I’m going to do it… I’m starting with a sports reference. The more I dive into how to motivate different groups within the organization, the more it feels like a golf swing. There are fundamentals and things you should and shouldn’t do, but past those few small things, it’s all about making it work for you to get the results you want. This concept is especially true when you are creating a compensation plan for sales engineers.
Over the last three years, I haven’t done much else besides study, consult, and help build out commission structures for sales, whether that be for friends, clients, or our own internal team.
In this article, I would like to share what I have learned about creating a compensation plan for your sales engineers and how you can help turn this team into a huge part of the foundation your rocket ship uses to take off.
Before we dive into the fundamentals, I want to highlight some aspects of the sales engineering role that make it inherently difficult to compensate. And I’d like to note that in no way is managing, motivating, and compensating sales engineers an easy task.
1. Sales engineers bridge so many gaps and sit between everyone.
Think about it: You want sales engineers to be knowledgeable of the product/service like an engineer, forward thinking like a product manager, and be able to sell like an AE. In my humble opinion, being a sales engineer means you are one of the most versatile tools in the market. The problem is figuring out how to build a compensation plan that drives these behaviors and keeps job satisfaction up.
2. Sales engineers are the running back and the AE is the quarterback.
(Sorry, another sports reference.) AEs get most of the glory and generally more money, even when the sales engineer ends up putting more work into an opportunity. The main difference is that the AE is completely judged off of their wins and losses, where the sales engineer can still shine as a top performer, regardless of their win rate.
3. Being a versatile sales engineer comes at a cost.
Sales engineers generally love the fact that they don’t do the same thing day in and day out, which is one of the huge benefits of the role. But what happens next? Sales engineers often struggle to make lateral moves in organizations because they are good at so many things, but because they aren’t specialized, making a move often includes a pay cut.
Motivating Sales Engineers
Let’s talk first about what sales engineers care about, how to motivate them, and how to create a great work environment that drives job satisfaction.
1. Focus on what the sales engineer can control
It’s easy to get caught up in win/loss ratios and revenue tied to that specific sales engineer. Both of these metrics are important, but in no way does the sales engineer have direct control over those outcomes.
These sales commission metrics should be part of the conversation, but what you should be focusing on are things like time management, relationships, SLAs, and other things that sales engineers can control. If you focus on what they can actually execute on you’ll see an increase in their ability to contribute to some of those KPIs that aren’t fully in their control
2. Mix up the sales engineer’s workload
Sales engineers come from many different backgrounds, but generally, something they all have in common is they like a change of scenery. Come up with side projects, unique tasks, team roles, etc. that allow your team to flex some of their other muscles and mix it up. There is a reason your SE isn’t an engineer, AE, or CSM, so help them embrace it.
3. Build a culture of learning
Similar to the previous point, encourage your team to learn new things. Facilitate opportunities for them to shadow different departments, sign up for different courses or training, and engage them in career development conversations. A sales engineer who is learning and growing is generally pretty happy and excited about what they are doing.
Creating a Compensation Plan for Sales Engineers
Now that you understand more about how to motivate the team, let’s talk through a few different ways you can tie that into how you compensate them. Even though sales engineers love the engineering part of their title, they wouldn’t be here if it wasn’t for the “sales” that prefixes it. Sales engineers like money too, so how do you do it right?
1. Create a compensation plan for sales engineers that is simple and visible.
This is a pretty universal concept, but keep it simple enough that your SEs understand what they are earning and how they can earn more. Because of the uniqueness of their role, their compensation often gets very complicated and tied into many different parts of the business.
2. Create a compensation plan for sales engineers with a higher base and lower variable.
Your sales engineers should have a compensation structure that is somewhere between a 60/40 and 80/20 split when it comes to base/variable. At Spiff, we have most of our team sitting at about 75/25, but we do set their compensation plan up in a way that they can essentially earn anywhere from from 75/25 to 75/50 (yes I know that math doesn’t make a ton of sense).
3. Tie the majority of sales engineering KPIs to company or team achievements and quotas, not just who they work with.
If you want to promote a healthy culture and relationship between your AEs and sales engineers you’ll want to make sure that your SE’s success isn’t directly tied to just one individual or a small group of people.
Let’s look at an example: A sales engineer could be a rockstar but if the team they support all goes on vacation, they will get penalized. Here at Spiff we tie everything to the company number and then tie sales accelerators to the close rate of the opportunities they participate in.
This also promotes a better sense of unity among the sales engineering team, as someone is more likely to step in and help out when they are all focussed on the same goal.
4. Leverage management-based objectives (MBOs) as part of your compensation plan.
MBOs are a great way to give your sales engineers complete control over a portion of their variable comp. These can be anything and are generally more effective if they are set on an individual basis.
We split our sales engineers variable comp 70/30 with the 70 being tied to the company achieving new revenue goals and the 30 being tied to MBO’s. A few MBO’s that we use consistently include time management, e-learning courses, special projects, and training specifically targeted to help them improve where they are lacking.
I wanted to end on something I am extremely passionate about: Your sales engineering team can be the ultimate 1-2 punch if managed and motivated correctly. More than ever, people buy from people and no one is better than relating to your prospects than a good sales engineer.
I also am pretty convinced that there aren’t too many other jobs out there that would rank higher on the potential for burnout. Keeping your team happy and motivated will allow you to take that 1-2 punch to the next level and add incremental value to your organization.
Choose Spiff to Power Your Compensation Plan for Sales Engineers
Spiff is a leading sales commission software that automates commission calculations and motivates teams to drive top-line growth. With a combination of an intuitive UI, real-time visibility, and seamless integrations into current systems, Spiff is the first choice among high-growth businesses. The platform enables finance and sales operations teams to self-manage complex incentive compensation plans and provides transparency for sales teams. See Spiff in action! Schedule your demo today.