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Exposing the Myth Of Planned Obsolescence: Why the Sales Compensation Plan Must Change

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Callidus Software
Callidus Software

presented at TrueConnection: Sales Performance Management Conference 2007 by Mark Davis, Managing Principal of Valitus Group, Inc.

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TrueConnection Sales Performance Management Conference 2007 November 13, 2007 The Myth of Planned Obsolescence Why the Sales Compensation Plan Must Change
Today’s objectives ,[object Object],[object Object],[object Object],[object Object]
When it comes to sales compensation plan change, the voices heard from the field… “ Why should we change the plan; we’re not losing staff?” “ We just figured out how to make money on the old plan, so they have to change it!” “ Management’s just trying to cut costs!”
… typically don’t reflect reality ,[object Object],[object Object],[object Object],[object Object],[object Object]
WorldatWork survey of sales compensation practices – reasons for change WorldatWork Survey of Key Sales Compensation Practices, October 2006
Definition of obsolescence… The American Heritage Dictionary of the English Language “… being in the process of passing out of use or usefulness…” Merriam-Webster Dictionary of Law “… a loss in the utility or value of property that results over time from intrinsic limitations or external circumstances…”
Intrinsic limitations and external circumstances… the drivers of sales compensation change ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Objectives Go-to-Market Strategy Customer Buying Preferences
Intrinsic limitations and external circumstances… the drivers of sales compensation change ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Sales Role Definition Supporting Systems Business Economics
Telecommunications company with shifting business objectives Business objectives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Change Driver Company Situation Resulting Change
Business services company changing its go-to-market strategy Go-to-market strategy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Change Driver Company Situation Resulting Change
Consumer electronics company with a change in customer buying preferences Customer buying preferences ,[object Object],[object Object],[object Object],[object Object],Change Driver Company Situation Resulting Change
Clinical skin care company with a change in sales role definition Sales role definition ,[object Object],[object Object],[object Object],[object Object],Change Driver Company Situation Resulting Change
LTL trucking company change in systems measurement capabilities Supporting systems ,[object Object],[object Object],[object Object],[object Object],[object Object],Change Driver Company Situation Resulting Change
Corrugated cardboard company with an evolving cost model Business economics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Change Driver Company Situation Resulting Change
So the plan has to change – how often is appropriate? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Lessons learned… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Questions? J. Mark Davis Managing Principal Valitus Group, Inc. 18031 Irvine Blvd., Suite 205 Tustin, CA 92780 714.505.9122 [email_address] www.valitusgroup.com

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Exposing the Myth Of Planned Obsolescence: Why the Sales Compensation Plan Must Change

  • 1. TrueConnection Sales Performance Management Conference 2007 November 13, 2007 The Myth of Planned Obsolescence Why the Sales Compensation Plan Must Change
  • 2.
  • 3. When it comes to sales compensation plan change, the voices heard from the field… “ Why should we change the plan; we’re not losing staff?” “ We just figured out how to make money on the old plan, so they have to change it!” “ Management’s just trying to cut costs!”
  • 4.
  • 5. WorldatWork survey of sales compensation practices – reasons for change WorldatWork Survey of Key Sales Compensation Practices, October 2006
  • 6. Definition of obsolescence… The American Heritage Dictionary of the English Language “… being in the process of passing out of use or usefulness…” Merriam-Webster Dictionary of Law “… a loss in the utility or value of property that results over time from intrinsic limitations or external circumstances…”
  • 7.
  • 8.
  • 9.
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16.
  • 17. Questions? J. Mark Davis Managing Principal Valitus Group, Inc. 18031 Irvine Blvd., Suite 205 Tustin, CA 92780 714.505.9122 [email_address] www.valitusgroup.com