Every new software purchase requires a clear return on investment (ROI) in today’s business climate.
Incentive management software is no different.
While the qualitative benefits of sales compensation automation provide revenue teams transparency and enable business growth and goal attainment, what are the cost savings?
We’d argue that time saved spent calculating, scheduling payouts, and addressing pay discrepancies and flagged deals equals money saved, but it’s not always clear just how that translates to dollars.
So, to help, our VP of RevOps, Ryan Milligan, built this ROI calculator to prove the quantifiable return of purchasing QuotaPath. Our calculator uses variables like manual costs associated with reps tracking commissions, incentive management admin costs, and performance improvements when using QuotaPath.
This blog is intended to provide an intro to QuotaPath and its benefits, including ROI.
Let’s get started.
Understanding the Cost of Manual Processes
Manual commission calculations and data pulling cause you to incur hidden costs. These administrative tasks keep reps from focusing on selling the deals that make them the most money, which impacts rep productivity and often leads to frustration and demotivation.
Likewise, RevOps and Finance leaders get bogged down with these calculations at the end of the month. We have many admins who, before QuotaPath, “dreaded calculating commission” because of the influx of rep questions (and sometimes anger since it’s their money) that follow a commission pay period.
Some real-life examples illustrating the impact of inefficient processes on business operations can be seen in our customers’ experiences.
For instance, Muck Rack cut the time spent calculating commissions from 5 days to 6 hours as they scaled their team from 50 to 100 reps. Before automating with QuotaPath, they manually built a commission spreadsheet for each rep, a labor-intensive, error-prone, and unmanageable process as the team grew.
Blackthorn is another QuotaPath customer whose manual commission processes became a “formula frenzy” as they scaled. They leaned on Salesforce formulas to calculate commissions early on until they found, “Formulas could not handle the complexity and scale as we expanded our teams and departments,” Joe said. “Now I can do it myself and directly in QuotaPath without creating a formula. It’s saving us five to 10 hours of work for every new quota.”
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Talk to SalesCalculating Rep and Admin Costs
Ready to calculate your QuotaPath ROI?
Here’s a breakdown of the variables involved in calculating rep and admin costs:
QuotaPath cost
Annual QuotaPath cost = Users x Price/User/Year
Users: The number of workers using the platform
Price/User/Year: The annual cost for each worker that will be using QuotaPath
Rep cost
Annual Rep Cost = Reps x Hours/Rep/Month x Rep Hourly Rate
Reps: The number of non-administrative workers using the platform
Hours/Rep/Month: The number of hours each rep spends tracking and calculating their earnings.
Rep Hourly Rate: The average rep salary at a certain OTE, backed into an hourly fully burdened rate.
Annual rep cost: The cost associated with reps manually tracking their earnings.
Admin cost
Annual Admin Cost = Admins x (Pulling data + Calculating + Rep questions) x Admin Hourly
Admins: Number of Admins managing compensation.
Pulling data: Number of hours spent pulling data
Calculating: Number of hours spent calculating commissions
Rep questions: Number of hours handling rep earnings questions and discrepancies
Admin Hourly Rate: A fully burdened hourly rate for Admins based on average Admin salary.
Annual admin cost: The cost associated with Admins manually managing compensation processes.
Performance improvements
Performance increase = Reps x Annual quota x Attainment lift
Reps: The number of non-administrative workers using the platform
Annual quota: Average annual quota per rep.
Attainment lift: Percent increase in rep performance after giving reps increased visibility to their commissions, enabling them to select the best deals to pursue and helping them understand how they earn, driving overall attainment improvements.
Performance increase: the additional amount reps will produce with greater selling time and compensation transparency.
Qualitative Benefits of QuotaPath
QuotaPath offers other benefits that aren’t as easily measured, including:
- Motivating reps: 30% of revenue leaders admit their plans fail to motivate their teams. QuotaPath solves this issue by providing reps visibility into commissions and compensation plans. This enables sellers to understand how they earn commissions, track earnings progress, and identify the best deals to pursue.
- Builds trust and alignment across Sales, RevOps, and Finance: 75% of Sales Reps don’t trust they are paid fairly. With QuotaPath everyone can reference the same data source for compensation–Reps see breakdowns of how they are paid, and Finance has clear insight into deal data and commissions on each deal.
- Provides valuable performance insights: QuotaPath gives leadership access to actionable dashboards that can provide insights into performance and help them prioritize coaching.
- Compensation modeling and testing: QuotaPath enables revenue leaders to test future comp plan changes using past historical data from their deal data source (ie: CRM). It also enables them to model the compensation cost for the next year.
- Logs planning and audit data: QuotaPath creates a log of compensation data, disputes, resolutions, and more for planning and auditing purposes. This is particularly important for ASC 606 revenue recognition compliance.
- Fits into existing tech stacks: QuotaPath seamlessly integrates with your favorite tools including HubSpot, Salesforce, Pipedrive, Quickbooks, Stripe, NetSuite, Close, Zoho, Copper, Google Sheets, and Excel.
- Encourages rep ownership and accountability over commissions: Reps get greater visibility and understanding of how they earn commissions with QuotaPath. This gives them greater control and responsibility over commissions.
- Eliminates the “black box” that compensation info has historically lived in: QuotaPath provides compensation transparency across your organization, eliminating confusion and misunderstandings.
- Helps Finance teams avoid hidden commission costs: The adjustments you implement in your compensation structures can trigger cascading effects that might not be immediately apparent. Our comprehensive reporting equips you with the necessary data to swiftly identify issues before they adversely affect overall team performance in the long run.
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Calculate NowSuccess stories
Don’t take our word for it. Consider these testimonials from QuotaPath customers highlighting their experiences and ROI.
EverView is an excellent example of how sales compensation automation and transparency with QuotaPath enabled them to achieve record sales.
Before teaming up with QuotaPath, EverView had 35 compensation plans for a sales team of 80. Fifty percent of their sellers reported not understanding their comp plan and didn’t know how much they had earned until they received their paychecks.
After launching QuotaPath, EverView consolidated their 35 plans into eight and then to 1 in QuotaPath. Reps could track plan attainment and current or future earnings on demand. This led to EverView having its highest sales year, with 70% of the team hitting quota and 20% achieving 90%.
“The move to QuotaPath freed our sellers to do what they do best, which is build better relationships with our customers,” said Dennis.
“Our comp plan was easily measured and easily viewed by our sellers in QuotaPath, which drove positive selling behaviors,” Ron said, “We had the best sales year in the company’s history.”
Prefect is another great example of a client who benefited from QuotaPath’s sales compensation automation and transparency.
Before partnering with QuotaPath, Prefect’s Finance team managed compensation with spreadsheets. Their plans to triple the sales team necessitated a scalable compensation solution. They also wanted to provide their reps with greater visibility and understanding.
“We cut our time spent on commission calculations by 50%+ and have enjoyed providing real-time transparency to our sales reps and technical pre-sales team,” said Tom Egbert, Head of Finance. “This platform has significantly upgraded our sales compensation process. From the time saved on the financial side to our reps fully understanding and feeling motivated by our incentive structures. QuotaPath saves days of time worth of unnecessary spreadsheets and emails.”
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Try the most collaborative solution to manage, track and payout variable compensation. Calculate commissions and pay your team accurately, and on time.
Start TrialConclusion
Sales compensation automation and transparency aid business growth and goal attainment.
Automation eliminates the hidden costs associated with manual incentive management while it boosts sales rep and compensation administrator productivity.
Transparency helps sellers understand how they earn commissions, identify which deals to prioritize, and motivate behaviors that drive quota and organizational goal achievement.
Explore QuotaPath and unlock the potential ROI for your organization with a free trial and schedule a demo with our sales team to see the ROI at their organization.
