Sales Comp Modeling Tool to Optimize Expenses Plus Improve Sales Results

HR Specialty Products & Services Catalogue Executive SummaryA No Frills Distillation of Vendor’s Marketing Collateral

Thomas A FerencePresident & CEO

Human Resources Mining & Distribution CoLocating, Validating and Accelerating HR  Innovation

 Office: 219-662-0201Cell: 630-240-2583Fax: 219-661-0236

e-mail: tference@hrmdco.comWebsite: www.hrmdco.com

Sales Comp Modeling Tool to Optimize Expenses Plus Improve Sales Results

• Sales puts together the annual Sales Plan / Revenue Forecast and Finance assembles the budget but there is no science applied to determine whether the budgeted expenditures will actually produce the desired net income results

• This LEAN principles-based sales compensation modeling tool ties BU-level general ledger expense items to sales compensation and P&L forecasts

• The system creates an optimized expense model for all sales related expenses including but not limited to just the sale compensation program component (e.g. it considers marketing support, PDA’s, autos, etc.) so as to improve sales performance and thus, shareholder value

Sales Comp Modeling Tool – Continued

• It tests the veracity of the employer’s current sales comp programs in real time with all or just the desired internal stakeholders being at the table

• The tool models multiple alternative programs as needed by type of sales force so as to optimize compensation and assure hitting net income targets at every level of sales

• This tool typically improves Net Sales Revenue by at least 20%

Current State Analysis

-Green line is current sales plan (which may or may not be optimal)-Red dots show actual results

SALES

COMPE

NSA

TION

PROCESS: Sales revenue is compared to profit & expenses first & then every possible iteration of sales comp programs are tested

EXPENSES:• All expenses input as fixed or variable. • Each is correlated to sales • And a desired net income is entered.

REVENUE: • And production per sales rep is input • and continually updated.

Each Sales Rep is an individual P&L entity

FORMULA FOR SUCCESS:

Design Any Plan You Like

“Charge-backs” are those fixed other expenses that sales people might receive

This box shows the results of the changes being made.When it flashes “red”, the desired net income is not being achieved.

Split schedule is the many different ways to set quotas and percentages paid.

Plan and Amount Types are the different types and timings of variable compensations

The software does find the perfect quotas and percentages to be paid.

This box is NOT flashing Red. The desired profit is reached.

The software ALWAYS protects the company profit.

Net Income is always protected

A PICTURE IS WORTH A THOUSAND WORDS

See the results of your plan designs in low to high sales levels.

Plot any lines that you want.

See your break even points and profit points.

Next Steps• This product/service is contained in the HR Specialty

Products & Services Catalogue™ • Operational level details about this particular service

provider can be obtained in conference with the vendor• The HR Mining &Distribution Co. is an independent and

contracted representative of the vendor• Upon your request, we will arrange for an introduction

that can range from a simple, quick conference call to a services overview / system demo

• Tom Ference 219-662-0201 (Chicagoland area) or tference@hrmdco.com

• Thank you for your potential interest in this fresh thinking