- Find the right starting point. Don’t start with selecting technology when building a Sales Performance Management (SPM) process. First nail down areas that are core to your business and purpose.
- Achieving success. Adhere to three principles: strategy and purpose; vision and key objectives; and creation of an experience.
- Create a framework. Keeping the user in mind is key for successful implementation.
When John Waldron transitioned to the sales compensation team at PepsiCo in 2015, he was tasked with cleaning up the organization’s sales performance management (SPM) process, which lacked transparency, accuracy and ideal automation capabilities.
In his session at WorldatWork’s Sales Comp’23 Event in Chicago, Waldron spoke specifically about how he and his team at the Frito-Lay division of the company led a sales compensation transformation for route sales representatives from a legacy commission plan to a dynamic bonus plan administered with an SPM solution.
Pepsi’s first iteration of implementation was technology-centered, Waldron said, which led to less-than-ideal results. The mix was 25% technology selection, 25% data calculation and process, and 50% build, test and deploy. While there was a 99% calculation accuracy, there was only 90% payment accuracy and just 50% of the process was automated end-to-end.
Additionally, Waldron said there several problems, including:
- Painful manual touchpoints with no defined process owners
- A lack of transparency in sales rep reporting
- No sales rep access to the SPM
- Minimal admin reporting
- A sales crediting logic that could be easily manipulated.
“There was this naïve thought that if we implement this high-tech option. it is going to automate the whole process,” Waldron said. “That’s where we ran into so many issues.”
Small Steps and Fine Tuning
Waldron, now the total rewards director for PepsiCo., and his team in the Frito Lay division were able to improve the outcomes to 97% payment accuracy and 75% automation in the second iteration by 2016. Other improvements included:
- Slightly improved sales rep reporting
- Delivered sufficient admin reporting
- Fixed sales credit logic
- Significantly expanded sales-rep force
By 2019, the SPM improved to 99.9% calculation and payment accuracy and 95% of the end-to-end process was automated. Waldron said there was also a dedicated and capable administration team in place, clear and transparent self-service sales rep reporting and robust reporting and analytics empowering insights.
Waldron said there were three principles that led to this overwhelming success of SPM utilization:
- Strategy and purpose. Firmly ground SPM in your sales strategy and purpose.
- Vision and key objectives. Create a vision and key objectives for SPM to bring the plan to life.
- Create an experience. Create a journey and experience for all stakeholders.
“All three of these items should be unique to your company,” Waldron said. “You can’t outsource any of this. You need to take ownership of this aspect for your implementation or whatever you create will fall short of desired outcomes.”
Framework for SPM Implementation
Waldron said the right mix for the Frito Lay SPM implementation was: 20% on people and experience – which was absent from the first iteration; 30% vision and key objectives; 20% data, calculation and process; 10% technology selection; and 20% build, test and deploy.
“My best advice is don’t start with your technology selection,” he said. “You have to nail down those other areas that are core to your business and purpose before picking your system.”
Waldron provided a framework of best practices for those organizations looking to start their SPM implementation:
- Consider digital friction. You don’t want to make it too difficult for sales reps to use, as this will limit adoption of the technology.
- Communicate at a greater or equal level than initially planned. Think about SPM as a tool that your sales leaders can use to drive their conversations and culture of performance within the organization. Try to unlock and leverage this.
- Resources: Understand that an SPM implementation will likely require additional admin and leadership resources.
- Simplification: Get your sales comp plan design right and then simplify and tighten your process first.
- Processing feed data as frequently as possible. If you put a lot of processes in place, you can identify the gaps in your processes by inputting more data.
- Future proof: Build into your plan provisions for economic changes such as a recession or events that would have a potential dramatic (positive or negative) effect on your business or products.
- Insights: Get actionable macro readings from the data to then apply to fine-tuning the process.
Ultimately, Waldron said it’s key to ensure the process benefits the business and sellers in the organization. So, keeping the user in mind is critical to successful implementation. He noted that once the SPM was firing on all cylinders, aggregated data would be readily available and provided daily to sellers and sales managers as needed.
“From a communication standpoint, we wanted to have a sales rep report that could not be questioned,” Waldron said. “We wanted them to have everything at their fingertips that would answer any questions they might have. At every level, we had something aggregated for the SPM, including staffing data and turnover as well, because the data is there.
“We wanted to drop the actionable insights right in their laps.”
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