If you’re currently creating sales comp plans for the new year and are struggling to come up with compensation plans for your sales engineers, you’re not alone. In fact, compensation planning is something many leaders struggle with.
In this guide, we’ll share with you our best tips and advice on how to create sales engineer compensation plans that will motivate your team and increase productivity across your entire organization.
Before we jump into the tactical execution, let’s first look at why sales engineers are more difficult to compensate than other roles:
Sales engineers are a centralized role.
The best sales engineers are technically-minded like an engineer, forward-thinking like a product manager, and have the selling chops of an AE. Being a sales engineer means you are one of the most versatile tools in the market. But this diverse skillset can be a double-edged sword. The nuance of the role makes the sales engineer both important but also difficult to compensate.
Sales engineers are the unsung hero and fly under the radar.
Sometimes, an AE may get most of the glory and generally more money than a sales engineer- even when the sales engineer puts 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. This makes it infinitely more difficult to reward a sales engineer for meaningful activity.
Being versatile can come at a cost.
Sales engineers often choose this role because they’re drawn to the changing nature of the role. No two days look the same. But what happens when a sales engineer decides they’re looking to grow or move upward in an an organization? 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. This can make motivating and incentivizing sales engineers difficult because there is no prescribed growth path.
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 your sales engineer can control
It’s easy to get caught up in win/loss ratios and revenue tied to a specific sales engineer. Both of these metrics are important, but it becomes tricky when it comes to motivating a sales engineer because the sales engineer doesn’t always have direct control over those outcomes.
These sales commission metrics should be part of the conversation, but it’s more important to focus on aspects of the job like time management, relationships, SLAs, and other factors that sales engineers can control. If you focus on factors within your sales engineer’s control, 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 your 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 what they love most about the role.
Doing this will contribute to their engagement and overall happiness in their job.
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 those into how you compensate your sales engineers. Even though sales engineers love the engineering part of their title, they wouldn’t be here if it wasn’t for the “sales” that comes before it. Sales engineers like money too, so how do you compensate this role correctly?
1. Create a compensation plan for sales engineers that is simple and visible.
This is a pretty universal concept, but keep your commission structure simple enough that your sales engineers 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, historically we have most of the team sitting at about 75/25, but we do set their pay mix up in a way that they can earn more. We also believe in uncapped commission plans.
3. Tie the majority of sales engineering KPIs to company or team achievements.
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 individual 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 certain skill sets.
Final Thoughts
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. Sales engineers are also more susceptible to 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 new class of commission software that improves trust across organizations by automating commission calculations and motivating teams to drive top-line growth. With an intuitive UI, real-time visibility, and seamless integrations with the systems you already use, Spiff is the first choice among high-growth businesses.
