How can you measure the effectiveness of your sales compensation strategy? The goal is to craft sales compensation plans that motivate team members to perform strongly. To measure this, you need hard, quantifiable proof that the return on investment (ROI) truly aligns with your organization’s overall sales compensation strategy. Many companies create sales dashboards to visualize this type of information and quickly see where the strengths and weaknesses are.
Assessing Your Sales Compensation Strategy: Dashboard Considerations
Here are some important sales dashboard design features and philosophies:
- Simplify reports. Focus attention and avoid the paralysis of analysis with too much data. "In order to effectively look at compensation and your ROI, you have to ensure that you have simple reports that are not too analytical that they can’t be read." Joseph DiMisa explained in a recent BLR webinar.
- Use graphical charts and tables. Legends and colors can quickly highlight success stories or areas of concern. "You want to make sure that you have simple charts and graphs that highlight the story—make it jump off the page." DiMisa advised.
- Have appropriate comparison data. Goal information and other external measures are important for validating success or areas of concern. The data needs to be compared to something to help tell the story.
- Utilize historic trending information. Provide time-oriented data across multiple periods (such as a 12-month rolling data set) to discover trends within the data.
- Ensure you always have up-to-date information. Outdated data is of little use. "You have to make sure that you update your data on a continual basis. Typically, anything more than 3 months old is really out-of-date and doesn’t accurately depict a story." DiMisa noted.
Assessing Your Sales Compensation Strategy: Dashboard Content and Design
When designing the dashboard itself, remember that it should:
- Provide desired information. All requested sales data should be available for review or analysis.
- Answer the questions. Content should be sufficient to complete standard analytics, such as comparisons, rankings, and trending.
- Be beyond reproach. Information should be reliable and trustworthy to avoid representatives second-guessing the information.
- Immediately represent the data. A simple, intuitive design should not require extensive effort or time to learn.
- Reduce the need for ad hoc reports. Effective design should include the best presentation of data and reduce the need for additional one-off reporting.
- Maximize focus. Easy-to-find information should take less time to locate and use.
Overall, you must balance between design and content. Don’t have too much information—that’s comprehensive content but creates information overload. But don’t provide too little information to make it too simple visually either. It may be easy to use, but it should still have depth of content.
The data should be easy to understand yet comprehensive and well-balanced. You want your data and your metrics to not only align with your business practices, but also to provide knowledge to the organization.
For more information on creating effective dashboards to analyze your sales compensation strategy effectiveness, order the webinar recording of "Sales Compensation Plans: How To Measure ROI to Find Out If Your Strategy Is Truly Working." To register for a future webinar, visit http://catalog.blr.com/audio.
Joseph DiMisa is a senior vice president and the head of the sales effectiveness practice for Sibson Consulting. His areas of expertise include working with companies to develop and implement direct and indirect compensation plans, sales strategies, and sales effectiveness programs.