If Coffee Is for Closers, Xactly Wants to Be the Caffeine

By Whitney Phaneuf , written on August 17, 2012

From The News Desk

A few years back I foolishly agreed to help a friend create a PowerPoint to motivate his startup's sales team. He wanted to add a video clip of the scene from "Glengarry Glen Ross" when Alec Baldwin gives his ABCs of selling speech. My friend meant no irony, no nod to David Mamet's masterful script about capitalism and cruelty, he meant it to convey "you close or you hit the bricks." Xactly doesn't need PowerPoint, because it's got something far more powerful: leaderboards.

Xactly's software helps sales teams manage commissions and performance within Salesforce and other customer relationship management (CRM) tools. Using that data, Xactly added features inspired by behavioral science to keep teams motivated. Xactly "games" its own sales reps, ranking them by sales numbers and displaying the list on a big screen in its San Jose headquarters and Denver sales office.

"Trust me, you’ll change the sales team behavior, because they don’t want to be at the bottom of the list," says CEO Chris Cabrera.

Cabrera realized he was on to something when Xactly got sales reps addicted to its "Show Me the Money" button, which calculates the size of a check if they closes a deal. From there, they added a way for management to easily tailor "SPIFS" to what motivates their team. Back when I made that PowerPoint, I had to Google "SPIFS." It stands for "Sales Promotion Incentive Fund", and it's basically a selling bonus, anything from cash to an iPad.

When Xactly launched in 2005, they had to figure out what carrots worked best for the new, digital sales team. Cabrera says companies have shifted away from paying sales reps in suits to drive around for meet-and-greets, and today an internal team uses the phone and Internet to connect with prospects.

Xactly initially focused on small-to-medium size companies and those still account for half of its 500 customers. Cabrera says startups with sales teams as small as two reps at a minimum need a CRM tool and lead scoring software.

Because finding the right lead can take talking to five or ten people, his team in Denver uses a third-party service to makes the initial calls. Once they find the right contact, they dial the number and instantly conference in an Xactly sales rep who takes over, as if he made the call.

I recently chatted with Hattery partner and founder Luis Arbulu who told me talented sales people were the No. 1 need for startups right now. And this is coming from a hard core product guy who started Hattery to fund and arm startups with UX and design.

Xactly's success may be a testament to the necessity for innovations in sales -- it has raised $72 million from investors, including Salesforce, and is on track to IPO next year.