Transparency breeds peace of mind. It gives us confidence that things will function how we anticipate. If we clearly understand how and why something is the way it is, we are more likely to see value in it. The more complex something is, the easier the scaffolding of its structure gets muddy. There are more moving parts, and hopefully each of those parts is essential.
But simplicity is what makes things easy to understand. Transparency is a crucial component to every aspect of your business from operations to sales, but it is often predicated on simplicity. If your company has a sophisticated commission structure, there is no getting around it being complex. The issue then becomes how to keep the same level of sophistication without sacrificing transparency.
The answer is to automate your commissions. Your business will reap rewards both for your sales team — on the payouts side — and operationally.
People respond to incentives. If those incentives are lost in a sea of murky parameters, they never have a hope of ushering people toward the desired outcome. Recurring revenue from commissions complicates incentives. A simple 3% commission on a car sale is pretty straight forward. But a continual payment, like say a commission from an insurance policy — something the customer pays monthly and might cancel at any time — or when bonuses are different than the norm — say sales people earn 5% instead of 3% throughout January for selling sedans — throws a wrench into things.
If you want to motivate your salespeople to make sales that meet specific criteria, they have to know which levers to pull. This is where transparency comes in.
Take a simple scenario: when we drive, we do so (most of us) within the bounds of the law. There is a penalty for, say, speeding. That penalty — the cost of the ticket, the points on our license — are an incentive to follow the rules. More accurately, they are a deterrent to us driving too fast.
If the goal of the speed limit is to deter people from speeding, transparency is incredibly important. Nowhere is this more important than when money is involved. In a business environment, a relationship between hard work and compensation is a great motivator, so clarity around how much, when and why sales people earn commissions is paramount.
But, not everything is, or even can be so simple. Complexity allows for nuance, but is also often antithetical to transparency. If your employees work on commission, having precision around how those commissions are calculated gives them insight into the relationship between their work and its reward. Automating your team’s commissions will allow them to better understand the how and why of their earnings. They know the rules, and the incentives you offer will be more powerful.
As if giving sales people the right incentives were not enough, automating your commissions has operational benefits as well. By automating commission calculations, your company cuts down on errors. This not only gives your internal sales people stability, but it also gives potential external employees who would earn commissions confidence. Since commission calculation errors are so common, when you eliminate them, you attract the best people to your company by being transparent in how commissions are calculated.
Not only does automating commissions cut down on the time spent entering commissions, but it also makes it easier to craft incentive plans. Having a more agile commission structure allows you to be more reactive on a granular level. Maybe you want to respond to the market and push certain products based on your inventory.
By automating commissions, you can incentivize sales people during smaller periods, whether it is selling software based on what you want to emphasize for a particular month, selling mortgages during a certain day of the week or cars during the lunch hour. Those parameters sunset automatically; they are more concrete than someone coming onto the sales floor and simply detailing said incentive.
This level of detail allows your company to grow how you want, moving the products and services that you want to sell and maximizing profit. Further, you can see commissions in real-time, giving you insight into where your company is trending. Automated commissions even allow for a what-if scenario. This feature can give those crafting incentive programs predictions as to how certain incentives will play out, allowing them to change them on the fly or opt for a different model from the outset.
Further, checks for commissions are auto-generated, cutting down on labor to issue checks and expediting reconciliation, getting the pay-out off the books sooner. For small commissions, like those for insurance policies that may be a miniscule amount — say less than $1 — the software will also consolidate those smaller commissions into a larger sum once per pay period. Your business doesn’t have commissions floating in the ether waiting to pay them out. Sales people get paid sooner. Everybody wins.
On a similar note, automated commissions will point out previous discrepancies in commission calculations. It also allows for the flexibility to alter them. Perhaps someone made an error entering a commission. Maybe there was a technical issue. Either way, you want to ensure your sales person gets the commission, because the system didn’t register it since the window had closed. They made the sale during the specified time, but something went awry between making the sale and it being entered into the system. You can still go back and correct the issue without any difficulty.
Automated commissions are essential to maximize your company’s efficiency. The more complicated the commission structure, the more you benefit from having automated commissions. Our experienced team can set up Dinero, a native app available on Salesforce AppExchange built by Accelerize360, to get automated commissions up-and-running quickly.
Setting up Dinero doesn’t take much legwork. So long as you have all the details of your incentive program codified in a spreadsheet or something similar, our team will be able to automate your commissions and solidify transparency. Transparency builds trust. Trust improves confidence. Confidence ensures efficiency. Contact our team.