Post #1

10-18-2004, 11:38 AM
gradel
Site Member (inactive)

Sales Engineer Compensation

Heading into 2005, I'm compiling intelligence on SE compensation and trying to determine if my organization is behind the times or ahead of the curve. I work for a 2,200 person software company and we have endured steady growth in our sales and services organization and I have recently led a shift from pooled SE resources to more discreet sales teams. In speaking to several industry peers, I understand that SE compensation is a bit of an enigma that leads to numerous approaches. Here is what I have currently constructed and would welcome any input or persepctives on what others are doing and degrees of success or satisfaction.

Base: 80% Variable: 20% (this is the tricky part!)

20% variable breaks into sales team alignment (Commercial accts is one bucket and Government, Education & Health is another one). Once assigned to one of those lines of business, there is one last breakout to a "sales team" and this is one or two sales professionals. A typical 20% component might look like this:

50% - Commercial quota for region

25% - sales professional #1

25% - sales professional #2

In closing, here are my basic questions:

Does this appear in line with industry trend?
What are others doing to incent SE's?
Regards

Jason Gradel

Post #2

10-22-2004, 09:02 AM
stever11
Newsletter/Forums Member

SE Comp

I've hired many SE's over the past 6 years. The comp plan you suggest is reasonable. However, rather than going with a 80-20 rule, most of the enterprise software firms that i work with go with a 70-30 or 75-25 breakdown. You want to minimize your up front investment and make sure the SE's produce and drive revenue. A typical SE plan is 100K base + 50K variable. The variable component is usually tied into regional or company performance. I would stay away from tying the SE's comp to specific sales people. It will start to create conflict throughout the sales and sales engineering ranks.

Regards,

Steve Rosenblum

Post #3

11-01-2004, 01:36 PM
Gilmore
Newsletter/Forums Member

Jason,

Most of the compensation plans I have created for SEs were in the 80/20 range. Trends come and go so you may get a wide range of feedback from others here who have a different experience. You also need to compare apples and apples to be sure you are looking at the same total target compensation if you are considering different ratios. Company culture may influence the type of SEs you want to attract. Some companies want them hungry like sales reps with more compensation at risk and others value stability with a higher base.

As for the commission component I would stick with one quota based on a territory they support or if they are territory independent (SWAT team) then their division. Since their commission component at 20% or a little higher is still so small it makes little sense to segment it further.

__________________

Regards,
Mark F. Gilmore, President
Gilmore Consulting, Inc.
www.ConsultGilmore.com