Supercharge Sales Results by Optimizing Quotas, Territories, and Incentives
Robert Youngjohns, CEO
Paul Turner, Product Marketing
Sales: Million Dollar Producer
Safe Harbor Statement
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements including but not limited to statements concerning the potential market for our existing service offerings and future offerings. All of our forward looking statements involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.
The risks and uncertainties referred to above include - but are not limited to - risks associated with possible fluctuations in our operating results and cash flows, rate of growth and anticipated revenue run rate, errors, interruptions or delays in our service or our Web hosting, our new business model, our history of operating losses, the possibility that we will not remain profitable, breach of our security measures, the emerging market in which we operate, our relatively limited operating history, our ability to hire, retain and motivate our employees and manage our growth, competition, our ability to continue to release and gain customer acceptance of new and improved versions of our service, customer and partner acceptance of the AppExchange, successful customer deployment and utilization of our services, unanticipated changes in our effective tax rate, fluctuations in the number of shares outstanding, the price of such shares, foreign currency exchange rates and interest rates.
Further information on these and other factors that could affect our financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time. These documents are available on the SEC Filings section of the Investor Information section of our website at www.salesforce.com/investor. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
All About Callidus Software
Callidus Software, Inc. provides sales performance management (SPM) and
enterprise incentive management (EIM) software systems worldwide
• INDUSTRY: Software
• EMPLOYEES: 350+
• GEOGRAPHY: Global
• # USERS: 1.7million
• PRODUCT(S) USED BY: Sales operations, Finance, Sales team
Agenda
The need for Sales Performance Management
Business challenges
Effective quota setting
Territory optimization
Incentive management
Wrap up
Q&A
How much is your organization losingin “lost opportunity” revenue?
• How does your company manage territories, quotas, incentives and sales reporting and analysis?
• Callidus Sales Performance Management maximizes sales and incentive effectiveness
Why Callidus Sales Performance Management?
“Through 2010, on average, enterprises will miss the equivalent of at least 10 percent of total annual sales in "lost opportunity" revenue that could have been captured with improved processes for defining, assigning and managing territories, quotas, and incentives and compensation plans. 0.8 Probability”
Gartner Presentation, “Exceeding Targets with Sales Performance Management” by Michael Dunne, Sept. 11-13, 2006.
The Need for Sales Performance Management
40 Million Salespeople, $1.5 trillion in spend
Nearly zero visibility for managing the investment
What is your organization’s sales spend?
Is it getting its money’s worth for that investment?
Are your sales incentives and programs producing the desired results?
Do you know when you’ve taken the right action?
Sales Performance Management
• Optimize, Analyze• Improve, Align
• Who are my customers?• How do I allocate them to sales
territories?
• What resources do I have?• What are their capabilities?
• What targets should I set?• How do I get the targets out quickly?
• How do I set motivationalincentive plans?
• How do I change plans quickly as markets and/orproducts change?
Territory
TalentAnalyticsIncentives
Targets
Significant
10+%
5+%
9
StrategicAcceleration
• Drive revenues• Gain competitive advantage
Sales ForceEffectiveness
• Action on analytics• Quota & territory planning
ROI on spend
Three Layers of SPM Value
Incentive Compensation
• Pay fast & accurate• Handle complexity & change
Customer Results Achieved:
Visibility
Planning Execution
Sales and Incentive
Performance
CSAA can now launch a product in 3-6 months vs. 6-9 months
$5M in overpayments eliminated, and more than $15M in increased revenue(Major telecom provider)
Channel RetentionEliminated 80% of Disputes from channel of 25,000 distributors and suppliers.
CUNA Mutual has realized hard dollar savings of $900,000 per year.”
Sales Productivity> 60,000 sales days recouped over 2 years by lowering shadow accounting (Major telecom provider)
“Callidus has enabled us make sound strategic decisions as we are by identifying factors that motivate our sales team”
“We are driving a cultural transformation in our sales organization”
Loan production up 450%
“We can align incentives more closely to our channel objectives.”
Accounts Contacts
Sales Cycle Execution
Prospect Qualify Solution CloseNegotiate
Sales Enablers
Leads Content Config./Quote OrderPropose
Monitoring/Reporting/Analytics
Territory Mgmt.Accounts, Resources,Hierarchies
Quota Mgmt.Revenue &
Margin targets; New business
Sales ICMCommissions,
Bonuses,Accelerators
Sales Performance Management Defined
Sales Performance Management: Going Beyond Incentive CompensationMichael Dunne
Territory and Quota Setting
"Gut feeling" By executive dictate Budgeting Politics Not reflective of
demand
Territory Allocations
Quota Assignments
Opaque Seniority Politics "Gut feeling" Ad hoc Misaligned
Transparent Fact-based Comprehensible Achievable Reflect responsibilities Meaningful
Transparent Logically determined Balanced Equitable Reasonable opportunity Optimize coverage
Quota Setting Business Challenges
Challenge Solution
• Align sales with corporate goals • Derive and communicate top level target
• Set quotas based on business need • Top-down, Bottom-up and Bi-directional
• Utilize different business drivers• Historical Sales, Territory Potential, Growth,
Sales Effectiveness
• Manage and monitor approvals• Hierarchy Level Rules, Workflows
• Communicate Quotas and Attainments • Web or Excel enabled quota setting and
dashboards
• Minimize confusion and ambiguity • Standardized templates and guided workflows
• Integrate with revenue and comp systems
• Integrates with TrueComp and supports multiple data sources
Quota Setting Flexibility Across Multiple Measures
Allocate QuotaUsing MultipleMeasures
Customer Type (New, Existing, Strategic)
Sales Volume
Profit Margin / Price Realization
Product Mix
Multiple Quota-based with Accelerators
Key Strategic Objectives (KSOs/MBOs)
Market Share, Customer Satisfaction
Analyze Attainment, Future Opportunity
Key Takeaways
• Exception highlighting show underperformance and over performance areas
Identify seasonal trends in accounts
Plan Quotas Against Sales Goal
Key Takeaways
• Uplift or downlift quotas, or bring forward existing quotas and add weightings or seasonality to them
• Compare scenarios side by side and select the best one
• Centralized business rules easy to update, rather than locked away in multiple spreadsheets etc.
• Have multiple targets based on optimizing product mix, account performance etc..
Adjust Quotas and Add Audit Trail
Key Takeaways
• Provides immediate feedback on what-if scenarios
• Can be performed in the Web or Excel client
• Can be performed in off line mode for traveling sales manager
• Can add supporting detail for to any change to ensure a change log its kept
• Greg is able to adjust his current targets for his teams accounts, and uplift them. For example, he has uplifted Finance Bank New York by 25%, and Comp Shop Texas by 20%, given last years over attainment. He can immediately see the impact on the overall target, and how it is closing the gap against the management target25,572
324,565
12,878
Reconcile Against Sales Goals
Key Takeaways
• Identify key variances against top level goal• Re model and create new scenarios as necessary
Major realignments• Creation, expansion or reduction of sales force• New product mix, new target, new indication• New competition• Mergers, consolidations
On-going maintenance• Align to new business conditions as reflected in data
updates• New customer acquisition• Personnel situations• Territory management
“What-if” analyses• Different strategy• Plan variations
Situations that Require Territory Realignment
Efficient Territory Optimization
Key Takeaways
• Leverage any metric or attribute to create balanced territories
• Territories can be account based or area based, a combination of both; i.e.. Rep A has all the ‘red’ zip codes with the exception of one named account
• Users can view accounts, territories centers, values of areas, highways, etc… to design the most effective territories
Key Takeaways
• “What-if” modeling – Users can simultaneously view several possible solutions for comparison
Model and Balance Territories Based on Key Drivers
Users have the ability to dial-in the relative importance of territory balance, geographic compactness and level of disruption when evaluating optimized scenarios.
Brand Management
Motivating and Rewarding People
Customer ServiceTurning Customer Info into Insight
Attracting and Retaining PeopleBuilding Selling and Service Skills
Strong Value PropositionsPartner and Alliance Management
eCRMSales Planning
Key Account ManagementAdvertising
Customer Retention and AcquisitionManaging Product and Service Mix
PromotionAbility to Change the organization
New Products and Services
SegmentationBuilding Service Culture
Channel Management
Incentives Drive Financial Performance
¹ Accenture CRM Research
Potential Dollar Impact in $M on Pre-tax Profit of Moving from Average to High Performance for $1Bn Business Unit
- Accenture CRM research1.5
13.013.0
12.010.0
9.59.0
9.08.0
7.5
6.05.5
5.0
3.5
2.52.0
3.0
5.05.0
Pay for Performance from Everyday Dashboard
Detail to Reduce Shadow Accounting
Gain Summary View of Sales Performance, Incentive Opportunities
Monitor Key Metrics
Monitor Team Performance, Opportunities to Change Behavior
Leading Enterprises are Integrating SPM solutions
Insurance
Banking
Telecom
High Technology
Life Sciences
Continued Integration with salesforce.com to Drive Customer Value
“As a customer of both Callidus Software and salesforce.com, we are pleased that the two solutions are becoming more fully integrated. With this integration, our sales representatives and sales executives will be able to view strategic sales force automation and sales performance management information together .”
John Graham Executive Vice President Global Sales and Services at UGS
PLM Software, a division of Siemens Automation and Drives.
Summary: Why Callidus On-Demand SPM?
Flexible• <60 days to go live• Make changes any time
Scalable• Proven multi-tenant grid processing for scalable
performance Reliable
• 99.5+% availability exceeds industry standard SLA’s Safe
• Type II SAS 70 certified• Safe Harbor certified
Sales Performance Management Leadership
Most deployed solution• Used by over 1.7 million sales professionals globally
Unmatched breadth• Plan spend, quotas, and territories• Execute timely and cost effective incentives• Deliver clear visibility through reporting and analytics
to sales and finance Seamless access from Salesforce
• Deploy to sales organization through everyday
Salesforce application
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