once this is established, turn your focus to fine-tuning your sales compensation incentive plans.
  • In a mature industry like insurance, approximately 70% of the carriers surveyed still rely on spreadsheets & custom build ‘homegrown’ (read: inflexible) software as the backbone of the commissions system. The author speculates that this technology situation is driving the views on the importance of calculations accuracy. As discussed her many times before, spreadsheets have an inherent 3-7% error rate simply due to human error that manual systems often exacerbate.
    • Take away lesson; delays in migrating from spreadsheets and homegrown solutions to sales compensation solution (like NetCommissions ) will only prolong the pain of a slow and inaccurate process.
  • A significant hurdle for 40% of the survey respondents is fragmented data and disparate technologies used to administer and assimilate this data. This results in inefficiencies as administrators have to put in place imperfect manual work arounds to patch these systems together as best they can.

Does any of this sound familiar? If so, not to worry, you’re not alone and others in a significant industry like financial services are struggling with many of the same challenges we’ve heard across industries.

How to meet these challenges?

  • The use of sales compensation software (such as NetCommissions) seems to be correlated with fewer problems in managing the sales compensation process.

 Top 10 signs CTA c

Reference: Source: Celent, Strategic Issues in Distribution Management Survey April 2015

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Topics: plan design, Sales Compensation Professional, CEO, Sales Operations, Accuracy, Timeliness

Top 10 Signs your Sales Incentive Compensation system is broken !

Posted by Jerry Hegarty on Mon, Nov 28, 2011 @ 19:11 PM

Over 75% of businesses today rely on an array of homegrown solutions such as spreadsheets, desktop databases and IT developed solutions to automate the process of calculating and reporting on sales compensation. These companies are in the majority and quite often hit many of the same issues over time as the folks that call NetCommissions. We’ve put together a checklist of the top 10 warning signs that you may be outgrowing your sales comp process.  Here are a couple of those top ten;

You have serious concerns about the accuracy and timeliness of your commission checks.

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Topics: EVP/Sales Leader, Communication/Reporting, CFO/Finance Leader, CEO, Human Resources, Accuracy, Timeliness