Supercharge Sales Results by Optimizing Quotas, Territories, and Incentives

Robert Youngjohns, CEO

Paul Turner, Product Marketing

Sales: Million Dollar Producer

Safe Harbor Statement

“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements including but not limited to statements concerning the potential market for our existing service offerings and future offerings. All of our forward looking statements involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.

The risks and uncertainties referred to above include - but are not limited to - risks associated with possible fluctuations in our operating results and cash flows, rate of growth and anticipated revenue run rate, errors, interruptions or delays in our service or our Web hosting, our new business model, our history of operating losses, the possibility that we will not remain profitable, breach of our security measures, the emerging market in which we operate, our relatively limited operating history, our ability to hire, retain and motivate our employees and manage our growth, competition, our ability to continue to release and gain customer acceptance of new and improved versions of our service, customer and partner acceptance of the AppExchange, successful customer deployment and utilization of our services, unanticipated changes in our effective tax rate, fluctuations in the number of shares outstanding, the price of such shares, foreign currency exchange rates and interest rates.

Further information on these and other factors that could affect our financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time. These documents are available on the SEC Filings section of the Investor Information section of our website at www.salesforce.com/investor. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

All About Callidus Software

Callidus Software, Inc. provides sales performance management (SPM) and

enterprise incentive management (EIM) software systems worldwide

• INDUSTRY: Software

• EMPLOYEES: 350+

• GEOGRAPHY: Global

• # USERS: 1.7million

• PRODUCT(S) USED BY: Sales operations, Finance, Sales team

Agenda

The need for Sales Performance Management

Business challenges

Effective quota setting

Territory optimization

Incentive management

Wrap up

Q&A

How much is your organization losingin “lost opportunity” revenue?

• How does your company manage territories, quotas, incentives and sales reporting and analysis?

• Callidus Sales Performance Management maximizes sales and incentive effectiveness

Why Callidus Sales Performance Management?

“Through 2010, on average, enterprises will miss the equivalent of at least 10 percent of total annual sales in "lost opportunity" revenue that could have been captured with improved processes for defining, assigning and managing territories, quotas, and incentives and compensation plans. 0.8 Probability”

Gartner Presentation, “Exceeding Targets with Sales Performance Management” by Michael Dunne, Sept. 11-13, 2006.

The Need for Sales Performance Management

40 Million Salespeople, $1.5 trillion in spend

Nearly zero visibility for managing the investment

What is your organization’s sales spend?

Is it getting its money’s worth for that investment?

Are your sales incentives and programs producing the desired results?

Do you know when you’ve taken the right action?

Sales Performance Management

• Optimize, Analyze• Improve, Align

• Who are my customers?• How do I allocate them to sales

territories?

• What resources do I have?• What are their capabilities?

• What targets should I set?• How do I get the targets out quickly?

• How do I set motivationalincentive plans?

• How do I change plans quickly as markets and/orproducts change?

Territory

TalentAnalyticsIncentives

Targets

Significant

10+%

5+%

9

StrategicAcceleration

• Drive revenues• Gain competitive advantage

Sales ForceEffectiveness

• Action on analytics• Quota & territory planning

ROI on spend

Three Layers of SPM Value

Incentive Compensation

• Pay fast & accurate• Handle complexity & change

Customer Results Achieved:

Visibility

Planning Execution

Sales and Incentive

Performance

CSAA can now launch a product in 3-6 months vs. 6-9 months

$5M in overpayments eliminated, and more than $15M in increased revenue(Major telecom provider)

Channel RetentionEliminated 80% of Disputes from channel of 25,000 distributors and suppliers.

CUNA Mutual has realized hard dollar savings of $900,000 per year.”

Sales Productivity> 60,000 sales days recouped over 2 years by lowering shadow accounting (Major telecom provider)

“Callidus has enabled us make sound strategic decisions as we are by identifying factors that motivate our sales team”

“We are driving a cultural transformation in our sales organization”

Loan production up 450%

“We can align incentives more closely to our channel objectives.”

Accounts Contacts

Sales Cycle Execution

Prospect Qualify Solution CloseNegotiate

Sales Enablers

Leads Content Config./Quote OrderPropose

Monitoring/Reporting/Analytics

Territory Mgmt.Accounts, Resources,Hierarchies

Quota Mgmt.Revenue &

Margin targets; New business

Sales ICMCommissions,

Bonuses,Accelerators

Sales Performance Management Defined

Sales Performance Management: Going Beyond Incentive CompensationMichael Dunne

Territory and Quota Setting

"Gut feeling" By executive dictate Budgeting Politics Not reflective of

demand

Territory Allocations

Quota Assignments

Opaque Seniority Politics "Gut feeling" Ad hoc Misaligned

Transparent Fact-based Comprehensible Achievable Reflect responsibilities Meaningful

Transparent Logically determined Balanced Equitable Reasonable opportunity Optimize coverage

Quota Setting Business Challenges

Challenge Solution

• Align sales with corporate goals • Derive and communicate top level target

• Set quotas based on business need • Top-down, Bottom-up and Bi-directional

• Utilize different business drivers• Historical Sales, Territory Potential, Growth,

Sales Effectiveness

• Manage and monitor approvals• Hierarchy Level Rules, Workflows

• Communicate Quotas and Attainments • Web or Excel enabled quota setting and

dashboards

• Minimize confusion and ambiguity • Standardized templates and guided workflows

• Integrate with revenue and comp systems

• Integrates with TrueComp and supports multiple data sources

Quota Setting Flexibility Across Multiple Measures

Allocate QuotaUsing MultipleMeasures

Customer Type (New, Existing, Strategic)

Sales Volume

Profit Margin / Price Realization

Product Mix

Multiple Quota-based with Accelerators

Key Strategic Objectives (KSOs/MBOs)

Market Share, Customer Satisfaction

Analyze Attainment, Future Opportunity

Key Takeaways

• Exception highlighting show underperformance and over performance areas

Identify seasonal trends in accounts

Plan Quotas Against Sales Goal

Key Takeaways

• Uplift or downlift quotas, or bring forward existing quotas and add weightings or seasonality to them

• Compare scenarios side by side and select the best one

• Centralized business rules easy to update, rather than locked away in multiple spreadsheets etc.

• Have multiple targets based on optimizing product mix, account performance etc..

Adjust Quotas and Add Audit Trail

Key Takeaways

• Provides immediate feedback on what-if scenarios

• Can be performed in the Web or Excel client

• Can be performed in off line mode for traveling sales manager

• Can add supporting detail for to any change to ensure a change log its kept

• Greg is able to adjust his current targets for his teams accounts, and uplift them. For example, he has uplifted Finance Bank New York by 25%, and Comp Shop Texas by 20%, given last years over attainment. He can immediately see the impact on the overall target, and how it is closing the gap against the management target25,572

324,565

12,878

Reconcile Against Sales Goals

Key Takeaways

• Identify key variances against top level goal• Re model and create new scenarios as necessary

Major realignments• Creation, expansion or reduction of sales force• New product mix, new target, new indication• New competition• Mergers, consolidations

On-going maintenance• Align to new business conditions as reflected in data

updates• New customer acquisition• Personnel situations• Territory management

“What-if” analyses• Different strategy• Plan variations

Situations that Require Territory Realignment

Efficient Territory Optimization

Key Takeaways

• Leverage any metric or attribute to create balanced territories

• Territories can be account based or area based, a combination of both; i.e.. Rep A has all the ‘red’ zip codes with the exception of one named account

• Users can view accounts, territories centers, values of areas, highways, etc… to design the most effective territories

Key Takeaways

• “What-if” modeling – Users can simultaneously view several possible solutions for comparison

Model and Balance Territories Based on Key Drivers

Users have the ability to dial-in the relative importance of territory balance, geographic compactness and level of disruption when evaluating optimized scenarios.

Brand Management

Motivating and Rewarding People

Customer ServiceTurning Customer Info into Insight

Attracting and Retaining PeopleBuilding Selling and Service Skills

Strong Value PropositionsPartner and Alliance Management

eCRMSales Planning

Key Account ManagementAdvertising

Customer Retention and AcquisitionManaging Product and Service Mix

PromotionAbility to Change the organization

New Products and Services

SegmentationBuilding Service Culture

Channel Management

Incentives Drive Financial Performance

¹ Accenture CRM Research

Potential Dollar Impact in $M on Pre-tax Profit of Moving from Average to High Performance for $1Bn Business Unit

- Accenture CRM research1.5

13.013.0

12.010.0

9.59.0

9.08.0

7.5

6.05.5

5.0

3.5

2.52.0

3.0

5.05.0

Pay for Performance from Everyday Dashboard

Detail to Reduce Shadow Accounting

Gain Summary View of Sales Performance, Incentive Opportunities

Monitor Key Metrics

Monitor Team Performance, Opportunities to Change Behavior

Leading Enterprises are Integrating SPM solutions

Insurance

Banking

Telecom

High Technology

Life Sciences

Continued Integration with salesforce.com to Drive Customer Value

“As a customer of both Callidus Software and salesforce.com, we are pleased that the two solutions are becoming more fully integrated. With this integration, our sales representatives and sales executives will be able to view strategic sales force automation and sales performance management information together .”

John Graham Executive Vice President Global Sales and Services at UGS

PLM Software, a division of Siemens Automation and Drives.

Summary: Why Callidus On-Demand SPM?

Flexible• <60 days to go live• Make changes any time

Scalable• Proven multi-tenant grid processing for scalable

performance Reliable

• 99.5+% availability exceeds industry standard SLA’s Safe

• Type II SAS 70 certified• Safe Harbor certified

Sales Performance Management Leadership

Most deployed solution• Used by over 1.7 million sales professionals globally

Unmatched breadth• Plan spend, quotas, and territories• Execute timely and cost effective incentives• Deliver clear visibility through reporting and analytics

to sales and finance Seamless access from Salesforce

• Deploy to sales organization through everyday

Salesforce application

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