So you’ve decided to upgrade your commission plan. This should include dedicated software for calculating commissions, and in which case, you have plenty to choose from. The tricky part is deciding which vendor gives you the best return on your investment. 

Now, we can’t make this decision for you. We’re unashamedly biased, so as much as we’d love to have you onboard, we recommend researching the market before making a decision. Then you’ll know you’ve made an informed choice and not an impulsive one.

However, we can make the decision easier for you. We’re an open book here at Spiff and use our own data to offer unique insights for you. One example is the approximate return on using Spiff instead of clunky, error-prone alternatives like Excel. 

I’ll describe how we calculate this ROI and also link to a calculator where you can adjust the variables to obtain a more accurate number. Feel free to skip straight to that if you’re in a hurry. Otherwise, read on as we break down the money-saving effect of switching to Spiff. 

Time lost is money lost

“Remember that time is money.

Advice to a Young Tradesman, Benjamin Franklin

I’m guessing your sales team are either,

  1. Calculating commissions on a spreadsheet (potentially twice – their own and on a shared team document),

or

  1. Calculating commissions on clunky, expensive software.

In both cases, they’re wasting time. They’re not selling, they’re doing admin. Time lost is money lost – you pay your reps to sell, not stress about their compensation. 

Think of all the errors, duplications, and arguments with Finance. How much did that wasted time cost you? 

Our clients’ reps check their commission statements 2-3 times per week. 20% check their commissions 5 or more times per week. If a rep takes 15 minutes to calculate commissions on their own, they could save 30-45 minutes per week doing it on Spiff. Based on a 40-hour week, that equates to roughly 1.5% of their availability.

That might not sound a lot, but it adds up. How many calls, meetings, or emails might your best reps manage in 45 minutes? How many relationships might they start? 

In the long run, spreadsheets are terrible commission calculators. Every new product, territory, or employee, introduces another layer of complexity. Errors are common and require the mastery of one or two individuals to fix – and what happens when they leave? 

You might be thinking, “Okay then, I’ll just build my own commission software.” That’s commendable but expensive. Are your software engineers commission experts? Wouldn’t you rather they focus on your product or service? And once you’ve built your own software, who’ll maintain it? Who’ll fix bugs, develop, and improve it?

You get all that (and more) built into your Spiff subscription plan. A plan that costs our clients approximately 0.5% of the total commissions they pay their reps. If you’re freeing up 1.5% of your reps week by switching to Spiff, you’ve already tripled your return on investment

The consequences of a broken compass

Your commission plan is, in many ways, a compass. It offers your sales reps direction, motivation, and security. If it functions properly, it’ll lead to better performance. But just as a broken compass leads to confusion and aimlessness, so does a faulty sales plan result in demotivation and a hit to your bottom line. 

Picture this: your sales rep walks into work and logs into their computer. Within a few seconds, they know how many sales they’ve made, how much commission they’re due, and how close they are to hitting their targets. They sip their coffee and walk out to their next sales meeting, commission plan in pocket, ready and eager to close deals on your behalf. This is the reality when your reps use Spiff. 

Now, contrast this with a rep who’s forced to use a spreadsheet. They don’t trust the company numbers, so keep their own records. After copious double-keying, the figures don’t match. They’re further off their targets than thought, earning less commission, so spend 15 minutes trying to reconcile the numbers. In the end, they give up and trudge out of the office, exasperated, dreading yet another debate with Finance on their return. 

Assuming both reps were to meet the same client that day, who’s more likely to close the sale? 

According to a 2013 report from Gallup, unhappy employees cost the US an average $450-$550 billion in lost productivity every year. Motivation is key to performance, and happiness drives motivation. If your employees don’t have the right tools for their job, their happiness suffers and you lose money, so give them the best tools. Give them Spiff. 

Calculate your ROI using Spiff

As promised, here’s the calculator to determine your return on investing in Spiff. 

As you’ll see, it’s quite involved. I recommend getting in touch so we can walk you through it. No obligation – it’s just good to talk it through so you get an accurate result. After all, your success is what gets us up in the morning, so anything we can do to help you achieve that, even if, ultimately, you go elsewhere, is still a bonus for us. 

If I’ve done my job right, you might not even need the calculator. Just knowing the difference Spiff can make to your sales teams’ success might be enough. Or at the very least, I hope it’s got you thinking about ditching spreadsheets in favor of something more sophisticated and purpose-built. 

Wherever you end up after reading this blog, remember this: compensation is important, but how you compensate is even more so. You can pay sky-high commissions but such extrinsic motivations rarely have the intended effect. Worse, it can have the opposite one. What you want is to induce intrinsic motivations in your sales teams. Make your employees love their jobs. And a great place to start is ensuring they have the best tools to do them.