The company is a global provider of technology solutions to banks and other large financial services clients. Although the international sales group operates globally, it only accounts for a small portion of total revenue. The group promotes most of the company’s core products and solutions and has until recently, operated on an autonomous, regional basis. The company is looking to drive more consistency in sales execution and programs—including sales compensation—and to ensure tighter alignment with global strategic goals.
Total contract value (TCV)
Annual contract revenue
Management by Objectives (MBO)
Professional service/consulting revenue
The market continually expands as banks and financial institutions increase their mobile offerings. The industry is also shifting from selling perpetual licenses and maintenance contracts to a managed services model that provides recurring revenue streams.
Making the shift to SaaS (Software as a Service) from enterprise sales is a difficult financial adjustment, because it shifts revenue from large upfront payments to smaller amounts over an extended period.
Responsible for named accounts and new business generation within a particular country.
Responsible for managing existing customers.
Responsible for new business generation within assigned territory.
Pay mix levels limited to a 15% range within the same role, e.g., account managers must have a pay mix between 60/40 and 75/25.
Menu of measures—each plan may select up to three measures from a menu of up to five options.
The payout formula specifies an individual commission rate (ICR) for TCV and revenue or a flat/tiered bonus amount for other measures.
Guidelines for modifiers may include up to one modifier to be applied to the primary measure with up to a +/–20% impact.
The company’s existing sales compensation plans previously had the same structure and measures regardless of role. The new global framework differentiates sales compensation plans for each role according to responsibilities.
The existing account manager sales compensation plan had no ties to revenue and measured on TCV. This caused some account managers to focus only on signing new contracts letting existing revenue streams erode. Under the global framework, revenue for all assigned accounts is the new primary measure (weighted at 50% to 80%).
Plans for sales executives (new business focus) must also include an impact revenue component. If sales executives achieve Q1 and/or Q2 TCV goals, the measure is paid. Deals signed earlier in the year enable the company to recognize revenue earlier and this measure will help drive the desired behavior.
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