For years, companies have known that how they compensate their sales teams directly impacts business performance. To quote from Jack Welch, former chairman and CEO of GE: “Show me a company’s various compensation plans, and I’ll show you how its employees behave.” The right sales plans can motivate selling behavior to increase profits, control expenses, and drive consistent quarter-over-quarter results.
For most companies, however, the cost of traditional enterprise applications to automate this function was out of reach. According to Xactly Corporation founder and CEO Christopher Cabrera, the incentive sales process in nearly 90 percent of companies was “still managed by manual, spreadsheet-driven processes that breed errors and disputes, don't cost-effectively scale, can't easily accommodate plan changes and additions, and ultimately don't align sales behaviors with corporate goals to effectively drive profits.”
Early in his career, while head of operations at a large software company, Cabrera had found himself time and again forced to walk away from sales opportunities because the mid-market-sized company he was working for simply couldn’t afford the initial costs and ongoing maintenance of an enterprise sales incentive compensation application.
Around this time, an on-demand software delivery model was starting to gain
noticeable traction. Despite Cabrera’s evangelizing this concept, his company balked at using an on-demand offering. Cabrera left that company and went on to launch Xactly in March 2005.
A Simple Idea
Cabrera’s idea was to take a complicated and challenging function—managing sales compensation—and automate it to become a simple and cost-effective solution for the huge and underserved mid-market. His company, Xactly, has done exactly that, and has been instrumental in radically opening up the market.
By 2007, Xactly had signed 100 customers. The company was managing more compensation, and more compensation complexity, than any other on-demand vendor today. Xactly software was helping its customers to manage nearly $1 billion in sales compensation annually.
Sales Performance Management
In 2008, Xactly moved into a much larger emerging-market category called Sales Performance Management (SPM). In 2006, Gartner had predicted that “a sales performance management market will coalesce around best-of-breed vendors largely originating from the sales incentive compensation management market.”
Xactly’s compelling value proposition for potential customers, said Cabrera, was that “the convergence of SPM and on-demand SaaS delivery has created a new, affordable way to improve sales effectiveness. We let companies automate and integrate strategic sales and finance business processes, and let individuals, from sales reps to top management, make better, more informed and timely decisions.
“In the on-demand world, the customer holds all the cards and can kick an on-demand vendor out of the game at any time. Hence we're driven by the notion that each customer's business must be earned anew every day. Xactly's over 90 percent customer-renewal rate is, we think, testament to our culture.”
Building upon its leadership in on-demand Sales Compensation Management (SCM) software, Xactly was the first vendor to deliver in this market.
Stellar Results in Uncertain Times
In spite of the downturn, Xactly continued to deliver stellar business results in both 2009 and 2010. At the same time, the company increased year-over-year revenues by more than 50 percent , and grew its customer base by more than 60 percent—including a sharp increase in international customers.
The company’s success is due in part to its strong customer-centric culture and ability to help customers turn sales into a strategic competitive weapon. With both excellence in service and solutions—Xactly Incent™ and Xactly Express™—Xactly has maintained a renewal rate of more than 90 percent over the past three years. In addition, more than a third of the company’s customers added additional subscribers or modules.
According to Cabrera: “Incenting the right sales behavior has never been more important. The value of automating compensation and incenting right in order to improve sales results was evident throughout our customer base, as our projects consistently made it to the top of the ROI stack.”
Customer Joe Dawe, Senior Director of Business Operations at Akamai, also added, “Xactly Incent delivers incredibly rich information for making strategic and tactical decisions around our global sales compensation and performance. It has removed a significant distraction for finance and sales, lets us focus on
other business challenges, and enables us to more effectively address our market.”
On the partner front, Xactly has a close association with salesforce.com, which recently made a strategic investment in Xactly. In addition, Xactly continued its strong relationship with Oracle as a member of its CRM On Demand Inner Circle, an elite group of key partners forming an integrated ecosystem of complimentary solutions offering extended value to Oracle CRM On Demand customers.
The Workforce Behind the Success
Cabrera is justifiably proud of his company, but is most proud of the workforce behind its success. Xactly remains committed to providing a positive work environment and giving back to local communities, under the umbrella of the Xactly One™ program. Xactly employees have participated in building houses for a local Habitat for Humanity, orchestrated a food drive for Feeding America, partaken in the American Cancer Society's Daffodil Days Campaign, and much more.
About Christopher Cabrera
Christopher Cabrera has more than two decades of senior management experience at both early-stage and public companies. At these companies, he managed sales, operations, and business development. Cabrera is a noted expert in issues relating to sales performance management and enterprise and SaaS delivery models. Prior to founding Xactly, Cabrera was SVP of operations for Callidus Software and served as director of North American channel sales at Silicon Graphics.
Xactly Corporation is the market leader in on-demand sales performance management. The company’s SPM Suite of products enables sales and finance executives to design, implement, manage, audit, and optimize sales compensation management programs easily and affordably. Xactly’s solutions automate the process of aggregating data from disparate systems into a secure, hosted repository and enable companies to leverage this business data, which is the lifeblood of sales performance management. Xactly helps companies improve operational performance, optimize sales effectiveness, proactively manage risk and compliance, and maximize profits. The Xactly family of products is used by sales and finance executives, compensation analysts, sales operations, and sales professionals across a variety of industries ranging from SMBs to large enterprises. For more information go to www.xactlycorp.com.