The 2016 CRM Market Leaders: Incentive Management

THE MARKET

Analysts agree that the incentive management category has been morphing of late, steadily heading in the direction of sales performance management. According to Michael Fauscette, chief research officer at G2 Crowd, “half the vendors” that have been recognized for incentive management are “already in [the sales performance management] category, too.” And Jim Dickie, a research fellow at CSO Insights, a division of MHI Global, agrees, noting that “[we’re] seeing this space merge towards the integration of incentive management and sales performance management.” Research from Gartner indicates that the sales performance management market grew by about 10 percent in 2015, thus reaching $715 million in sales. The research house recommended in a report that “IT leaders supporting sales should focus on sales incentive compensation in the short term, but also support use cases for sales enablement and corporate performance management in the midterm.”

THE LEADERS

Callidus Software (CallidusCloud) scored well in direction (3.9); Joe Galvin, an independent business analyst, calls this vendor the “market leader” and adds that it takes sales performance management “beyond compensation.” In August 2015, CallidusCloud released its SPM Quick-Start package, which serves as a beginning point for companies that wish to monitor and improve performance across their teams—the move helps account for its high mark in functionality (4.0). At the time of the launch, Jimmy Duan, CallidusCloud’s executive vice president and chief technology officer, said in a statement that the solution “delivers coaching in a modern, slick new mobile-centric user interface and offers an efficient way to streamline hundreds of coaching interactions across your entire sales organization, making coaching consistent, repeatable, and measurable.”

NICE Systems maintains its spot on the leaderboard despite posting a low score for direction (3.3). Dickie notes that it is “facing cost headwinds in terms of gaining on” the market leaders. The company did score well in functionality (3.8). Galvin notes that the vendor “continues to seek consistent market position.” Indeed, in May, NICE Systems announced plans to acquire inContact for $940 million, a move lauded by Donna Fluss, founder and president of DMG Consulting, as one that made “a lot of sense.”

Xactly has a reputation for strong functionality (4.1) and customer satisfaction (4.0), and is held back from the top spot largely on account of its score for annual revenue, which remains significantly lower than IBM’s. Dickie, in fact, calls Xactly’s offering the “best overall solution” for small to large enterprises. The company, Dickie adds, is “headed in the right direction in sales performance management.” And in Galvin’s opinion, this vendor is the “top competitor for Callidus.” The company scored among the highest in direction (3.8) as well. Xactly went public in the summer of 2015, which has enabled it to raise funds and continue its expansion.

THE WINNER

IBM’s Varicent clinches the top spot this year, earning high scores for both functionality (3.9) and cost (3.8). Dickie states that the vendor offers the “best-of-breed for very complex incentive management needs.” The company’s revenue stream is what really gives it the push to earn the top spot in this category, placing it above fellow notables CallidusCloud, NICE, and Xactly. 

One to Watch

Vue Software once again hits our radar as the One to Watch, though Dickie points out that it is not a broad market player. Still, he notes, the vendor provides a “solid solution for the insurance industry,” which proves to be a big enough one to merit attention. As it did last year, Vue posted a respectable score for cost (3.7), but it has begun to struggle with direction (3.0).

[Editor's note: The original version of this article included the company Synygy as one of the Incentive Management category leaders. After shipping the August 2016 issue, we learned that Synygy has quietly closed it doors. Therefore, we have removed the company from this article and the accompanying chart.]

---

---