National Carpet manufactures and distributes synthetic carpet and flooring products internationally. The company experienced rapid growth in the short term, which created more complexity and transactional volume within the sales organization. Agents are awarded commissions based on their ability to sell new product lines and on business volume. Regional VPs are remunerated based on the performance of their teams against predefined quotas.
Greg Halton, Chief Operating Officer of National Carpet, earned his stripes by implementing leading edge management practices to streamline business and operational processes, maximize revenues and tightly control costs. "The competitive nature of our business demands us to focus our selling efforts on our highest margin goods while maintaining a close scrutiny of our operational costs. Sales growth is paramount to our long-range strategy, but at the same time, minimizing our costs keeps us in the game. We can only achieve acceptable cost levels by making our business processes as efficient as possible", Halton stated.
During a comprehensive review of his sales infrastructure, Halton discovered that National Carpet´s existing commission plan system, an Excel-based model, was misaligning certain comp plans with his overall corporate vision. "On a careful analysis of the numbers, it seemed that we had structured an unusually high commission plan for our lower-margin, slow-moving and often obsolete products, and we were not effectively motivating our force to focus on selling higher margin goods through better structured commission plans", Halton said. "The manual and labor intensive process of calculating commissions had in effect blinded us to a startling reality - our commission plans were in dire need of a rework."
As a result of his discovery, Halton decided to take action. He assembled a team to undertake a comprehensive evaluation of the systems and technologies available in the marketplace, and choose the best solution for National Carpet.
"We pretty much looked at everything", stated Jon Hershall, head of Enterprise Solutions for National Carpet. "But when it came down to it, the decision to use Varicent was an easy one. The product presented with a lot of flexibility and ease of use, and the implementation plan that the Varicent consulting team proposed seemed remarkably straightforward. In fact, they were able to demonstrate virtually all of the desired functionality in the sales process."
"For us, Varicent is more than just a ´time-saver´ application. The solution has enabled us to model different commission packages against our targeted objectives. When we started this process, we had defined that requirement as a critical success factor", said Halton. Today, National Carpet uses Varicent to calculate all of its variable-based payment plans and deliver web-based sales reports to the team. The company plans to use the solution for quarterly sales forecasting and long-term sales planning by individual sales representative.
About Varicent
Varicent Software Incorporated is a leading provider of Sales Performance Management (SPM) solutions. Varicent´s flagship product, Varicent SPM, enables organizations across multiple industries to effectively design and mange incentive pay calculations across the company. Varicent SPM is a web-based solution built on Microsoft´s .NET framework, and its patented rules-based calculation engine can manage the most complex compensation plans. Varicent´s homepage is http://www.varicent.com.
