Listen: Ensuring that your sales commission process runs smoothly is incredibly important.
Because, among other things we’ll cover below, it’s the key to keeping your sales team motivated and high performing so your company can meet its revenue goals. So, what’s the best way to keep the process running smoothly?
In a word: Automation.
Even though using spreadsheets to keep track of sales commissions may have worked well in the past, there are many reasons why this system is faulty and outdated now. For one thing, using spreadsheets isn’t scalable.
Here’s an example: If your company onboards new employees or changes its commission structure, the spreadsheets will have to be manually updated which is unnecessarily complicated and time-consuming. And, of course, doing anything manually leaves room for human error, delays, dissatisfied employees, and higher overhead.
Don’t worry though – these days, you can automate your sales commission process to make the whole system run on its own or just leverage certain automation capabilities to truly optimize your commission process. Automation can make a world of difference for many different reasons, but we’re going to talk about four big ones that make the switch a no brainer.
1. Efficiency and cost savings… that go beyond paying agents.
This one seems obvious, right? Any time you automate a process it can result in a lot of great things:
- Eliminate manual processes – wouldn’t it be nice to stop maintaining, analyzing, and issuing reports with spreadsheets?
- Reduce human error – imagine no more time-consuming calls from upset sales producers taking up your accounting team’s time.
- Free up resources – what else could your team be working on if they weren’t spending X hours a week processing commission and incentive payments.
These are all pretty typical gains for any optimization or automation process adoption, and they are in most service providers’ sales materials, but here are two benefits of automation that most people don’t think about.
A partner of ours recently let us know that it took two full-time bookkeeping employees more than 80 hours to issue around 150 1099s to their commissioned producers… and this didn’t include reporting!
Most business owners think of 1099s as a necessary evil, but a good automation partner can take that on for you 100%. More importantly, a commission optimization partner with a digital member management platform can pass the responsibility for maintaining the accuracy of 1099 data onto the salesperson receiving the compensation. Mobile messaging and a good user experience will make it easy and stress-free.
Connectivity to Other Systems
Most commission automation providers can integrate with the common payroll systems, but there is so much more potential in API connectivity.
The best commission automation platforms allow you to integrate with third-party reporting platforms and provide alternative compensation options (gift cards, rewards, benefits platforms, etc.), all of which make it easier to track ROI and this gives your agents and salespeople more options.
2. Motivate, attract, and retain the best salesforce.
Flexibility and versatility motivate…. and attract
Flexibility and versatility motivate… and attract
What if you could give your sales team more control and still do less work?
Robust commission automation lets salespeople, agents, and other producers have more control over how they get paid and when.
- A good system allows them to choose how often they want payments issued and set thresholds for amounts within the guidelines provided by the employer.
- A great system lets producers choose how they want to be paid. ACH and checks are mainstays, but what if agents could choose to fund a digital account so they could use their commission in minutes, refill a physical card that isn’t tied to their bank, or even send money to an account that can be used for discounted benefits, services, and savings?
That kind of flexibility creates excitement, and excitement spreads. If you’ve ever had an existing salesperson refer another strong producer to your organization, you’ll understand how powerful that reputation can be.
High employee turnover is extremely expensive for companies.
From a financial standpoint alone, it costs anywhere from one-half to two times an employee’s salary to replace them – and that doesn’t even factor in the amount of time and effort necessary to find the right person.
Why is this relevant? Because errors in commission rate calculations can drive a lot of sales reps to reconsider their role at your company and look for jobs elsewhere.
Obviously, this is an issue. But the solution is simple: with an automated sales commission process, you can reduce errors across the board and increase employee satisfaction at the same time.
3. Stand-up new products, bundle existing options, and create new compensation programs quickly.
The right sales commission automation partner doesn’t limit your options. A good system establishes rails and connections that can grow and shift with your business.
Our insurance partners frequently need to roll new compensation packages to existing agents or incentivize a new group of agents with a special commission offering. The ability to adjust quickly is critical, because you can’t expect agents to sell something they aren’t paid to sell.
New product launches can also face challenges when they are establishing commission systems, especially if the commission structure is hierarchical. A strong, established automation system must enable you to:
- Create or alter rules, percentages, and thresholds quickly
- Establish downstream payees and hierarchical payments
- Sign up new agents quickly, through either a digital, preferably mobile, platform or data feeds and .csv uploads
Those features mean that your commission system can adapt to changes quickly and your new product launch isn’t stymied by paperwork.
One more thing to consider: commission automation is critical for products that have smaller commission payouts. High-volume, lower payout products need the benefits of automation for cost savings, but they need the rails to rapidly reward agents and keep sales rewards front and center for producers to keep them interested in a product that could be perceived as not being worth the effort.
P.S. – We’re going to release a whole blog on this topic soon…
4. More options create better incentive programs
Another factor that many companies don’t consider is that commission automation can allow you to deliver incentives when, and how, they matter the most, not just on a predetermined timeline dictated by accounting convenience.
An automation partner with diverse options allows you to issue immediate rewards for timely achievements. Imagine the goodwill that even a small reward, let’s say $50 straight to their digital wallet for most calls during the day, can create.
Your producers are immediately rewarded for their good work and the reason for that compensation is at the forefront of their minds and not forgotten or lost in a check, four weeks later.
We’ve already hinted at some of the diverse commission options that are available, but it bears repeating and even expanding on.
Going beyond traditional payment options can create amazing programs for your salespeople. Even if you can’t alter your established commission structures, imagine augmenting your core compensation options with a variety of new bonuses and rewards such as:
- Anniversary bonuses to reward loyalty
- Referral bonuses for bringing in new talent
- Recruitment bonuses for new employees in their first week
- Exploding or time-restrained bonuses to drive big pushes
… and those are just a few options.
With the right commission automation partner, you can do all this and more, while still enjoying those basic benefits of automation we talked about earlier.
Ready to automate your sales commission process? We’ve got you covered.
With Agent Pay from Genius Payment Systems, you can use digital payout options to simplify commission payments… and so much more.
Plus, by letting your sales reps choose when and how they receive their commissions (whether through digital wallets, refillable cards, etc.), they’ll be happier and, ultimately, more productive. Our system provides a member management portal that puts them in control.
Interested? Contact us today.