1184 - A Better Sales Compensation Model with Forma.ai's Nabeil Alazzam

May 4, 2022

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In this episode of the Thoughtful Entrepreneur, your host Josh Elledge talks to the CEO and founder of Forma.ai, Nabeil Alazzam.

Forma.ai changes the way large organizations pay and motivate their sales teams. There are 50 million sales representatives across North America that are paid on a variable compensation structure. How they’re paid is based on how well they do. Poorly managed compensation is one of the biggest pain points in this space right now. Forma.ai not only automates the payout process for these incentives, but they leverage AI to curate the best incentive structures to drive the right behaviors and ultimately raise the whole company’s top line.

But how do payout disputes even happen? Nabeil explains that in sales, because it’s dynamic, it’s calculated using business rules. If you consider the flux of an organization, sales compensation isn’t static. Enterprises have to individually calculate what to pay each of their sales reps and you have to be able to transparently iterate this to your rep. Nabeil says that software development has paved the way to fix this issue through the form of automation. The problem is that there isn’t yet data to show what really incentives sales teams. Not enough businesses actually look at this data and pivot their compensation model. This is one of many things that Forma.ai seeks to shine light on in the niche focus that is sales rep compensation.

There are a few issues Nabeil shares that he’s seen in his space. He shares ultimately, some of these enterprises aren’t properly paying for performance. The ideal compensation structure should see your top performers getting paid 2 to 3 times the average. If a handful of sales reps are the revenue engine of your business, pay them generously; you don't want them seeking out your competitors. You have to pay for performance. On the other hand, you can’t overpay underperformers. If you pay more for your best performers and don’t keep on those that underperform, what you spend won’t change, your money will just be better spent. This is the model Forma.ai follows.

Businesses require agility and stay on top of trends to future proof. Looking at your sales compensation model is a crucial piece of looking at your business on a fundamental and operational level. Assess your business, leverage data to be more agile, and pay properly for performance.

Want to learn more? Check out Formai.ai’ website at https://www.forma.ai/.

Check out Forma.ai on LinkedIn at https://www.linkedin.com/company/forma-ai/.

Check out Nabeil Alazzam on LinkedIn at https://www.linkedin.com/in/nabeilalazzam/.

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