Qlose is an interview format that meets the best experts in sales reps to find out how they contribute to the sales performance of their company.
For this fourth episode, Qobra welcomes Corentin Vivensang, Sales Operations at Pretto, and he will share with you his methods, tips & best practices to manage the commission topic.
1. The context
Can you introduce yourself?
Corentin Vivensang, Sales Operations at Pretto since September 2021.
At Pretto, as a Sales Ops, my missions are based on 3 main themes:
- Business Intelligence", i.e. analysis, dashboard construction, maintenance of management tools, etc. In concrete terms, this allows us to give business visibility to each level of our organization (credit experts, managers, CSO, etc.).
- Project management and operational implementation of Pretto's strategy. This translates into the implementation of new products, the creation of new compensation, the efficiency of lead dispatch, etc.
- Administration and support, i.e. operational management of tools and processes in collaboration with the Tech, Data & Sales teams.
What is your role in the commissions topic?
At Pretto, as the person in charge of calculating the commissions of the various teams (Credit Experts, Insurance Experts, etc.), this implies participating in the reflection of the remuneration system until its implementation.
This involves managing the methods for calculating KPIs and implementing the compensation structure within our tools, including Qobra. There is also all the data reliability, verification of signed contracts and, finally, the transmission of bonuses to HR.
2. Commission management at Pretto
How do you benchmark for commissioning plans? Any tools, resources?
We have recently changed our commission plans, and for the time being, we have not done an extensive benchmark. Instead, we had several discussions with Sales and Sales Ops from other companies. At that point, we realized that most variable commissions systems were built in the same way, so we drew inspiration from established best practices, we didn't want to reinvent the wheel.
For us, the biggest challenge during this change was to find a system that would adapt to the different strategies of the company without changing the philosophy of compensation. We had to find a system that would allow us to be flexible. To achieve this, we called on the Qobra teams, and in particular Antoine Fort and Nicolas Roussel, who came to audit our plan and give us the best practices.
What are the indicators taken into account for the commissions at Pretto?
What you need to know is that at Pretto, we work in B2C, we mainly sell credit. And so, for example, for our credit experts, the commissions are based on two main types of indicators.
Quantitative indicators, i.e. contracts signed, to which we will apply a coefficient depending on the type of contract. Then, depending on the seniority of the sales reps, some are commissioned according to the turnover (confirmed/senior) and others according to the volume of sales (junior). This allows us to avoid missing out on low-value contracts.
Then there are also qualitative indicators, on which we will apply a bonus or a malus. In concrete terms, sales reps who have a percentage of detractors above a certain standard (measured by the NPS), will have a malus on their commission base or on their business volume. On the other hand, they will not have a particular bonus if they exceed a predetermined NPS score. On the other hand, we also measure the percentage of 5-star reviews obtained by our sales reps on Trustpilot, and if they exceed a certain threshold, they get a bonus.
These qualitative indicators were put in place following the identification of a shortcoming in this topic. We first tried to manage this problem in a managerial way, to put it in the routine of our Sales people, but it didn't work, or at least it didn't work as well as we wanted. So we decided to integrate it into the commissions to create a real change.
How do you track the performance of commission plans?
First and foremost, we take feedback from the sales people, based primarily on their feelings. We make sure that sales people are committed to the commission plan, that they can project themselves, that they talk about it regularly, that the objectives are achievable and that the plan becomes attractive if they outperform.
And to take the Sales people's feelings, outside the period of change of plan, we do not have a specific meeting since we are very strongly linked with them on this topic, especially at the end of the month or the quarter.
However, on the Ops side, to measure the performance of commission plans, we look at the rate of commission calculation errors, which can happen regularly when the compensation plan is too complex. We also look at the time spent managing commissions, and this can be long when the plan is complex.
Who is involved in the calculation and management of commissions, and what is their role?
At Pretto, the calculation of commissions is a mission of the Operations division.
On the other hand, many employees and divisions are involved in this topic. For example, the finance division for the verification of the validity of contracts, they make sure that the company is paid by the parties involved, and they will potentially readjust the amounts. The Operations department will also be responsible for updating the CRM, modifying the amounts and/or the dates of signature of the contracts. Finally, the HR department is responsible for paying the commissions to each employee.
3. Reasons to review a commissioning plan
What are some thoughts that may lead you to revisit a commissioning plan?
There are several reasons to review your commission plan, but in my opinion, the main reason is the fact that commission plans are not very flexible. From this premise, as soon as the company changes its sales rep strategy, it is difficult to adapt, and therefore the calculation rules accumulate and the plans become complex and opaque to the sales reps. In addition, this generates complex maintenance, and therefore errors, and it creates frustration with Sales with adjustments before payroll.
Secondly,unrealistic objectives can also be the reason for a new variable commissions plan, which can be due to the market situation for example.
Finally, there may also be a turnover topic. The company may find that there are departures, especially of good profiles, because the plan is not attractive enough.
4. Tips to follow and mistakes to avoid
What are your tips for a company that wants to review its commission plan? And the mistakes to avoid?
First of all, you have to know that it is a difficult project because it directly impacts the Sales people, and the change management is complicated for them, which is logical, it determines their remuneration.
Here are my main tips:
- Do it early because it's a project that requires a lot of back and forth between all the stakeholders. Finding the right system and getting everyone aligned is complex. As an example, at Pretto, it took 4 months, and we were in a hurry at the end.
- Announcing the compensation plan well in advance of its implementation to avoid changes during the quarter, and it also allows Sales to project themselves. As an example at Pretto, we organized round tables at the beginning of the project to get feedback on the existing system, and thus understand where the negative points were, and what really needed to be changed for the next plans.
- Knowing how to make sacrifices to gain simplicity and clarity. It's complicated to manage, because we want to find a system that suits everyone (finance, sales, managers, etc.) except that the 100% perfect model doesn't exist, so we have to make sacrifices.
- Explain why you are making these changes and be convincing to all stakeholders.
5. The communication to adopt
What are the various communications made to the commissions?
To start, it is important to open discussions between the various stakeholders (Head of Finance, Chief Sales Officer, Sales Reps, Ops, etc.).
Then, it is necessary to quickly organize round tables, collect feedbacks, but also collect best practices from experts on the topic like Qobra. At Pretto, following these steps, we were able to establish a first commissioning model.
Then, we presented it to the managers, so that they could get used to this new model, and we went back and forth and modified it following their feedback. Then we presented it to the sales reps. This way, as soon as the sales reps had questions, they could turn to their managers who already had the answers to their questions.
In terms of support, to communicate the new commission plan, we made a physical presentation, led by the Chief Sales Officer during the monthly update to the sales reps.
We have also provided an FAQ, and all the details of the commission plan are also available directly in Qobra.
6. Essential tools and resources
Do you use any tools to calculate and manage commissions?
We have been using Qobra since December 2021. It is our tool to calculate and manage commissions on a monthly and quarterly basis for all our employees.
We used to use Google Sheets to calculate and manage commissions, it was pretty flexible but the problem we had was that we couldn't look at past data, we had to historize everything we did on a sheet, which didn't give visibility on what was paid at all.
By switching to Qobra, it's become easy to access past data, with one click we have access to everything we've paid per Sales, per Manager, etc. Then, for the sales reps, the big advantage of Qobra is that they can see their commissions in real time. Before, we had a script on Google Sheets that sent a summary of commissions just before payroll. With Qobra, with one click, we can validate the statements of all the employees, and they can mention directly on the tool if they have a complaint, and on our side, we can answer it easily.
For proper operation, our CRM is connected to Qobra to retrieve data, and we have also connected BigQuery to Qobra to retrieve data that is not present on our CRM.
Do you have any resources to share with us that have helped you build or review variable compensation plans?
I advise to do what we did, to have meetings with specialized teams like Qobra, who have expertise on the topic, it's a great resource. Otherwise, if you can't meet them, there's the WeAreSales podcast with Antoine Fort, which is very good advice on the topic.
What is also important is to take the pulse of your sales team. Indeed, they often bring up good ideas. This can be done for example through round tables as we did at Pretto.
You should also not hesitate to get feedback from other companies, whether it be from sales, Ops, sales reps, etc. This allows you to understand how this topic is managed in other companies.
The last word...
Do you have one or more resources you like to consult that help you improve your Ops approach?
There is the Slack Business Ops Network that I read regularly, which allows me to learn about the problems faced by other Operations teams in other companies.
I also listen to several podcasts like Finscale, WeAreSales and Generation Do It Yourself.