Sealing the Deal and Collecting Their Due

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March 31, 2003 (Computerworld) -- Call it a classic case of silo syndrome. Every month, corporate marketing departments spend hundreds of hours and tens of thousands of dollars conducting research, preparing reports and developing promotional materials designed to help their companies' salespeople sell more products and services. The problem is that salespeople often have no easy way to access the gold mine of information.

"Like a lot of companies, Kodak was good at collecting data but not very good at sharing and updating that data," says James Sanford, senior manager of sales communication and strategy development at Eastman Kodak Co.'s consumer imaging unit in Atlanta. The upshot was that a lot of scattered but valuable marketing information and other intellectual property, such as details about customer preferences and orders, was going untapped by the Rochester, N.Y.-based company's sales force.

That's the business challenge Eloquent Inc. is addressing with its LaunchForce content production and navigation software, which enables Kodak, Hewlett-Packard Co. and several other big companies to deliver a full range of product information—including text, synchronized video, graphics, audio and search capabilities—to globally dispersed sales organizations. Earlier this month, San Mateo, Calif.-based Eloquent merged with Open Text Corp., a knowledge management and collaboration software vendor in Waterloo, Ontario.

Dan Eldridge of Amersham Biosciences

The vendor bills the software as a "sales readiness tool" that can give salespeople instant access to information about new products, pricing and special promotions, all of which can be critical to sealing a deal and boosting sales.

In August, Kodak deployed Eloquent's software as a means of establishing a central Web-based repository for all product information and collateral marketing materials.

The results so far have been "very positive," Sanford says. But, he adds, "I don't think you can say it increases sales. What it has really done is allow people to get more done and spend more face time with customers as opposed to calling around for information on the phone."

At HP's Nonstop Enterprise Division in Cupertino, Calif., program manager Tom Hill says the Eloquent system has delivered a tenfold return on investment since its deployment in November 2001. One of the system's biggest tests came with the merger of HP and Compaq Computer Corp., when the newly combined company needed to get hundreds of salespeople up to speed very quickly on an expanded product line.

"The business problem was real simple. Before the merger was finalized on May 7, we couldn't do any [product] training of salespeople prior to that date," Hill explains. "We also didn't have travel money to spend."

Instead, all of the Compaq product information, complete with technical manuals, graphics, video and audio, was loaded into the Eloquent system running on a Compaq/HP server, which was then accessible simultaneously via the Web to HP's salespeople around the globe.

Hill says HP is in the process of "closing the loop on sales readiness" by tapping the Eloquent software's capability to track and report on how frequently people actually use the system and to measure what they learn from it. For example, Hill says he can provide a sales manager in California with information on how a sales and support engineer in El Salvador performs on an online test about a particular product. "We're finally taking learning content and integrating it with sales," Hill says. "When we have additional product lines and salespeople, it will probably add up to a ten- to twentyfold ROI on the system."

At $1 billion Amersham Biosciences Corp., the business issue wasn't getting information to salespeople, but rather paying them accurately for what they had already sold, says Dan Eldridge, manager of business operations at the Piscataway, N.J.-based company. Again, information silos—in the form of dozens of Microsoft Excel spreadsheets with data downloaded from Oracle Corp. databases—were to blame.

"We were managing incentive compensation for 150 to 160 employees via Excel spreadsheets, which was a very manual process, very labor-intensive and fraught with error," Eldridge says. "Our sales reps had no confidence in our ability to produce accurate sales reports and accurate incentive [payments]. The financial quarter would end, and we'd begin calculating incentives, and then it would take us six weeks to pay. After that, we'd spend the next four weeks putting out fires, making corrections. So we'd spend 12 weeks out of every quarter paying incentives."

The issue came to a head when Amersham named a new president, who spent his first weeks in office getting an earful from disgruntled salespeople.

Eldridge evaluated payment software from several vendors, including Siebel Systems Inc. and Callidus Software Inc. Ultimately, he opted to deploy Conshohocken, Pa.-based Synygy Inc.'s compensation software under an application service provider model.

Amersham electronically transfers its sales data to Synygy once a week, and compensation payments are calculated and paid on an ongoing basis. Amersham pays Synygy a monthly fee that Eldridge declined to disclose, but he says the ROI has already been positive.

"To calculate ROI, I looked at things like 'shadow accounting,' which is how much time sales reps were spending analyzing their reports for mistakes rather than spending it out in the field selling," Eldridge says. He was also able to reduce his department's head count by one full-time worker.

The bottom line: "We used to spend four weeks after we paid salespeople fixing problems. Now, we don't even spend a week because very few salespeople have problems with their payments," he says.

Fast Facts Overpayment of incentive and sales compensation averages between 3% and 5% of total compensation at most companies. Systems for tracking commissions and bonuses are one of the fastest growing types of software. Incentive management systems will total $1 billion to $1.5 billion by 2005, up from $75 million to $100 million in 2002. Source: Gartner Inc., Stamford, Conn.

Not Your Average Paycheck Salespeople’s pay is based on a combination of ever-shifting factors. This year, for example, 90% of companies will change their sales compensation plans, which typically include the following metrics: Profit Quotas Customer retention Customer satisfaction Team-based measures Product mix Sources: The Alexander Group Inc. and the American Compensation Association

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Sealing the Deal and Collecting Their Due

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• Sealing the Deal and Collecting Their Due

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