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Synygy, Inc.

Synygy, an authority on salesperformance management, is thelargest provider of solutions forsolving problems related to themanagement of sales compensationplans.

One of the most critical actions that can drive sales performance – and the top and bottom lines – is the effective management of sales compensation plans. Yet most organizations experience costly problems – including strategic misalignment, limited modeling, misunderstood plans, errors in results, lack of information, an inability to adapt to change, and process inconsistency – as a result of poorly managed sales compensation plans.

The costs associated with these problems fall into six categories:

• Costs of administrative resources;
• Costs of information technology resources;
• Costs of overpayments and errors;
• Costs and lost revenue due to salesforce turnover;
• Lower revenue resulting from less selling time; and
• Lower revenue and margins because of poor behavior and motivation of salespeople.

Sources of Errors

The management of sales compensation plans is a complex set of processes that takes specialized expertise and experience – and sufficient resources with enough time – to do well. Yet most organizations lack a consistent, reliable source of expert resources, not to mention an understanding of best practices associated with plan management. This results in hidden and direct costs associated with insufficient, misdirected or untrained administrative and IT resources.

It is estimated that up to 8 percent of all sales compensation expenditures are overpayments. Plus, when there’s a lack of trust in the plan due to errors in results or frustration because of lack of understanding of the sales compensation plan, turnover of the best salespeople goes up. This not only increases the costs of recruiting, hiring and training, but revenue and margins suffer due to the inexperience of new-hires.

Ineffective sales compensation management also leads directly to salespeople spending time doing things other than selling – such as doing shadow accounting, inquiring about the plan, disputing plan results and complaining to others about the plan and plan results. With sales management having to spend extra time handling inquiries and disputes, the sales team’s ability to generate revenue is decreased.

But for most companies, the greatest of all of the costs of poorly managed sales compensation plans are those related to the behavior and motivation of salespeople. These costs stem from less than optimal customer targeting, not selling the right products or services and too much discounting. Furthermore, the inability to adapt the sales compensation plans in response to changes – including new sales strategies and tactics, new products, discontinued products, changes in pricing and competitive movements – results in lost opportunities.

Getting Costs Under Control

At Synygy, our focus is uncovering your sales compensation management problems, identifying the costs of not fixing those problems and delivering a solution that solves the problems and eliminates the costs. Synygy does this by diagnosing the problems you are facing, and then crafting a solution consisting of a blend of software and application management services, process automation services and process management services.

We invite you to contact us for further discussions on diagnosing your sales compensation management problems and best practices for improving the overall effectiveness of the variable pay programs for your sales channels. Visit www.Synygy.com or phone 610.494.3300.