Sales Compensation Strategy: Creating Effective Reports
Tips and Best Practices for Structure, Formatting, and Gaining User Buy-In
What is the sales compensation reporting experience like for your end users?
Companies seeking to improve their sales compensation process often only consider accurate incentive calculations and models that run efficiently, but stop there. However, with subpar sales compensation reports, the investment into improving the process doesn’t make a difference for the user experience. Oftentimes, reporting is the critical piece of a sales compensation strategy that either makes or breaks the focus of the sales team – either they will be held up asking questions about the what, when, and why of the payment calculation, or they will be able to quickly access the information they need to move on and perform at a higher level.
In this blog, we’ll walk through the play-by-play of an effective sales compensation reporting strategy from the industry insider’s perspective, taking years of tribal knowledge from OpenSymmetry’s sales performance management consulting team and distilling it into the most impactful steps to take. We’ll start with the high-level approach to reporting, then delve into formatting and visual best practices. Finally, we’ll dissect the ways to bring in end-user feedback before, during, and after the build phase for maximum engagement and impact.
Key Sales Compensation Reporting Principles
Ultimately, successful sales compensation reporting drives behavior and accelerates sales performance. Some key rules of thumb to keep in mind include:
- Cater to the standard user, not the exception. Rather than taking into consideration every possible role on the sales team and each potential scenario for payees, consider the key data points that every end user will want to see (“What am I getting paid? When am I getting paid?”). Be committed to not overcomplicating reports.
- Tell the data story. Sales compensation reports should be intuitive and easy to understand. How does the comp plan work, what’s the data, and how was the data used to evaluate performance and derive a payment? Consider the end user perspective and tell the story behind their performance stats and pay information.
- Help users take immediate action. Drive behaviors in a timely way that helps payees take immediate action and elevate their performance, not giving them information that they needed five months ago. Consider data structures that give reports as close to real-time as possible.
- Be proactive. When designing your report, imagine that payees will be able to get in and out of the portal so they can go back to what they do best, which is to sell or to manage. You don’t want them to reverse engineer or click around. Ultimately, if you can provide the reps and managers with information that they want (even if they don’t know they want it yet), giving the answers you think they would want to have, then you’ll preempt their emails. Even five fewer emails a week means time gained.
As sales and incentive comp systems are being built, reporting may be an afterthought. However, if you are getting off an old system and building one from the ground up, taking the time up front to consider what will be included in the reports will save months, even years of headache and heartache. In a successful project, the elements needed in your reports will dictate how the system will ultimately be built out, including determining where the stopping point of your calculations will be.
For example, a system engineer may say it only takes 10 steps to get to a certain calculation to get the result you need. However if, say, HR wants one of the points that was skipped over in that calculation to be displayed in the ultimate report, you’ll need to build a workaround or a band-aid calculation later, wasting time and effort that could have been preempted. Take the time upfront to make mockups and get feedback from the field about the report requirements that will ultimately be needed when building out the sales comp system.
Intuitive and Effective Sales Compensation Report Formatting Guidelines
Last week, we looked at the key guidelines to approaching a sales compensation reporting strategy that keeps the end user needs in mind. In this section, we’ll examine the visual elements of any effective sales compensation report.
From a navigation standpoint
As you begin to design your reporting structure, start by keeping in mind how your end users will interact with the web portal. This will ultimately gain buy-in from users, since the web portal and the reports are the face of the sales compensation program for payees. If your calculations are accurate and quick, but the reports are difficult to understand and there is too much (or too little) data, it’s ultimately a waste of an investment as payees spend more time asking questions than getting answers. When reports raise questions from payees, confidence in the reports is lost.
From the OpenSymmetry approach to building a report portal with intuitive navigation, some key tips to take away include:
- Have the report portal open with the report that is most important displayed first. Less is more when it comes to data, but less is also more when it comes to clicking. When the viewer spends less time looking for the information they want, then they can get back to doing what they’re tasked with.
- Remove unnecessary tabs. Again, less is more! When it comes to what the end user can click on, remove anything unnecessary, because ultimately end users will click through any (and all) tabs, spending needless time looking for that extra nugget of sales comp information that they think they might want or need to know.
- Minimize horizontal scrolling. In our experience, vertical scrolling is fine, but users should have a full view of the information they need left to right. For an effective user experience, keep data to a few columns and make use of rows for clean formatting.
- Create a mobile-friendly version of the report. Think about the needs of end users who are often on the move and need information at their fingertips. A report may be at its peak usefulness out in the field, rather than when end users are sitting in front of a desktop computer.
From a formatting standpoint
Report formats may look different in every incentive compensation management (ICM) and payment tracking tool, but from our years of experience with ICM tools from top suppliers, we found that the most effective reports consistently include these design rules:
- Align matching fields. Clean, correct display of data in reports should be aligned with proper conditional formatting. For example, if the title of the report is left aligned, then data under it should not be right aligned but rather, left aligned.
- Only display the essentials. Again, less is more (starting to see a pattern?). Display only basic information on the main page and create options for deeper drill down. With that said, show the math for how final numbers are calculated (ex. (Deal amount x 2% commission) – Texas sales tax). Preempt questions end users would otherwise email the comp admin for how things were calculated – instead, just link to the calculation.
- Emphasize important data. What is the most important piece of data people want to know? Their pay! Make essential information easy to see and find by using a bold, color, or large font. Put their final payout near the top of the page where it is easy to find.
- Use buttons and images. Action buttons create a more intuitive navigation in reports. For single hyperlinks, use a button or image for an elevated web experience rather than text.
- Avoid using dropdowns. For end users, dropdown menus are usually only useful for managers and not the average payee. For the most part, try to avoid using dropdowns and opt for a link through to lists or dashboards instead, when appropriate.
If a sales compensation report is formatted successfully, it should be clean, easy to read, and professional. The look and feel should be consistent, and nothing should stick out as odd. Often, the best reports are simple and intuitive.
Maximizing User Engagement in the Sales Compensation Reporting System
Lastly, we’ll discuss the top three tips from our sales compensation management consultants to maximize the usefulness of sales compensation reports for end users. These tips include having flawless accuracy in your report calculations, providing tools to answer common questions and fill anticipated needs, and invite end user engagement through concrete pages and activities.
1. Make sure your calculations have flawless accuracy.
Ultimately, the highest aim in a sales compensation report calculation is to avoid future recalculations. Even if you’re off by a few cents, corporate would want you to recalculate to make sure you always get it right. Make sure no numbers are left in question, because once the sales team loses confidence in the data, they will start to pull out their own calculators and it’s downhill from there. You’ve ultimately lost, because you’ve lost their trust. Once they begin to recalculate everything themselves, sales reps may spend twice as long looking at reports—taking them away from selling activities—and potentially even criticizing the comp plan.
I would urge everyone on a project to pull out a calculator, do the math, and see if the report is accurate. Even if it’s a penny off in rounding, it’s going to raise a question and prompt someone in the field to send an email. Will that one penny be worth the 10 minutes it takes to respond to their email? The ripple effect it has of reading and responding to the email is just a headache. So check for the accuracy of report calculations, including correct (and appropriate) rounding.
2. Fill in the knowledge gaps with tools and resources.
Great sales compensation report portals and dashboards anticipate that end users will have a mostly common pool of questions that can be anticipated so that answers are readily available even before they’re asked. Add value to end users by including the following items in the report portal:
- FAQ tab: Have comp admins take all questions that come in from the field through phone or email and add them within the web portal in an FAQ section.
- Tutorials page: Especially if there is a completely new way to access and generate reports, include a tutorials page that provides training materials such as PDFs and videos.
- Hyperlink tool tips (question mark button): For any calculation, anticipate questions by including a hyperlink (or question mark button) that takes them to an explanation of how the calculation works.
- Support (preferably live support): Report portals should include a place for end users to submit questions and report issues so they can be resolved in a timely manner.
Ultimately, these tools should answer questions from end users before they ask them so they can maximize their time selling or managing. The sales comp team’s time will also be maximized, creating a win-win scenario. It is well worth the investment to call out areas that warrant explanation, such as complicated calculations, and provide additional information up front that the field might need. These tools empower, educate, and motivate end users to engage with the report tool and get the information they need to do their jobs faster and better.
3. Get the end users engaged in the web portal.
Finally, before launching the new report tool, strategize the best ways to encourage end users to take ownership of the new system. This happens by engaging end users through specific actions that might include:
- Creating a suggestion box. Have a specific input form or tab where end users can type in suggestions for what they would want to see. This might reveal things that didn’t come up during initial design discussions.
- Holding a contest for best ideas or to identify issues. Have the end users beta test the tool by going through the report portal and identifying all issues and potential issues, even giving a prize to the user who identifies the most number of issues during the testing period. Another way to encourage a sense of ownership of the tool can include asking end users to name the tool.
- Allowing users to add notes to their report. If end users have questions that come up while reviewing the new report tool, they should be able to make notes directly on the page where they have their questions. This will allow them to pull up questions and issues while in the manager’s office or through a screen share, rather than having to remember the issue and try to explain it without a visual.
Ultimately, report tools should be tailored to match the average end user’s needs. A successful sales compensation reporting tool will give end users the information they need, as well as total confidence in the calculations, in a format they can read best. Sales compensation management tools are implemented to drive positive behavior, and this can only be done when the tool communicates the right information quickly and clearly. When considering the investment in designing a new report system, or just a reformatted version of the current one, consider how to empower end users so they can do what they do best, even better.
Have specific questions about updating your sales compensation report portal or how your company’s sales compensation reporting stacks up to those of other companies? Read our recap from a recent incentive compensation and sales performance reporting webinar with Sales Management Association.