Guidelines for Organizing Qualifying Criteria within the Rule Hierarchy

Use the questions and tips in the following sections to organize your qualifying criteria for classification and direct credit rules more effectively.

Define your rules using these tasks:

• Manage Classification Rules in the Compensation Plans work area

• Manage Direct Credit Rules in the Participant Assignments work area

Number of Named Accounts for the Organization

How many named accounts does the organization have?

If sales management say that named accounts make up more than 20 percent of all territory organizations, then they're likely to have incorrectly implemented named accounts. For example, a telecommunication territory includes 50 standard industrial classification (SIC) codes. Implementing a telecommunication credit hierarchy as 20,000 named accounts requires a minimum of 20,000 customer name range qualifier rules. Instead, implement it as a credit hierarchy with 50 SIC code matching rules.

Number of Named Accounts for a Typical Participant

How many named accounts does a typical participant have?

If sales management say that salespeople have over a hundred named accounts, then it's likely they incorrectly implemented a simple rule using named accounts. Investigate how the business derived the set of named accounts. Typically, salespeople don't have the bandwidth to manage more than 100 named accounts and give the proper attention to critical customers.

Qualifying Criteria Fluctuation and Customer Segmentation

Do your qualifying criteria fluctuate in the context of the credit receivers (participants) you assign transactions to? Do they segment, or group, customers periodically based on a dynamic business matching attribute?

It's important to examine the fluctuation of the dynamic matching attribute in the context of the business object you're assigning. For example, the technology industry might first segment customers by customer category, such as automotive, telecommunications, government, and financial services, and those customers maintain their segmentation even when their customer accounts change. In these cases, the recommended practice is to designate customer categorization at a higher level in the rule hierarchy. Then, further divide them into named customer accounts and products using descendant rules.

Customer Account and Geographic Rules

Using customer account rules instead of geographic ones can be an ineffective way to assign a participant's credit in terms of scalability, ease of maintenance, and application performance. It can be more effective to apply rules using a mix of qualifying criteria.

• Country

• Region (state, postal code range)

• Industry

• Channel

• Product family

Example: Segment 20,000 customers by these criteria:

1. Country and region

2. Sales channel

3. Product family

With this structure, classification and credit assignments process quickly because there are only a few or several hundred rules. Assignment performance directly correlates to the number of matching rules. Assignment is slower with 20,000 matching rules than with a few hundred.