|By Business Wire||
|May 20, 2014 01:00 PM EDT||
Xactly, a leading provider of cloud based incentive solutions, announced the SaaS Industry Incentive Compensation Benchmark. The first study of its kind, based on empirical data, the 2013 benchmark analyzed the sales and incentive compensation patterns of SaaS companies to pinpoint the impact of compensation on sales performance. Surprisingly, the study revealed that a large percentage of quota-carrying SaaS sales representatives are not hitting their goals: 79 percent of sales representatives miss quota and 14 percent never achieve even 10 percent of quota. Across the entire SaaS data set the average quota attainment is 58 percent. The data remained consistent regardless of tenure.
These patterns were consistent across all companies analyzed – regardless of size or market. The report indicated that SaaS companies are prioritizing growth rather than traditional sales performance. The report also found that SaaS companies with under $100 million in sales are paying more in variable compensation relative to companies with more than $1 billion in sales, on average 46 percent more. The report shows that smaller companies are paying $1,000 in variable compensation for every $22,000 in sales, compared to larger companies that pay $1,000 in variable compensation for every $36,000 in sales.
A sub-set of the data demonstrated an extreme dynamic where the traditional bell curves were inverted creating a bimodal distribution of performance, with high populations either overachieving or failing miserably. “The data indicates that these SaaS companies may be responding to demands for growth with a feast or famine mentality, creating the risk of being too heavily dependent on top sales performers,” said founder, president and CEO Christopher W. Cabrera of Xactly Corporation. “This approach indicates that SaaS businesses may be tolerating underperformance and need to re-think their sales strategy to meet long-term company objectives of growth, retention and profitability.”
Tenure Doesn’t Matter
- On average 15 percent of sales representatives who were in their roles for at least one year made quota, and 5 percent didn’t achieve even 10 percent of quota.
- Similarly, on average 16 percent of sales representatives in their role less than one year made quota, and 19 percent didn’t achieve even 10 percent of quota.
Download the full report at http://bit.ly/1oJZfZK.
The SaaS Industry Incentive Compensation Benchmark is the first in an ongoing series of Xactly reports. The data for each benchmark is accumulated and analyzed from annual, anonymized sales big data within Xactly’s enterprise cloud compensation platform, which calculates more than a billion transactions each month and more than $10 billion in incentive compensation payouts over the last two years. With terabytes of information flowing through Xactly’s cloud compensation platform, data can be sliced by industry, role and company size, delivering new intelligence and best practices to customers across departments and industries. The next two reports in the Xactly series will offer insights on the software and business services industries.
Xactly also offers custom reports to customers looking to benchmark their compensation performance against like companies.
- Xactly Corporation
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About Xactly Corporation
With Xactly, companies of all sizes and industries can unleash the motivational power of their incentive compensation programs to inspire better employee performance and business results. Xactly’s secure, cloud-based incentive compensation and performance management solutions enable emerging businesses to Fortune 100s to easily design, manage and optimize incentive programs that save time, cut costs, reduce risk and align employee behaviors with corporate goals.
As evidence of Xactly’s continuous innovation and exceptional customer-centric culture, the Wall Street Journal twice named Xactly to its “Next Big Thing” list; Great Place to Work featured Xactly as one of the top 25 small workplaces in the nation in FORTUNE Magazine; and the Market Leader in Incentive Management by CRM magazine for the past five consecutive years. Salesforce.com customers also voted Xactly the best sales compensation management solution in the Salesforce AppExchange Customer Choice Awards. To learn how you can inspire better performance with Xactly, visit http://www.xactlycorp.com or call 1-866-GO-XACTLY (469-2285).
Xactly Corporation. All rights reserved. Xactly, Xactly Incent, Xactly Express and “Inspire performance.” are trademarks or registered trademarks of Xactly Corporation.