Xactly takes aim on the lower end of the sophistication slope

By Chris Bucholtz

CRM is critically important to businesses as they grow. I think we can all agree on that. But is it all there is to your customer-facing business software ecosystem?

Like most things, the correct answer is “it depends,” which is a totally accurate and yet fully unsatisfying response. It depends on your business and where you are in what you might call the sophistication slope. If you’re a smaller business and at the bottom of the slope, you may be at the stage when CRM by itself is providing a ton of benefits and revealing new ways to run your sales and marketing operations better.

But, as you grow, you may find areas where your sales department could benefit from a boost: lead management, territory management, alerting, sales intelligence and a host of other specific aspects of sales. Luckily, software companies are out there identifying these as issues, too, and the result is that we’re in something of a renaissance when it comes to sales management software.

Companies farther up the sophistication slope will identify these needs and plug applications into their systems as needed. Ideally.

The thing is, the sophistication slope doesn’t map to company size. Some fairly large companies get by with a level of relative unsophistication because of what they do; some rather small companies can be very sophisticated for the same reason.

Which is why what is ideal is not always possible. Larger companies have the assets to understand where they need new software, but smaller companies may lack those assets. Indeed, at many small companies, the jump to CRM is an arduous one all on its own – and when these complementary software tools are designed for enterprise users, it may be too much of a leap for a smaller business to make.

That’s why I was really pleased to hear from Xactly about its Express product release at the company’s show two weeks ago. It’s targeted at SMB users, and provides them with a simplified take on Xactly’s flagship product’s sales compensation management application. That helps Xactly position itself lower on the sophistication slope – a goal that CEO Chris Cabrera says was at the heart of the product.

“There are a lot of businesses that find they can use this technology – really, anyone doing commission-based selling can,” said Cabrera. “We want to get to the smaller users earlier.”

Xactly has always been delivered as SaaS, making it a natural in the SMB market. The next step was to understand what the SMB market really needed. “The complexity missing from Express encompasses aspects that we found SMB users didn’t need,” Cabrera said. Just as with CRM, newcomers to the technology are likely to focus initially on features that solve their immediate problems. For Xactly, that means essential compensation and bonus management and export of compensation data to payroll. As in Xactly’s other products, sales pros can go into the application and gain an understanding of how sales benefit them – for example, the impact on commission of a three-year deal vs. a two-year deal for a subscription-style product. If the compensation plan is created effectively, the salesman will do what is best for his bottom line and that of the company.

The other critical benefit Express brings is related to time to value. “While our past implementations are measured in terms of eight to 12 weeks, Express is more like eight to 12 hours,” said Cabrera.

One of the reasons I like Xactly so much is that, by giving sales people the chance to peek at how much they could make from a sale, you incent them to fully embrace the CRM system. In order for the compensation management application to work, it must be tied into the CRM system; in order for sales people to get a preview of their commission checks, they need to enter their sales data into CRM. In a way, it’s a bit like gamification of sales, in which sales people are motivated to use CRM – except rather than earning virtual badges, sales people earn actual money.

The next step for companies like Xactly, is, I believe, to partner with other vendors that sell pieces of the sales puzzle to create a set of solutions; when a small business learns about one, they can then learn about all the applications that can help them.  That will help these vendors command the attention from SMB users far more readily – regardless of the issue that drives those users, they’ll become aware of other solutions that can amplify the effects of these various applications. Xactly’s in the process of doing this now; more about it when it come to full fruituion.