The 2015 CRM Market Leaders: Incentive Management

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THE MARKET

According to new research from industry watcher MarketsandMarkets, total revenue generated from software and services in the sales performance management market is expected to grow from $2.5 billion in 2015 to $5.6 billion by 2020.

Along with that growth, the incentive compensation market is changing, with CRM suite vendors entering the fray, says Rebecca Wettemann, vice president of Nucleus Research. As larger players in CRM software, such as Salesforce.com and Oracle, begin to build more impressive incentive compensation and performance management capabilities into their core suites, incentive management "will likely [become] a space that is an acquisition target, where overall cost and the ability to integrate will be key [differentiators] as it becomes more commoditized," Wettemann says. Denis Pombriant, managing principal of Beagle Research, observes that many of the key vendors in this market "have been either late to the cloud or can't make it on their own and have been bought."

THE LEADERS

This year, Callidus Software launched its Predictive Sales Performance Platform, which aims to connect sales managers in a joint effort to predict future performance by looking at incentives and previous performance. This new tool no doubt contributes to the company's identical high scores in depth of functionality and direction (3.9). It's worth pointing out that the company—along with two recent winners of the category, IBM's Varicent and Xactly—was named one of Gartner's leaders in its Magic Quadrant for Sales Performance Management.

IBM's Varicent fell from the top spot on the leaderboard this year, but it continues to move in the right direction with a highly functional set of products, according to our judges. Still benefiting from the name recognition of its corporate parent, and from IBM Watson's analytics capabilities, Varicent's solution helps sales departments develop closer links with other parts of the enterprise and provides greater data processing tools. Gartner named the company one of the top three in the space, alongside fellow leaders Callidus and Xactly.

Having recently been awarded CRM's Rising Star award for customer service, it should come as no surprise that NICE Systems scored well in customer satisfaction, earning a 3.7 in that category. The company did less well on cost (3.3), a result the company should keep in mind moving forward, if Wettemann's prediction that cost will be a key differentiator holds up. In May, NICE Systems added to its offerings with Employee Engagement Manager, which helps sales managers oversee the performance of sales reps.

Synygy offers high functionality, scoring a 3.9 in that category, but as with NICE Systems, it struggles with cost (3.0). Though it's open for debate whether that trade-off is worth it to sales professionals, Synygy has a reputation for meeting its customers' expectations—it scored a 3.8 in customer satisfaction, second only to category winner Xactly. Its ongoing ties with Salesforce.com, a company that has built its name on meeting customer needs in areas such as product integration and sales performance tools, could have something to do with this.

THE WINNER

Xactly took the top spot from IBM's Varicent this year, posting the highest marks from our analysts in every single category and getting named a leader in the market by Gartner, in its Magic Quadrant for Sales Performance Management. "Xactly has done a solid job of creating a compensation functionality that can be used by any size company to create plans from simple to complex," says Jim Dickie, managing director of CSO Insights, a division of MHI Global. Xactly has been offering strong incentive management products for 10 years, and added a significant piece to its portfolio with Xactly Insights in August of 2014; it enables organizations to measure themselves against industry competitors and develop more accurate plans and turnover rates. Led by CEO Chris Cabrera, the company completed its initial public offering, raising 56.3 million in its June debut. 

ONE TO WATCH

VUE Software may cater to a niche market—the insurance industry—but it maintains its status as a highly usable tool for salespeople within that market. It scored well with our analysts in company direction and cost, with customer satisfaction and functionality trailing not far behind. 



[Editor's note: The overall award rating is based on a composite score of analyst ratings for customer satisfaction, depth of functionality, company direction, and cost. For the cost score, analysts gave the highest marks to vendors with the lowest expected costs. Company revenues were also factored into the overall score, but these numbers are not included in the chart above.] 

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