Budget management is a key success factor: this budget must not be exceeded, of course, but it must also be well spent.
Fanny Millet
Article written in collaboration with Sabri M’tibaa, Technical Manager at Sofrecom Tunisia
In an increasingly competitive telecommunications market, sales force motivation is a key success factor. Rethinking commissions has therefore become crucial.
Commissions are thus the crux of the matter. A well thought out commission plan will push sales in the direction desired by the company. But it is not enough to define commission rules; it is also necessary to be able to apply them clearly and manage the entire calculation and payment process efficiently.
Commissions are still often manual
This is all the more complex in Africa, where operators mainly rely on street vendors for their distribution networks. Equipped with a mobile phone at best, they do not have the computer tools available in stores to capture sales. These street vendors still often use paper and manual processes, at least in part.
In other countries, the calculation of commissions remains manual: these calculations are made using an Excel spreadsheet and are based on flat files extracted from the IT system. The scattered nature of the data and the complexity of the rules on commissions make the task all the more difficult.
This lack of automation causes several problems:
- Increased risk of error
- Much longer processing time
- As a result, it takes longer for payment to be made
- Possible fraud
- Lack of real-time visibility on the achievement of objectives, either on the part of the seller, the area manager or the operator as a whole
The solution involves digitizing the process from start to finish: the commission plan is determined in a software tool accessible from any type of equipment (PC, smartphone, tablet). This tool, which is integrated into the operator’s IT system, will collect all the necessary data. Thus, they will be able to calculate, in real time, the rate of achievement of objectives and the corresponding amount of commission due to each seller, store or territory.
Digitizing for greater productivity
Without visibility on the achievement of their objectives, salespeople will spend a lot of time checking and recalculating what is owed to them. One of our clients estimated that his salespeople spent on average 30% of their time tracking, estimating or recalculating their commission.
Effective management is therefore a source of both motivation and productivity.digit
Digitising to increase loyalty
With indirect sellers, who generally work with several brands, it is also a loyalty and motivation tool. If the commission percentage is identical, a distributor will naturally push the products of the partner that is the most transparent and quickest to pay commission. For the operator, the fluidity and transparency of processes are assets to be highlighted: they will facilitate the recruitment and retention of the most efficient direct or indirect salespeople.
Digitizing for more flexibility
Good software will make it possible to set up very elaborate commission plans. This fine-tuning will effectively support the achievement of the operator’s objectives on a particular product line or in a particular region. The implementation of the plan and its sharing with the teams concerned will also be accelerated. It will thus be much faster to launch new offers or temporary promotions.
Digitizing for improved control
A digitized process also makes it possible to monitor sales and commission plan performance more effectively. With real-time visibility, commission rules can be adjusted if results are not in line with objectives or allocated budget.
Budget management is a key success factor: this budget must not be exceeded, of course, but it must also be well spent. An unspent commission budget is a warning not to be overlooked. If the rules are too restrictive, the objectives are unattainable, or any other problem hinders sales, we end up with dissatisfied, discouraged salespeople who are ready to join the competition.
So, with a good tool, you can also test different scenarios to choose the one that would give the best results. It is therefore also a precious aid for anticipating and drawing up rules.
