Ready to boost your sales team’s productivity and select an SPM vendor? Automating your sales commission program is a great way to modernize your sales force, reduce administrative overhead, avoid calculation errors, and streamline operations. At the same time, choosing the wrong SPM solution can cost you thousands and cripple your entire sales operations for months. Here are a few things to consider when selecting an SPM vendor.

Is It Cloud-Based?

This one is quite obvious but we’ll mention it anyways. Many SPM vendors have already made the transition from on-premise to cloud-based solutions. This said, you’ll still find some laggards, which you’ll want to avoid. It’s never been easier to deliver cloud-based applications – including single-sign-on and data synchronization capabilities. In 2019, there is no excuse for not being cloud-based. On-premise SPM solutions just have too many disadvantages as compared to cloud solutions:

  • They often require expensive hardware
  • They must be updated / maintained manually
  • They typically don’t scale well

Do They Take Data Security Seriously?

Your SPM system will host some of your organization’s most sensitive data – sales transactions, commission statements, product margins, reporting hierarchies, etc. As a starting point, google the vendor’s name along with the following words: “security breach”. Also check if they have an online statement regarding data security (click here for an example). Data security is too important to ignore when selecting an SPM vendor and for this reason, we’ve listed it as #2.

Can You Even Sign Up?

If they don’t let you sign up and create an account, it probably means they have something to hide. It could be that they already know you won’t be able to use their solution without some extensive training. It could also be that their provisioning process is manual (a bad sign). Or it could be that they expect you to pay some type of setup fee for the privilege. Regardless, in today’s day and age, not providing instant access (or a free trial) is not something businesses like. On the flip side, many vendors let you sign up and access their application instantly – no need to “beg” for an account.

Is It Easy to Learn?

If you need a consultant to start configuring, either you have a very complex scenario in mind, or there is likely a problem with the solution itself. While some sales commission plans are very complicated, many others follow well-known recipes. This is especially true for small to mid-sized companies. For example, if your large organization requires complex crediting rules based on sliding time windows, then it might be unavoidable to hire a consultant. Otherwise, you should be able to configure incentive plans yourself without any help – or there is an issue with the solution. Some online vendors make configuration easier by including in-product tours, or by configuring automation for you in your account – free of charge.

What’s The Pricing Model?

In today’s day and age, customers expect transparent pricing. Not having a public price is a clear declaration of intent: “we want to extract the highest possible payment from you“. Opaque pricing requires your team to negotiate pricing for weeks before you’ll even be able to confirm you can afford their solution. Also, check whether the vendor requires a setup fee, or is trying to lock you in for an extended period of time. Finally, check the licensing model. For example, is it more expensive to license an admin versus a payee? The best SPM vendors focus on simplicity: instant user access, public pricing, no setup fee, no long-term commitment, and simple user licensing.

Does It Fit Your Business?

If you are a small to mid-size business, you may not have the bandwidth (or budget) to negotiate pricing with multiple SPM vendors, hire a consulting / deployment firm, and spend weeks deploying the solution. You probably need a solution you can evaluate and deploy in a matter of days – one which provides a quick return on investment. Any company with 5-25 payees should probably run away from large enterprise SPM vendors because they will always require costly consulting engagements to be deployed and customized. In addition, any configuration change will likely require another round-trip to a consulting partner, resulting in additional costs and delays. In short, choose a solution which fits your business size.

Does It Address The Entire Commission Lifecycle?

Sales commissions have many moving parts: participant enrollment, transaction crediting, incentive plan design, spend reporting, participant dashboards, dispute management, etc. Make sure your SPM vendor includes as many of those as possible (not just plan design and commission calculations). The amount of time you’ll save in administrative overhead is not just based on running calculations faster or more reliably, but on how all aspects of sales commission management come together. A well-integrated SPM solution covering all these aspects, will save you considerable time and money. Here is sample list of features to look for.

Is It Flexible Enough?

The complexity required by sales commission plans can range from trivial to extremely complex. Often, there is no good reason for this complexity to exist. Complexity you don’t need makes it difficult for sales managers to explain plans, and for sales representatives to understand them. At the same time, your incentive plans should be 100% aligned with business goals. If a lack of flexibility forces you to compromise on alignment between sales goals and plan design, then you probably need a different SPM solution. Make sure to consider different scenarios you might use in the future, and try to model those as part of your SPM evaluation process.

How New Is The Architecture?

Does the SPM solution you are considering use stone-age technologies? Was the technology built 10 years ago, or is it more recent? Or does it run on a modern platform such as Microsoft Azure or Amazon Web Services? Running on a modern cloud platform provides many advantages:

  • Data security – modern cloud platforms implement strict physical security, as well as intelligent intrusion detection and anomaly detection.
  • Redundancy – modern cloud platforms implement multiple levels of redundancy which limit the risk of a lasting outage or data loss.
  • Scalability – modern cloud platforms make it easier to expand compute capacity on demand, in a fully elastic manner.

Does It Have An API?

An SPM solution without an API is like a black box. Not being able to access the data means you are limited to “their” reporting, and how they present information on “their” web pages. It also means you’re probably not going to be able to integrate with other solutions. Make sure the SPM solution you are considering has an API and a good reporting story (for example, the ability to access the data via Microsoft Power BI or Tableau). Finally, make sure the SPM solution you are considering has some built-in ability to pull data from CRM, accounting, or sales systems. Built-in integration is likely to save you a lot of time and money. Finally, study their integration story in depth. Some vendors make integration a lot easier than others