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Ask Slashdot: Compensating Technical People For Contributing to Sales?
cloud-yay writes "I work for an IT consulting firm and recently I've been tasked with heading up our engineering consulting team — which without the fancy corporate speak means that we're trying to empower our engineering team to think a little like sales people instead of being purely service orientated. To clarify, our technical people are viewed by our customers as trusted advisors and when they see a opportunity for a complementary sale/network refresh/project they often involve our sales team, however when the customer sees the sales people, they always clam up because they're 'sales people' and customers think they are just interested in alleviating them of their money! I'm interested in what the Slashdot community thinks of how we should remunerate engineering teams for this 'sales' work (which would cost us commission to sales people anyway) but in a way that doesn't foster any animosity between sales and tech staff because in the end sales people live and die on commission. Has anyone worked in this environment anywhere and what works/doesn't work in your experience?"
When you change the incentives of engineers to be the compensate them the same as you would a sales person. The engineers become sales people pretty quickly. It's just human nature.
The opposite is also true by the way, if you change a sales person's salary to the same as engineers they're change into engineers pretty quickly. Incentives matter.
I work for an IT consulting firm and recently I've been tasked with heading up our engineering consulting team — which without the fancy corporate speak means that we're trying to empower our engineering team to think a little like sales people instead of being purely service orientated.
Translation: We're asking our developers to wear more and more hats and now we're asking them to sell the product because our customer listens to them.
To clarify, our technical people are viewed by our customers as trusted advisors and when they see a opportunity for a complementary sale/network refresh/project they often involve our sales team, however when the customer sees the sales people, they always clam up because they're 'sales people' and customers think they are just interested in alleviating them of their money!
Translation: I hate it when my customer is smart. They're supposed to be stupid and buy whatever we tell them to. Now I've realized that prior deals have built cracks in the trust between our sales team and them so now we have to try to leverage our technical team as salesmen. Sure, it will destroy their credibility after a few deals but we have to make every bit of profit off our customer until we don't have any.
I'm interested in what the Slashdot community thinks of how we should remunerate engineering teams for this 'sales' work (which would cost us commission to sales people anyway) but in a way that doesn't foster any animosity between sales and tech staff because in the end sales people live and die on commission.
Translation: There seems to be some credibility we can capitalize on yet, what's the fastest way to do that?
Has anyone worked in this environment anywhere and what works/doesn't work in your experience?
Your technical team is doing you a favor and they sound like they're managing to stay technical. The phrase "technically correct" might seem foreign to you as you're probably used to dealing with "fiscally correct" more often than not.
My suggestion is to leave your technical team intact and trusted by your customer and don't try to turn your entire company into a sales team like Microsoft. Here's a helpful hint: your technical team will inadvertently become your sales team when what you are leading them to do for your customer is truly innovative and inventive and maybe even a little bit risky. Don't ask how you can turn your technical people into salesmen, ask how you can change yourself and your company's vision so your technical people can't help but logically be salesmen. If your technical team starts sounding like salesmen, your customer will simply stop listening to them and trusting them. You practically answer your own question and would come to the same conclusions were it not for profit margin motivations!
My work here is dung.
Sales comes from a genuine need. Your perspective clearly indicates you think this is product pushing - and value added sales isn't product pushing. If your customer needs an external hard drive RAID array for backups of mission critical data, would benefit from a hosted solution, or would obtain other value from a software upgrade, SELL IT. Your salary doesn't fall from the sky. It takes a team of people bringing customers in and generating revenue to pay you. You should share in the challenge of keeping the enterprise afloat if you expect to be compensated for what you do.
So you want your engineers to stop acting purely as trusted advisors, and start thinking more about how they might push your own companies products. That seems like a good way to have your clients stop trusting your engineers. If your product is the best for the job, they should already be advising the clients to use it.
I mean, it's a tough economy, you gotta do what you gotta do. But still, I'm not sure you're going to get a lot of good advice on here.
Karma: pi (Mostly due to circular reasoning in posts).
Our entire sales staff consists of engineers. You know the type - got good grades in college, yes, but the social type of engineer, not the introverted perfectionists.
It seems to work. Yes they work on commission, but customers don't see them as know-nothing idiots. They all worked their way to a sales position by going through application support, so every one of them has the ability to help the customers troubleshoot problems, figure out solutions to new applications, and competently demo equipment.
It sounds like your company probably hired extroverted non-technical people for sales and introverted, detail-oriented people for R&D. Now it wants to take those R&D engineers and turn them into half sales people. That's going to fail. Hire the right people from the start and you'll find success.
If you insist on putting the wrong type of people in sales support roles, make sure there is a technically competent person to interface for them. A technical business analyst / technical marketing person can keep your non-social engineers from interacting directly with customers for the social feel-good stuff while allowing communication to flow unhindered for technical matters.
It doesn't hurt to be nice.
Ok, let's say that by some piece of luck your engineers become sales people. Good sales people, even.
Now they look around and realize something -- they don't need you. In fact, they don't need anyone else, because they can do the R&D *and* the sales.
If they don't have the power to fire all of you, they certainly have the power to take your customer list and leave to start their own company.
There's no -1 for "I don't get it."
You need to form a team of these guys. They're called Sales Engineers. They're hybrids who are extremely technical and knowledgable people who are part of the sales teams.
They often come from engineering backgrounds and cross over to the sales team and are hybrids of the two critters you are discussing.
Maybe you can ask management to tack on "sales engineer" to the titles of some of your engineering guys and have them actively help out in sales (and get appropriately compensated). Their roles are extremely important as sometimes sales/marketing only people are not equipped to handle extremely technical questions about tech products and software solutions.
http://www.object404.com
You notice that engineers are never the ones being sent by the company on a two week annual retreat to a tropical resort to celebrate and reward having done their job while the sales guys put in weeks of extra long days, nights, and weekends to make important milestones.
If you pay engineers a commission that a salesperson would have otherwise gotten, you have put them in direct competition with each other. That will foster animosity.
If you put in blanket rules like 'all engineers always get 20% commissions of inside sales' the salespeople will feel like someone else is caching in on their hard work, and in cases where the engineer won the sale entirely by himself, he will feel like someone cashed in on 80% of his pay. Neither person will feel like this evens out, even if it does.
Pay engineers to be engineers and pay salespeople to be salespeople. If both do their jobs right, you don't need to blur the distinctions in order to profit.
If you want an edge, here is what you should do: Train your sales people to be (or seem) trustworthy, to be (or seem) technically competent, and above all to regularly put effort into really understanding their clients' needs (or at least seem to). How much the client trusts the salesman is the #1 contributor to a sale. That directly addresses the root cause of the problem you are trying to solve. Also, allow salespeople to recommend engineers for bonuses based on sales assistance, and actually pay attention to the recommendations. That could help a bit too without creating animosity.
If you give away 40% of revenue in commissions you'll be out of business faster thank you can say "stupid idea". Sales commissions are usually single digit percentages. Even software companies don't earn margins high enough to justify the kinds of margins you are proposing. Manufacturing companies gross margins are normally much less than 40% and that is before any SG&A or interest or taxes.
This sounds like it has potential for Scott Adams to get a good number of strips out of this.
...or sometimes a Solution Architect.
Most big tech companies (think SAP, Oracle, IBM, Red Hat) have a specific role for this. It is someone who could be an engineer but is specifically assigned to the sales process. Once the sales person has found the lead, the SE works with the customer to identify their needs and how best to meet them with the company's products. The sales person writes the deal and handles all the "sales" stuff.
Oh, and the SE gets a set percentage of the commission.
Ask Slashdot: Where bad ideas meet poor googling skills.
In an attempt to actually answer the extremely good question as opposed to some of the perfectly good personal opinions: As some of the comments have alluded to you are referring to Pre-sales Engineers who are this lovely breed of technically savvy, personable (mostly) and engaging characters who can articulate a technical message, marry it to a business requirement/message and do it convincingly. I have been working in this capacity for 6+ years now and have been through many iterations of compensation, some of which were better than others. They were: 1. Per-sale based compensation - not so good as you're eating into the sales person's comp, and they don't like it. It also incentivises you to act more and more like a sales person. Not so good either. 2. Qualified pre-sales visits compensation - generally "how many pre-sales calls did you make". The goal is to measure the ability to generate new business. Not so good, as it's very difficult to quantify and track, and the general pattern of behaviour is to just have stacks of meetings without providing any quality. 3. Quarterly/Annual Revenue based - this has been the most successful in my experience. Success is measured on overall revenue generation of the sales organization (of which this kind of person is a part of) rather than individual sales based commission. Commission is generally a fixed amount per-quarter based on attaining revenue figures or % growth thereof over previous years/periods. This is good as it tends to remove the person a step or two back from chasing individual sales, and then bickering over the commission for each one. The fixed comission amount (say 15% of gross annually or something) coupled with the quarterly revenue targets creates a more team based focus for everyone to assist in the success of the venture. As for the trusted advisor vs. sales debate - the sad truth is that no matter who you are, if you're asked to sell a single product/suite (instead of solutions) you're going to lose a little bit of your trusted advisor status as you're only pushing that single product rather than considering the larger picture/industry solutions. I hope this helps, PM me if you'd like to discuss further as I have had exposure to a fair bit of this type of situation and may (or may not!) shed some light to help you come up with something that works for your company.
Okay, now from TFA.
So, the "socially inept" engineers somehow manage to convince the customers that they (the engineers) are trustworthy.
While the socially skilled sales people are unable to do this.
I question your definition because it seems to be the opposite. At least in the case presented in TFA.
I'd look at the root cause of why the customers seem to trust the engineers more than the sales people.
...merely to see that look on your once-smug face when you wrap that commission-funded Porsche of yours round the nearest lamp-post after one too many bottles of Pinot Grigot at your expenses-funded lunches.
Here's how it should work:
1. You tell me what you need and when you need it by.
2. I laugh in your face and tell you what you really need and when you can have it by.
3. You get two phone calls or two emails to me between now and the deadline to ask me "How's it going?" Any more than that and I get 10% of your commission for each additional call or email over the limit.
4. You are a salesman, you deal with persuasion and lies. I am a techician, I deal with reality and fact. So don't try to get all technical on me because you read 5 pages of the product manual.
5. When it's ready, I will call you and you can have it. It will leave my lab working but if it's broke when it gets to site, you lose 10% of your commission immediately plus 10% for each 4-hour period I have to spend on making it work again.
That's it. Simple.
Gentoo Linux - another day, another USE flag.
If this fellows customers get wind of their "trusted advisors" getting kickbacks for making sales, they'll be a lot less trusted.
If the OP wishes to compensate his engineers for their time, that's all well and good. But they need to be compensated whether they make a sale or not. Anything less is a conflict of interest for an engineer who is used to operating based on facts.
Give me Classic Slashdot or give me death!
in the end sales people live and die on commission
And you wonder why your customers don't like your sales people?
Instead of trying to work around a problem, why not solve it. Pay your sales people properly, and they might start listening to customers instead of trying to make every sale they can (without the customers interests in mind).
When we have customers approach us, we set them up with a technologist: they gather all the details from what the customer needs without trying to sell them anything. the technologist hands the details off to a sales person, who themselves MUST be familiar with the products/services the company sells, who contacts the customer with some ideas of what might help them.
Commissions are for people who don't know the value of what they're selling.
It's not about the % - the idea is ass backwards!
Instead of turning your highly skilled techs into sales people spend the money training your sales people to understand the tech. They don't need to understand the minutia but they should understand it well enough to be able to converse with a tech. Rather than having them hand off a client from one person to the next have your sale's guy be the primary and only contact point. They should never need to consult with the technicians as to how/whether something can be done rather only be able to understand and communicate exactly what the client needs.
So your customers think salespeople are there only to sell them things they may not need, and your sales people live and die by commission?
Surely there's your problem.
If you're paying for sales, surely whoever makes the sale should make the money. And if you're paying people to sell, who then cannot sell because they have no neutrality, why not rethink your compensation structure?
Making salespeople live by commissions is an outdated business model. It makes savvy customers react just the way described. Is this guy looking out for my interests or his bank account?
You don't want your company lumped in with car salesmen in customer's heads.
If Slashdot were chemistry it would look like this:Cadaverine
Any salesman will be happy to share a commission with you, provided you actually sell something. However, from your description I can only see that you are reacting to a specific customer's wish to purchase something. Neither have you actively made the customer come to a decision to purchase something from your company, nor have you done anything with regard to the administrative side of sales.
In short: You have done what you are already paid to do, nothing more. Had you done anything less, you would have actively hurt the company that pays you to do your job.
I am head of sales for a software company and I expect support in sales from our engineers. That is covered by their salary. My base salary, however, is a lot less than theirs and I actually take financial risks to be compensated only when I or my sales team do well. You, on the other hand, want a commission on top of a risk-free salary and in that case I would either demand a cut in your salary if you ask for a commission, or I would tell you to be happy with what you earn.
You can't have both.
However, if you feel comfortable in dealing with a customer and if you are willing to put some effort into learning all the soft skills necessary to be a good sales rep, you will probably be an enrichment to both the sales and the technical department. Few sales people do actually understand deeply technical stuff and can rarely transport customers' technical input to the engineers.
Someone who speaks both languages is a valuable asset and I would immediately hire you and make sure you make lots of money.
Get ready to fucking fail. Your customers will start looking at your competition. Short term gains will be up, but long-term, you're fucked.
Why do you think the salesmen are mistrusted and the engineers are trusted? Ever bother thinking of that? It's probably due to salesmen lying only slightly less than politicians for their bread and butter, and engineers being about as factually oriented as you can get. Sales types are hated by engineers for this very reason: sales will commit engineers to one lie after another without second thoughts, making things difficult. It's just a lie to the salesman, but it's actually something the engineer has to perform.
Furthermore, competent 'engineers' don't need to be told to "upsell" products. They'll recommend the most technically appropriate (per their knowledge/experience/etc.) product to the customer. This is not only why they are called engineers, it's why they are trusted. If you try that to try and 'improve the bottom line' you're a fool and don't understand your customers or your employees.
Furthermore, the competent engineers will become disatisfied with falsifying things or pushing products, and look elsewhere. I've seen it happen. If they don't become dissatisfied and look elsewhere directly, they're going to start asking for larger and larger raises because they dislike the work. I've seen it happen time and time again.
On the other hand... getting rid of sales outright might improve the bottom line, as well. It really depends on what you'll be having the engineers do. (Broadly speaking your requirements do not sound that broad.) Overall, I'd say axing 'sales' is a good idea. Keep marketing, kill sales.
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
"...without the fancy corporate speak... ...empower... ...service orientated. ...trusted advisors... ...opportunity for a complementary... ...remunerate...
Thank you for not saying "synergy". It's Sunday and I have too much to do today to pull out my phone and start playing Angry Birds while nodding thoughtfully.
I've seen this tried before and it turns out that it's a lot easier to teach sales skills to a techie than to teach techie skills to a sales person.
If you try and teach a sales person "enough to be able to converse with a tech", you'll only extend by minutes the time it takes for the techie to blow past their knowledge base.
Also, it might seem like it would be hard to find a techie to touch sales positions, and not that many like it, but the same problem occurs when trying to get them to be a manager. If you offer enough money some will go for it.
People skills make money. Technical skills make products, which need to be sold and *may* make money, provided you have someone to sell them.
I'm afraid you suffer from the very blinkered thinking that a lot of other sales people suffer from - to correct you, technical skills make SOLUTIONS, not just products.
That's precisely why I can take a bunch of our existing products, explain to a sales guy how I can connect them together in a fun way for the customer, or devise a value-add service on those products for the customer and get him to go sell it. He can't design it, I can't sell it, end of story.
BTW, as head of sales my notebook is a Thinkpad running Linux.
Sorry, are you the original submitter of the article? If not, then the above is irrelevant information as I was quoting and addressing him based on his "sales-speak" type comments.
However, I drive a black company Audi, which in you eyes probably qualifies enough to be put into the "stupid sales droid" drawer.
I get a company car, I chose a VW Passat because it was a good enough car at a good enough price when I needed to buy one. It's based on the Audi A4 chassis so I'm told, otherwise it's got aircon, a music player and gets me from A-B. Car talk is wasted on me I'm afraid, I'm not an enthusiast and probably don't even know what some of my close friends even drive.
Stupid sales droid? No idea, are you one then? Again, I was quoting and responding to the submitter's comments - he sounds like he works for a reaonably big organisation like I do where there are distinct sales and technical people. Other orgs are smaller, even one-man operations, in those there are probably sales people who have to be technical also.
In my organisation, there are good and bad sales people.
The good ones know I don't bullshit, trust my ability to help them out and leave me to get on with it - they also listen to my point of view and learn something in the process, at the same time I can learn about the pressures there under & either give them more support in front of the customer or work out better and quicker ways of doing stuff.
The bad ones don't listen as soon as they realise they can't have what they want and just go crying to their boss to escalate the issue. Those are the ones I was referring to in my posting.
Only you know which of the above categories you fall into.
Gentoo Linux - another day, another USE flag.
The best companies I have dealt with, have zero sales commission and their sales staff are not salesperson but company representatives.
Their function is to promote good relations between their companies and the customers. Products and product pricing, get customers in the door, good company representatives keep them there.
Generally when it comes to sales reps the bigger the commission the worse the shit head and the quicker I would kick them out, lie cheat and steal are their motto and, any difficulties are someone else's problem ie the engineering staff.
Want to effectively get engineers involved in sales support, drop commissions and establish a company wide team attitude. The company does not employ them or keep them employed, it is the customer that does that.
You know what they don't teach in college, how to lie like a used car salesman, how to lie like an insurance salesman and how to lie like a politician (note they all derive the majority of their income from commissions, the politicians just hide their offshore tax haven accounts).
Chaos - everything, everywhere, everywhen