Driving Sales Behavior Through Compensation Plan Mike Eberhard EVP, Sales & Business Development Concur Technologies September 11 th, 2009

Goals of Comp Plans Vary Recruiting: Optics- base, OTE, over-perform Retention: Optics of success & earnings Behavior: –To sell consistently –To push beyond goal achievement –To sell certain products (new, margin, strategic) –To support a team sell environment –To sell right solutions to right customers –To negotiate proper terms and conditions –Others? Concur has had both success & failure driving the above behaviors and today appears to be incentivizing to our objectives.

What has Proven to Drive Behavior? 1. Quota = Success, Recognition 2. Money Over & over again reps demonstrate that quota credit is more important than money Quota $

Keys to Comp Plan Levers Best if built into the plan from the start –CFO proof if built this way Balances both sales credit & commissions Can be managed by Accounting

Examples

Behaviors & Proven Levers Consistency: avoid the annual hockey stick or major roller coaster –Best we have found is quarterly YTD bonuses –In mid-market it is monthly Over-achievement: getting even more drive once their quota is met –We pay accelerators once they have achieved annual goal, higher if hit 150%

Behaviors & Proven Levers Certain Product: get them to ask questions in discovery and position a specific product –Best we have found is a joint quota & commission kicker –Build it in from a product revenue plan*

Behaviors & Proven Levers Team Selling: get reps on different teams selling together, get all members on same page –For global deals with multiple teams, they apply for an receive more than a 50/50 split, i.e. 70/70 –Team quotas & commission for small teams driving customer revenue Right solution to right customer –We recover commissions if the customer refuses to pay or terminates within the first year

Behaviors & Proven Levers Negotiating Proper Terms: ensure reps negotiate to the right Ts&Cs –Delay commission on delayed payment terms –Average the sale value if it ramps as oppose to starting at full value –We pay commissions on setup but no quota credit. The balance protects excessive discounting while preserving the most important revenue source (recurring revenue for us)