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The Cost of Doing Nothing: How to Minimize Operational Expense

Driving sales force behavior requires embedding a good compensation plan in your business strategy. If your sales force is to be motivated to strike better deals faster and more efficiently, a clear understanding of the comp plan is imperative. As a bonus, a big chunk of your operational expense will be slashed.

The Cost of Doing Nothing: How to Minimize Operational Expense

Optymyze looked at 100 companies across different industries to see how large sales forces cope with the most common sales compensation problems that break the link between strategy and execution. First on the list of culprits: the cost of operational expense.

To spend or not to spend? That is the question

Sales operations managers and analysts, HR managers, compensation analysts, finance analysts are all synonymous with “hefty paycheck.” This necessary evil, so to speak, chips away at a company’s profitability. According to Dave Kahle, a prominent author and speaker in the sales realm, the ideal ratio of sales managers / compensation managers to sales reps is subject to many variables. However, he suggests a ratio of 1 sales manager for every 15 to 20 salespeople.

OrgsExpandMany organizations shift compensation responsibilities by employing highly-paid HR professionals with skills in performance management and organizational development, or expensive finance analysts, to help them tackle sales compensation problems.

Sales compensation typically involves a lot of the aforementioned roles, but focusing so many administrative resources on performance management is not only expensive, it also overburdens staff, leading to frustration, missed opportunities and high turnover. So, how do we avoid this?

Buy outcomes, not assets

Hiring the best professionals in HR or finance departments is not always enough to guarantee a comprehensive compensation plan, let alone one that is aligned to the company’s strategic goals. Aiming to achieve a state of equilibrium is (more often than not) a cumbersome affair, due to the many processes involved:

  • Understanding sales trends and aligning them to strategic (company) goals
  • Aligning sales trends to sales compensation results
  • Aligning sales compensation plans to drive the right sales behaviors
  • Understanding sales behaviors
  • Running plan efficiency analysis
  • System maintenance
  • Payment processing
  • Correcting inaccurate payments
  • Handling inquiries and disputes

Sales compensation is not just about the future, but also about the past and the present. Optymyze built its solutions around key concepts of sustainability and scalability with all these hurdles in mind, helping clients balance requirements and costs.

Having a unified platform that allows you to manage the data for all of the above – anytime, anywhere, complete with analytics – is a massive uptick that can help you align your organizational goals with your sales performance and compensation.

Gartner(quote)By combining market leading technology with services that are specifically designed to leverage it, we take sales performance management to the next level, providing customers with time- and money-saving gains.

This agile approach means that whenever you decide to kick off your expansion plans, there’s no need to rethink your approach or to rake in more analysts. It just gets done while you focus on selling. That’s why best-in-class leaders buy outcomes, not assets – to minimize operational expense and get the most bang for their buck.

Planning for growth is one of the most difficult tasks a leader will face. In the words of Ben Franklin, “By failing to prepare you are preparing to fail.

Visit our website for a glimpse of how you can expand your sales force, increase your market-share, and gain an unprecedented advantage over your competition, all without increasing your operational expense.

This article is part of a planned series. Stay tuned for more on The Cost of Doing Nothing.

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