While Corpay had seen tremendous growth in inbound/digital sales results, the inbound leads team had a static conversion rate that wasn’t hitting revenue targets. Corpay went through a series of steps to improve these issues. It identified key gaps that could be solved with technology. A lead routing and scoring tool was implemented to move leads with the highest likelihood to close to the front of the queue, and a sales cadence tool was added to engage buyers that had the highest probability of success. A duplicate detection tool was also implemented that reduced the number of duplicates a seller had to sort through to find an active lead. Yet despite these process and technology changes, performance hadn’t improved enough.
Further analysis showed that compensation plans weren’t aligned to desired outcomes, meaning sellers used less efficient approaches because it led to better compensation. Corpay analyzed the inbound lead team’s performance and determined that sales compensation was the primary reason for their lack of improvement. It identified four issues:
Misaligned compensation plans. The compensation mechanics built into Corpay’s legacy compensation plans weren’t aligned with revenue generation because of the gap between what generates revenue and how sellers are paid.
The plan couldn’t adapt to market changes. Fuel cards, the sales team’s primary product offering, depend on macroeconomic factors that have extreme swings in demand based on fuel prices.
Sellers didn’t have visibility on how they were performing. The measures in the plan were difficult to understand and lacked reporting for showing performance compared to quotas.
Organizational structure made it hard to create plans. The responsibilities of inside sellers weren’t aligned to what the teams could control, leading to complex, hard-to-understand plans that were misaligned with roles.
Corpay realized that if it wanted to achieve the benefits of its process changes, then changing its compensation plans was needed. To affect the outcome, Corpay redesigned its compensation plan to align with desired business goals by:
Identifying the best measure. While revenue was the goal, the measure that most closely aligned to revenue growth for the leads team was converted leads.
Moving to quarterly quotas. Attainment data showed annual quotas weren’t working because of the highly cyclical nature of the fuel card business. Transitioning to quarterly quotas allowed the company to account for market dynamics and set more accurate quotas.
Implementing new mechanics. Another challenge with the compensation plan was the lack of urgency to close sales at the end of a month or quarter. Legacy plan structures didn’t motivate sellers to push hard to maximize sales at the end of each month. Therefore, a unit-based/tiered method was introduced to incentivize maximizing each month’s revenue.
Realigning focus to the best opportunities. The legacy plan incentivized sellers to continue to chase old leads despite low close rates compared to new leads. This measure was removed to focus on leads that gave sellers the best chance of maximizing in-month goals.
The new compensation plan led to the lead conversion rate improving 40%–50%, resulting in additional multimillions in incremental annual revenue per year.
Compensation isn’t the solution to every sales challenge. It can become a problem if companies try to use it to solve the wrong problems. When applied in the right way, however, it has a significant impact. Want to learn more about how we help clients optimize their compensation challenges? Reach out to Forrester.
