In the last few years, RevOps careers exploded across the tech industry. 

According to Clari, RevOps jobs increased by 300% in the last 18 months on LinkedIn. 

This growth follows the rising changes in how companies think about their revenue philosophy. 

Forbes said, “RevOps treats revenue not as a fortunate outcome of a quality product, but like a mirror of the supply chain — a pipeline that needs to be powered by optimized business processes.” 

These optimized business processes must also reflect how buyers buy now. 

For instance, in today’s market, tech buyers have already done plenty of research before connecting with a sales rep.

Some even expect to be able to trial a product ahead of that introduction.

That means all internal teams, Sales, Marketing, Account Management,  Customer Success, and even Product, must align on what matters most to the buyer and the customer, and then work together to deliver those experiences. 

And the role that connects them, with data-backed recommendations to optimize business efficiencies and revenue, is RevOps.

What is RevOps? 

Revenue Operations (RevOps) aims to bring data transparency across Sales and Marketing, improve process efficiencies, drive revenue predictability, and achieve revenue growth.

The goal of RevOps is to streamline the customer journey and remove any obstacles or inefficiencies that may prevent a customer from making a purchase or reaching their desired outcome.

This is achieved by combining data, processes, and technology to create a unified revenue team that works toward a common goal. By focusing on revenue-related metrics, such as customer acquisition cost (CAC), customer lifetime value (CLV), and net promoter score (NPS), they work to improve the customer experience and promote growth.

Essentially, RevOps helps businesses maximize their revenue potential. 

When is it time to hire for RevOps? 

There is no “perfect time” for an organization to bring in a RevOps hire. However, RevOps should be able to address these challenges: 

* Streamline revenue processes

* Act as a liaison to Sales and Marketing 

* Eliminate data silos 

* Remove unnecessary resources, or “app bloat”

At QuotaPath, for example, our CEO and Co-Founder AJ Bruno hired our Sr. Director of  RevOps, Ryan Milligan, with only 40 employees at the time. We hired Ryan initially in a SalesOps role, but after AJ recognized Ryan’s vast skillsets in Sales and Marketing, we pivoted the role to RevOps. So, it was an easy decision to move Ryan into RevOps. 

Stage 2 Capital has some great advice about when and how to hire for RevOps. Specifically, they call out the need for RevOps once you’ve hired your first Sales Leader.

90-Day Plan for RevOps 

Your first Revops hire should come into the role with a 90-day plan. To learn what to expect and to help shape your new RevOps leader’s plan, we borrowed advice from RevOps Leader Jeff Ignacio. 

Jeff recently started a new role and outlined his plan. 

He said it usually takes six months to establish a RevOps framework, but there’s a way to cut that in half with a practical 90-day plan.

First 30 days: 

• Learn as much as possible
• Understand the company’s values, culture, goals, and processes
• Meet with key stakeholders and leaders across the organization 
• Understand the current revenue landscape and challengers
• Identify quick areas to win
• Set goals for the first 90 days that align with the company strategy

After the first 30 days, RevOps can start executing and implementing some changes.

60 days in: 

• Establish a RevOps plan to achieve the goals set in the first 30 days
• Implement new tools to get rid of silos and will generate revenue
• Collaborate with sales, marketing, customer success, and other teams to create seamless communication and execution of RevOps strategies 
• Analyze data to improve processes and close gaps

For those last 30 days, RevOps leaders should start growing the business and showing profitable contributions.

90 days (last 30 days): 

• Continue to optimize processes and tools to create generational revenue 
• Measure RevOps initiatives that you implemented in the first 60 days
• Continue to develop relationships with key stakeholders to deepen alignment and collaboration 
• Present reports to leadership and seek feedback for improvement 

RevOps Best Practices

Whether you’re a growing company looking to start a RevOps team from the ground up or adding more experienced leaders to your team, we have a few best practices that we’ve gathered from our RevOps pro, Ryan. We touched on some of these practices above via Jeff’s framework, but let’s get more granular.

1. Understand Company Goals: the knowledge gained in your last role will only get you so far. Educate yourself on this business’s current industry and needs, which will help you understand how to bring in more revenue.
   
2. Align company leaders: all heads of the business should be on the same page about business goals. If you create transparency then everyone will trust your practices.
   
3. Verify data: Correct data ensures you pay your sales teams accurately. Plus, accurate data allows the finance department to make better projections. Your work reflects your department and your boss, and that data will determine the next steps for multiple departments within the company.
   
4. Revenue increases then salary increases: RevOps leaders understand company goals and they can set strategic expectations for the sales team. These should be attainable and realistic. If the sales team believes they can reach quota, they will perform better to meet their goals as well as the company’s.

RevOps leaders carry a heavy load managing the sales funnel, financial projections, and company growth.

 “Sometimes RevOps leaders make the mistake of not asking the sales team what they need, what they see in the market, and how they want to be measured,” said Ryan. “By gathering this feedback from the sales team, I can incentivize the team through compensation plans that drive results and keep the team motivated and happy.” 

About QuotaPath

QuotaPath’s commission tracking software supports RevOps professionals responsible for sales compensation design, calculations, and payments. 

Try out QuotaPath for free by integrating with your CRM, like HubSpot or Salesforce, with a free 30-day trial. 

In an effort to simplify sales compensation, we launched Compensation Hub, a free library of 20 widely adopted and customizable comp plan templates. Users can modify plans for their business and share them internally with their teams to kick off design evaluations. 

Now, we’re taking the simplification a step further.

Your comp plan should be without complexities, and so should your ability to try out sales compensation management solutions before purchasing. That’s why we offer a free trial with an easy-to-follow, 3-step onboarding experience.

Build a comp plan, map your CRM, and streamline payouts during our 30-day trial. Access our most comprehensive product offering with all of our features available to explore. 

With our new trial, users can:

• Build a compensation plan (or borrow one from Compensation Hub)
• Sync your CRM, such as HubSpot or Salesforce
• Invite and manage team members 
• Test future comp plan adjustments to current bookings
• Forecast pipeline deals and attainment
• Approve earnings and schedule commission payouts

Get started in QuotaPath

To see success with QuotaPath, we encourage you to complete these three steps:

1. Build your sales compensation plans
2. Sync your deal data 
3. Onboard your team members

Our intuitive interface will guide you through the steps to build your compensation plan within the app. Use our widely adopted adjustable templates, build your current plan, or test a plan you have in mind to implement later in the year and see how today’s numbers stack up.

Note: Once you have one plan built, you can duplicate and edit it for additional comp plans at your organization.  

Next, you’re ready to integrate your CRM. 

We have pre-built integrations and a data mapping tool with Salesforce and HubSpot that take only a few steps to set up. These syncs are one-directional, meaning only the CRM data feeds into QuotaPath and we never overwrite your data.

The third (and last!) step involves adding your team members.

You’ll have the ability to notify members and invite them into your QuotaPath workspace, or, you may choose not to alert them. If the latter, this will give you a chance to see how their existing pipeline translates to earnings and attainment within our app. 

Once you’ve reviewed your teams’ earnings and attainment, confirmed the sales compensation plans are properly set, and secured your CRM integration, you’re ready to invite your team and give them the sales compensation transparency they yearn for.  

So, what are you waiting for? 

Get out of spreadsheets faster and run your next commission payouts using QuotaPath’s free commission tracking trial. 

Have additional questions about how to use QuotaPath for your plans and teams? Book a time for a consultation with a member of our team for a custom demo of QuotaPath’s sales compensation software. 

If you run, manage or work in a business that offers goods and/or services to customers on a contractual basis, you’ve likely heard about ASC 606. But being familiar with the term and having a full understanding of this important guideline are two very different things. Whether you lead a sales team or are an accountant focused on compliance, you need to know the answer to one very crucial question: What is ASC 606?

What is ASC 606 and who does it apply to?

ASC 606 is a relatively new standard in accounting that outlines the principles of revenue recognition. Most accounting professionals are already BFFs with ASC. That stands for Accounting Standards Codification, which is the go-to source for accounting principles as defined by the Financial Accounting Standards Board (FASB). ASC 606 represents a change to those core principles.

Any company that offers a deliverable, such as a good or service, is technically subject to ASC 606 guidelines. These principles were created by the FASB and the International Accounting Standards Board (IASB). The goal is to make it easier to compare revenue from organization to organization and even industry to industry. In other words, it’s all about simplicity and consistency.

When compliant with ASC 606, companies should be able to:

• Quickly identify inconsistencies and therefore strengthen overall revenue reporting
• Bolster existing revenue tracking and reporting systems
• Better compare revenue recognition across various industries, jurisdictions and markets
• Streamline how financial statements are prepared

Do I need to worry about ASC 606?

Are you a business or organization that enters into any type of contract or sales agreement with consumers? If so, you must be compliant with the principles of ASC 606. This includes the sale of goods as well as services.

5 steps to recognizing revenue under ASC 606

There are five steps to recognizing revenue according to ASC 606 principles. While the details are far more complex than stated here, this overview should serve as an introduction to what’s required to achieve compliance.

Step 1: Identify the contract with a customer

For the purposes of ASC 606, a contract is an agreement that involves two or more parties. This agreement must:

• Have the approval of all parties
• Confirm that all parties are committed to fulfilling their obligations
• Identify what goods or services will be provided
• Identify payment terms
• Indicate that the contract/deal is commercially substantive
• Be predicated on the belief that the vendor is likely to receive payment

Step 2: Identify the performance obligations in the contract

A “performance obligation” is whatever has been promised in terms of transferring goods and/or services between a vendor and the consumer. This sounds simple, but ASC 606 specifically mentions “distinct performance obligations,” which is a more complex definition. For a good or service to be classified as “distinct,” it must be:

1. Something the customer can benefit from on their own or by using other resources that are readily available
2. Identifiable on its own, and therefore held distinct from other promises in the same contract

There are many details involved in determining whether a performance obligation is truly distinct. Many examples include a product plus an added perk, such as a service, that’s intended to increase perceived value. Perhaps a store selling a refrigerator with free installation. The fridge and installation are distinct promises because the consumer can buy and use the fridge and still have someone else do the installation. The vendor doesn’t have to fulfill both promises. In this case, the revenue would be recognized separately.

Consider instead an IT company that is providing a significant company-wide upgrade for a client’s network. They’re including many types of software, all of which depend on custom installation and employee training. Even though these products seem separate, they likely would not be considered distinct. That’s because the customer can’t use them unless the entire package is delivered — the functionality of the parts depend on the whole.

Step 3: Determine the transaction price

The contract should include the agreed-upon price the vendor expects to get in return for the transfer of the promised goods or service. Contract price doesn’t include third-party variables such as sales tax, and it doesn’t consider possible future options.

Determining the price is typically the easiest of the five steps. This is especially true when the transfer involves a fixed cost that’s payable when the goods or service is delivered. For instance, if you sell a stereo and the customer hands you cash, that’s a simple deal. When financing, barter, bonuses, coupons and rebates and other factors come into play, determining price can be a bit more taxing.

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 3 deals with the overall price or consideration the vendor expects in return for their good or service. Step 4 is about determining how much the transaction actually represents economically. This may be a matter of judgment and you may have to make some educated estimates. For the most part, though, you’re basing allocation on the relative standalone price of each good or service.

Step 5: Recognize revenue as the entity

Lastly, it’s time to recognize the revenue. This happens when the deal is done, otherwise known as when the performance obligations outlined in the contract are complete. You’ve delivered the fridge, completed construction on the house or convinced your client to purchase 800 new desk chairs for their team. Once control of the good or service is transferred to the customer, your job is done and you can officially recognize that revenue.

Already comfortable with your current revenue recognition methods and worried about what ASC 606 will mean for your workload and your sanity? You can still use the approach that’s best for your business. Just make changes according to the best practices outlined by ASC 606 and adapt your current process to improve consistency.

QuotaPath offers features for Finance & Accounting to run payroll with fewer mistakes. We also offer a solution to stay ASC 606 compliant. Create flexible amortization schedules and product audit-ready reporting in clicks.

A sales QBR isn’t just another meeting. These crucial sit-downs are often the starting point for major quarterly gains. From addressing urgent issues to strategizing ways and driving revenue, a QBR in sales can uncover crucial insights that help strengthen the entire team.

Not, sales QBRs differ from customer QBRs led by account management. For information on those types of QBRs, check out ScalePad’s 2023 State of the QBR Report.)

Here’s a look at sales QBRs and some tips on how to make the most of these invaluable reviews.

What is a QBR in sales?

“QBR” stands for quarterly business review. This practice is essentially a chance to dig deep into everything that happened over the last quarter and plan for the next one. Unlike an account management QBR, which is done with the client present, a sales QBR is between a sales manager and a salesperson.

In many ways, a QBR is like a strategy session and performance review rolled into one. Think of it more like a discussion than a critique, though. It’s an opportunity for the salesperson to showcase key skills and discuss their plan to meet quotas and propel the team toward company goals. For the manager, a QBR offers insight into an individual rep’s thought process. It’s also a forum for praise, constructive criticism and other bits of actionable advice.

The centerpiece of a sales QBR is the presentation by the rep. These presentations can take many forms, but most include some of the following:

• Recent sales reports
• Forecasting for the next quarter (and sometimes beyond)
• A look at the big picture, including how an individual rep’s numbers play into the company’s objectives

It’s often helpful to use a sales QBR template. This ensures you don’t miss anything while also staying focused on the review’s primary mission.

Why is it important to run a sales QBR?

Sales departments are big on feedback. Weekly one-on-ones are important but often briefer and less in-depth than a quarterly business review. Running a sales QBR allows you to look at and plan for big-picture tasks. This could include:

• Setting promotional guidelines
• Determining and strategizing for longer-term goals
• Giving higher-level feedback that can help not just with current projects but with overall growth and advancement

What to discuss during your QBR

A successful sales QBR starts with a plan. Here are a few expert suggestions for things to discuss. As a rep, this list will help you make your case. As a sales manager, you’ll have the right materials on hand to make a fair and balanced evaluation.

The previous quarter’s sales metrics

Gather your sales figures from the last quarter. We’re talking hard and fast numbers like:

• Quota attainment
• Demo-to-close rate
• Sales cycle length
• Pipeline growth

You’ll be looking at the numbers on their own, but more importantly, you’ll be comparing them to the numbers from previous quarters.

Last quarter’s goals

If you’ve just joined the company or are having your first QBR for another reason, skip this. If you’re on at least your second QBR, you’ll be reviewing what your goals were for the previous quarter.

For sales managers, this is an opportunity to analyze performance and see how the rep is learning from mistakes and scaling their successes.

Goals for the upcoming quarter

You can’t live in the past, but you can use it to plan the future. A big part of QBRs in sales is constructing a plan of attack for the next quarter. Start with three to five realistic but reasonably lofty goals. It’s good to push your rep or, if you’re the rep, push yourself. But remember that setting the bar too high can be defeating even before the quarter gets underway.

As you outline goals, make sure half of them are sales specific. This could include objectives like hitting a sales quota or increasing the number of qualified leads. It could even be as simple as making a certain amount of money. The other half of the goals should involve soft skills that will make the rep a better salesperson or employee. Some examples include:

What’s the best time to run a QBR?

As the name suggests, quarterly business reviews are done four times a year. But it’s also important when a QBR is performed during the quarter.

Prevailing wisdom says to run the QBR as early in the quarter as possible. Try to run your sales QBR within the first 2 weeks of the quarter. That way, the previous quarter is top of mind, and it’s easy to remember what happened, what lead up to notable highs and lows, and other pertinent details. It’s also the ideal time to focus on goals for the next quarter. There’s time to design a strategy and lay the groundwork for new levels of success.

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Use our free sales funnel resource to see how many meetings your team needs to book to hit quota.

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What tools can I use for a QBR?

For a QBR to be effective, you need a lot of data. To collect and analyze that data efficiently, you need some help. An expertly crafted QBR blueprint will help you plan for a review that’s thorough yet focused.

For help tracking quota attainment (and commission), use QuotaPath. More sales, fewer spreadsheets, and a way to handle tricky calculations without resorting to a single spreadsheet. For more information on setting up QuotaPath before it’s time for your next round of QBRs, create your workspace today.

This blog answers “what does Ops mean?” and how this role translates across industries.

Acronyms and abbreviations exist virtually everywhere, especially in the business world.

These shortened versions of common terms can cause confusion with multiple meanings depending on the industry and context.

For example, if you Google common sales abbreviations like “AE” or “SDR”, without specifying “in sales”, you’ll see that these terms have many meanings beyond Account Executive and Sales Development Rep.

So, it’s not surprising that anyone not familiar with the business world might not know what the abbreviation “Ops” means.

Ops in business is short for operations. This department ensures the organization runs efficiently and profitably and typically falls into functions like Product, Marketing, Revenue, and Sales.

Ops has exploded into popularity in the past few years, and with good reason. 

The call for business efficiencies is especially amid a recession. As of February 2023, for instance, Ops roles dominated job boards, including LinkedIn which had more than 300,000 open roles including

• Operations Manager: 205,427
• Sales Operations: 34,257
• Revenue Operations: 73,470

Searches for other Ops roles yielded similar results, too.

But one thing to remember is that businesses treat and define Ops roles differently according to the industry and size of the company. 

Below, we take a look.

How Ops differs between industries 

Although Ops principles are the same across industries, the specific tasks and challenges Ops teams face can differ significantly. 

Here are some examples of Ops teams across industries:

Retail

Retail Ops teams focus on supply chain management, inventory management, and logistics. They are responsible for ensuring that products are delivered to the right stores at the right time and in the right quantities. They also monitor inventory levels for consistency in customer satisfaction and revenue. Retail Ops teams may also manage third-party logistics and transportation providers to provide timely and cost-effective delivery of goods.

Healthcare

Ops teams in healthcare focus on managing the delivery of patient care and keeping medical facilities running smoothly. Healthcare Ops manage patient flow, staffing, and equipment and supply management. They may also oversee compliance with regulations like HIPPA, ensure patient data security manage procurement, and coordinate seamless patient care with other healthcare providers.

Manufacturing

In manufacturing, Ops teams oversee the production process, uphold quality standards, and orchestrate on-time deliveries. They also lead the supply chain, logistics, inventory management, production planning, workforce management, cost control, and environmental and safety compliance.

Technology

In technology, Ops teams focus on managing the infrastructure that supports software applications and services. They ensure the smooth operation of hardware, software, and networking components and minimize downtime. Sometimes they also manage cloud infrastructure, data centers, and cybersecurity.

Differentiating between various Ops Roles in SaaS

To further complicate the understanding of Ops, Software-as-a-Service (SaaS) companies, have created their own set of business Ops roles such as Sales Ops, RevOps, and more. Take a look. 

Sales Ops  helps Sales achieve and maintain consistent growth by handling activities like sales strategy, territory structure and alignment, sales process optimization, and compensation plans.

Marketing Ops supports the systems and processes necessary for Marketing to successfully perform their roles. The systems and processes marketing ops oversees include user data, forms, conversational marketing, and email operations.

RevOps combines Sales, Marketing, and Support, to increase visibility and communication (and therefore results) by eliminating silos across these departments. RevOps focus on revenue growth and tracking related metrics like customer acquisition, bookings, recurring revenue, customer satisfaction, and churn.

SaaS Ops, a fairly new field, came to exist due to the constant addition of software to company tech stacks. SaaS Ops manages all aspects of SaaS at an organization, including processes such as budgeting and approval, onboarding and offboarding, security risk and compliance management, and SaaS administration automation.

Product Ops oversees activities like market research, quality assurance, and business process improvement to ensure the success of a product.

DevOps creates coordination and collaboration between formerly siloed roles like development, IT operations, quality engineering, and security. DevOps is responsible for activities like application planning, development, and delivery to increase confidence in applications and respond to customer needs to reach business goals faster.

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Use our free sales funnel resource to see how many meetings your team needs to book to hit quota.

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Ops tools and technologies for SaaS companies and startups 

These Ops teams clearly have a full plate of responsibilities and hardships. But, like the spike in available roles, new tools and technologies have emerged in sidestep.

For example, we sourced a few of the popular tools and technologies commonly used by SaaS and startup Ops teams

Hubspot Sales CRM: Helps sales teams close more deals, manage client relationships, and track team activities.

Trello: A project management platform that provides visibility across relevant tasks, files, and stakeholders, plus the ability to easily update and adjust as priorities change or work is completed. 

Qwilr: Helps sales reps and ops teams effortlessly create proposals and sales materials. One of the more popular sales proposal software options.

Chili Piper: Automates the handoff from Sales to Customer Success to optimize the entire customer journey.

BetterCloud: Streamlines SaaS management by automating onboarding, offboarding, and mid-lifecycle changes, SaaS application access and entitlements, and security policies.

QuotaPath: Automates sales compensation processes and commission tracking and payouts.

Intercom: A customer messaging platform that helps companies engage with their customers in real time.

Mixpanel: An analytics platform that helps companies track user behavior and measure the effectiveness of their product.

These tools can help SaaS companies and startups improve their operations, streamline their workflows, and provide better customer experiences all around.

Now can you answer “what does Ops mean?”

Having read through the nuanced Ops roles from industry to department, you should now feel pretty comfortable telling a friend about the significant role Ops plays in an organization.

As a recap, Ops oversee cost containment, product development, customer satisfaction, efficient workflows and communication across nearly every department within an organization, and, of course, overall profitability.

For additional resources and tools to increase Sales and RevOps efficiencies, check out QuotaPath’s library of tools.

Compensation Hub

Sales Compensation Trends to Know in 2023

Calculate Quota:OTE Ratio

Sales Compensation Calculator

Build a Sales Funnel

Guide: How to Build a Compensation Plan Your Sales Team (& Future Investors) Will Love

Sales Commission Tracker Template

About QuotaPath

QuotaPath removes the lift of sales compensation management and commission tracking by automating the process from plan design through earnings payouts.

Sync your CRM, like HubSpot or Salesforce, and give your Sales team immediate access to their real-time and forecasted earnings and attainment. Start a free 30-day trial, or book a time to learn more. 

The coronavirus pandemic transitioned many industries to remote work. As a result, the usage of video software like Zoom and Microsoft Teams skyrocketed.

But even as companies have slowly returned to work over the past year, most have implemented hybrid models that encourage employees to take a few days to work from home.

So, as you continue to host meetings virtually with clients, know that a face-to-face request is 34 times more effective. Still, if you’re still struggling with establishing report with your clients, we’ve got some advice — and some virtual backgrounds — to help!

A virtual background can provide a sense of privacy and show a little brand loyalty and personality on a video conference. Plus, they’re great for hiding a messy office or kids popping their heads into your workspace every 5 minutes. Here’s a list of some dos and don’ts of virtual backgrounds for your sales calls.

The do’s of video conferencing backgrounds

• Do keep it simple.
• Do brand your background. Ask your in-house designer, or check out Canva to create one.
• Do use it to engage your audience. If you’re feeling fancy, use it to highlight a core value, upcoming feature, or a stat that speaks to your audience’s goals. Many companies use split-screen videos as part of their video conferencing tools, as they can be highly effective in comparing your content side-by-side. This, in turn, keeps your audience engaged and facilitates discussions.

The don’ts of video conferencing backgrounds

• Don’t use a distracting background.
• Don’t use a joke background during a serious meeting.
• Don’t use a moving or video background.
• Don’t wear the same color as your background.
• Don’t use a background if you move around a lot.

Although the don’ts aren’t appropriate for those important calls, they can be a fun, expressive way to engage with your internal team. Check out this great round-up of virtual backgrounds.

Here are some free video conferencing backgrounds to download now:

And for all those QuotaPath supporters out there who want to show a little extra love:

HigherPeople had a banner first year.

The talent development startup sprinted past its annual targets in 2022, many thanks to the referrals and word of mouth from CEO and Co-Founder Katy Stover’s professional network. 

But then 2023 planning began — and with it, a goal to double revenue.

Could they lean on Katy’s network to reach it? Sure, they could try.

But Katy and her team, a group of experts who excel in hiring strategies for early-stage startups, recognized the need for a legitimate sales practice.

“It was very clear that in order to grow and expand, we needed to have a true, dedicated salesperson, methodology, and process,” said Katy. “We could stay a small agency, but we would only get so far.”

What to look for in your first sales hire

As such, Katy and her team kicked off the process to bring on their first salesperson, an experienced leader that blends strategic know-how with a hunger to prospect and win business. 

The title? Head of Business Development. 

Katy and co. set out to find a seasoned sales professional capable of building a forecasting model and identifying buyer personas while firing off prospecting messages. A unicorn of sorts in the startup world. 

“We wanted a relationship seller who is strategic, analytical, has a deep understanding of buyer personas and pain points, with proven success in building a team and methodology from the ground up,” said Katy. 

Still, despite what some would consider a tall order of an experienced leader willing to take on outreach efforts, Katy and her team scored a hire quickly. In two months and rigorous rounds of negotiations, HigherPeople had an offer letter signed and returned.

Below, we asked Katy how she hired her first salesperson and how she created an attractive sales leadership compensation package to match. 

How did you start your process to hire your first sales leader? 

Katy: We did what we do with our clients by starting with a “search kickoff.” This is a document that outlines all the things we need: what we’re looking for as far as goals, KPIs, comps, target companies, and personas. Then we build a rubric to assess candidates and assessment criteria to match this rubric. Most of this happens in behavioral interviews but some of it gets covered in a case study.

Our interview process for this role started with a 30-minute interview with me, which often went over because of their questions (which is a good sign for a strategic role). Then they would speak with our Head of Operations. I told them it was a reverse interview so that they could assess our organization to see if they wanted to work here. Then, I would touch base with them again and follow up with a case study. The final step was a panel interview with our recruiting team to check for culture.

What did your case study entail? 

The case study is always the most telling part. It makes or breaks. You really see the difference between a junior-level and a senior-level candidate. We provided two prompts. The first asked them to walk us through how they would grow ARR from our current number to our target. 

When they presented, we assessed presentation skills, analytics, and how they broke down the math to get to the target. Candidates that did not do well gave high-level answers. Meanwhile, senior-level candidates asked for all the data and were very analytical about how to get to the numbers. 

We asked “how would you take this new product to market” for our second prompt with very little information. This one evaluates their startup scrappiness and how to leverage resources in the universe to gather research. 

How did you approach sales compensation for your first sales hire?

Strategic leadership roles are hard, but Sales is especially difficult because there’s so much nuance. We had to talk through who owns a deal, and what happens if this person starts the relationship, then leaves, or is fired. 

Our lawyer educated me through every question.

We also were flexible throughout the negotiation process. Where we landed was different than where we started as we talked with more people and iterated accordingly. 

We ended up with a commission structure that includes a 75% to-goal cliff based on a quarterly quota and a profit-sharing model if HigherPeople hits 100% of our annual target. This combines a short-term KPI with commissions and a long-term KPI in profit-sharing. 

How did you present your sales leadership compensation package to your final candidate?

We came up with three options, which we recommend for early-stage startups. Candidates love it because they feel like they are in control. It allows them to say they care most about equity or a high-base option. 

What did you learn from this hiring and comp planning process?

First, we learned to be nimble on the overall package. What we thought someone would be excited about ended up being different than what candidates really wanted.

Secondly, we learned people really want equity. If companies don’t want to do equity, profit sharing is a much better alternative. They see that money sooner and it’s a much lower-risk option for the business because you’re not giving any percentage away of your company. 

Third, to find the best people, you have to interview various levels of experience. This will help you learn what you want and need.

Lastly, what advice would give startups looking to make their first sales hire?

Titles: Startups are quick to say, “I need a CRO!” as their first hire. But you have to break this down. We went with “head of” because it encompasses someone who is a hunter and someone who is strategic. Early-stage companies sometimes inflate job titles and roles. This can hurt you. CROs don’t expect to be AEs, nor should they. So be careful about titles.

Compensation: Think about short-term vs. long-term incentives and how to capitalize on both without breaking the bank. If your most important goal is to close on a big deal this quarter, then don’t give equity. But if you want them to build a 10-person sales team and formal sales process, then give them short and long-term wins. 

KPIs: Set clear KPIs from day one. Make sure they understand the expectations of the day-to-day role. 

Candidate-driven process: Talk to your candidates. Text them. Be a resource and give feedback if you don’t move forward with them. I want people to come out a raving fan of my company and of me when they go through our interview process. 

The person we moved forward with had two other higher offers and yet he went with us because of our culture and how closely we worked together throughout the process. 

Be a kind, thoughtful human that people want to work with.

* * *

Thank you Katy for sharing your insights! To learn more about HigherPeople, reach out to their team today. 

About QuotaPath

QuotaPath supports growth-stage companies with automated commission tracking and sales compensation management. Sync your CRM and manage your entire sales compensation process within QuotaPath. Increase sales comp visibility to motivate and align your teams.  
To learn more, schedule a time with our team to chat or try QuotaPath for free for 30 days.

The question of who owns compensation planning has grown increasingly puzzling amid organizational restructuring.

Should Finance, Sales, RevOps, HR, or a mix of all four own it?

Turns out, this will depend entirely on the stage and setup of your organization. 

We found in our 2023 Sales Compensation Trends survey at early-stage companies, sales leadership most often owns the process. But as organizations grow, this responsibility shifts to RevOps teams.

Additionally, we found that reps’ trust oscillates based on who builds their compensation plans. For instance, our survey indicated that reps trust sales comp plans the most when built by sales leadership. RevOps-led plans have the second most trust, and Finance with the least.

Still, we believe RevOps should take the lead if your organization includes a RevOps department. RevOps knows the data, sales behaviors, motivators, and business context more than say, Finance. 

If you don’t have a RevOps department yet, then Sales should take the lead. 

But that’s not to say building comp plans should be done in a silo. The best comp plans feature collaboration from Sales and Finance, even HR, as the plan nears finalization.

Below, we outline how to involve each department. 

Involve HR in compensation planning

Your human resources department will likely have the least amount of knowledge when it comes to the intricate comp plan mechanics of your compensation structure. However, HR can play an impactful role in providing industry rates on OTEs and salary structures. 

“Ninety percent of the battles I’ve seen unfold during the comp plan design phase occur over leaders not believing how much companies are paying their reps,” said Kevin McKeown, CRO at Beekeeper, in 4 sales compensation best practices to help you for 2023.

It’s absolutely worth your time to bring HR into the conversation early on to ensure your sales compensation packages are competitive. From there, you can work backward in designating commission rates and quotas. 

Additional Reading: Why gathering rep feedback on sales compensation plans is a RevOps must

Get a pulse check from Finance 

Before you begin drafting your compensation design, consider having a philosophical conversation with your Finance leaders about what you hope to achieve with the new plans.

“I’m coming to the table with the behaviors I’m trying to motivate and some ideas about what I think could motivate those behaviors,” said Sales Consultant Caroline Tarpey, in How Sales and Finance can work better together this comp plan season. 

This step provides an immediate pulse check to see how feasible (or off base) your initial thoughts are. 

QuotaPath VP of Finance Ryan Macia agreed.

“I prefer when Sales comes to us with options and pre-proposals,” Ryan said. “I don’t like starting from scratch. If you can come to me with some concepts that you think will motivate the team, then we can determine if it will break the bottom line.”

But don’t lean too heavily on Finance’s initial inputs. 

“When the Finance team gets too involved, they tend to think about everything from just the cost perspective,” said Kevin. “Comp planning usually goes sideways when someone without a sales mindset is driving the process.”

So, have early conversations about what you’re aiming to achieve with Finance, then begin to shape your sales compensation strategy from there. 

Another way to work well with Finance throughout this process is to run your own pressure tests before handing proposals to them. If you can break the plan ahead of time, you’re saving both yours and Finance’s time. 

What about the entire commission process?

Once you have the plans in motion, which team owns the payout process, plan, and roster changes?

This will likely fall to RevOps, Finance, or a combination of both.

Most of our admin users who run QuotaPath have an Ops background, be it Sales, Finance, or RevOps. 

And at QuotaPath, our RevOps team owns the commission calculations and plan adjustments. All of which is made easier using our own commission tracking software. 

Then, Accounting takes it over for actual commission check payouts.

So, is the answer RevOps?

Yes — and.

If your company includes a RevOps department, RevOps (in close partnership with Sales) should own the comp plan design. 

As for who owns commissions once the plan is in play, we, too, think that RevOps should own the process up until payout. 

Need help with your compensation plan?

We’ve got free resources to help with compensation planning. Start by visiting Compensation Hub, an ungated library of 20 comp plan templates that you can customize and adjust to your business model. 

From there, automate your commission tracking, by saving your plan in QuotaPath and kicking off a free 30-day trial. 

Just want to learn more about automating sales compensation management? Chat with us by scheduling a time with our team. 

Whether you believe we are already in a recession or that one is approaching, the key barometer of economic health indicates that we’re headed for one in 2023. 

As a result, go-to-market (GTM) teams have begun adjusting their GTM strategies to meet buyers dealing with budget cuts, new pain points, and increasing concerns about unnecessary spending.

When shifting sales and overall GTM strategies, it’s important to update compensation plans to match. 

Not sure how to make your comp plan fit for a recession? We have some tips to help get you started.

Align comp plans to business goals

Start your design at the C-level and with your board. Identify three to five strategic objectives for the company over the next quarter or year.

“Then ask, can any of those priorities be reinforced with sales compensation design?” Mark Roberge, Managing Director at Stage 2 Capital, said.

Sometimes you can’t.

“But sometimes you can,” Mark said. “And if you can, you do it. In my experience, that’s the No. 1 tactical implementation that will drive the strategic objective. Much more than the CEO saying this is what we’re trying to do.”

Use the commission plan to drive the selling behaviors necessary to achieve the business goals.

And, most importantly, if you change your business goals, your compensation structures should reflect that.

Add multi-year accelerators

A multi-year accelerator rewards sellers with a higher commission rate on deals with contracts that exceed 12 months.

“Multi-year deals tend to be better for the company,” said Andrew de Geofroy, SVP, of Global Revenue Platform for Quantive. “With current economic conditions, predictable revenue growth is more important toward profitability.”

In our free library of comp plan templates Compensation Hub, there are two multi-year commission structures you can adjust and customize. 

These include Single Rate Commission with Contract Term Multiplier and the Commission with Multi-Year Accelerators plans. 

By offering higher payouts on contracts exceeding one year, your reps will feel more motivated to ask for longer-term deals instead of opting for a single year. This helps boost year-over-year consistency while increasing lifetime value and reducing the competitive threat.

Focus on ICP and SPIF accordingly

An ideal customer profile (ICP) is a detailed description of an account that can benefit most from your solution. It helps sellers recognize and focus on accounts with the highest lifetime value potential.

Although your sales compensation plan may be aligned with your business goals, sometimes a short-term reward like a SPIF is necessary to motivate a desired behavior of quota-carrying teams, like salespeople, customer service reps, and sales engineers.

Sales teams can provide SPIFs, or bonuses, in addition to their standard compensation for deals that meet ICP. For example, earn 10% on the deal and an extra $100 bonus if the customer counts as ICP.

Up your commission rate for expansions

Those who have bought your product are most likely to buy it again. 

Encourage your AMs or AEs, whoever gets attainment and commissions on expansions, to expand existing accounts with a higher commission rate than what you currently pay.

For example, most rates on expansions are less than the standard rate for new accounts, such as 3% on expansions versus 10% on new business.

Pressure test it first, but see if you can double the expansion rate to encourage reps to spend more time there. A few ways to pressure test are to:

•  Run sensitivity analysis on each component test against variables such as Quota to OTE, actual commission rates, and multipliers.
•  Run scenarios based on next year’s revenue assumptions
• Apply last year’s numbers

Adjust OTEs to realistic, attainable numbers

On-target earnings (OTEs) represent the total amount of money, including base salary plus commissions, a sales rep or account executive (AE) can earn in a 12-month period if they hit 100 percent of their quota.

This figure has become more important for top talent attraction and acquisition. The higher the OTE, the greater the chance a recruit accepts the offer over another.

But one thing to remember is that OTEs are not guaranteed. It’s important to ensure they are realistic or attainable. Otherwise, you risk high rep turnover, which can be quite costly.

A great way to determine if your OTE is realistic, attainable, and competitive with industry rates is to calculate the Quota:OTE ratio using our free calculator.  Use the calculator to determine if your reps are paid well and pay for their role in performance. 

Calculate OTE:Quota ratios

Use this free calculator to ensure your reps’ on-target earnings and quotas mirror what they’re bringing in for the business.

Try it now

Make your comp plan fit for a recession

Regardless of what you believe about the approach or the presence of a recession, it’s important to adapt to changing market conditions.

Review your GTM strategy and make changes where necessary to put your organization in the best possible position. Evaluate your compensation strategy and make sure it aligns with those adjustments. 

Also, remember that as critical as it is to change as the market shifts, save major compensation adjustments for the end of the quarter. Changing partway through a period can be too disruptive and damage trust amongst your sellers. We are in this together.

If you need more help adjusting your comp plan, leverage one of our many comp plans in our free Compensation Hub or book a time with Graham Collins, our Chief of Staff and resident sales nerd.

This is a guest post written by RevPartners, a management and consulting firm that designs and executes revenue engines to supercharge their customers’ growth with services such as HubSpot Onboarding, RevOps as Service, and SEO/PPC. The RevPartners team orchestrates, optimizes, and reports on their client’s marketing, sales, and operations processes through automation and tools. RevPartners’ mission is to democratize Revenue Operations as a Service, empowering the 99% to experience the benefit of RevOps. 

Keep it simple

Many people are drawn to commission-based (or variable pay) careers. The thought of being in control of how much you can earn based on your own hustle level seems like the ultimate motivator. The more you sell, the more you earn. Simple.

Unfortunately, “simple” is often out of style. Many companies today have found ways to take the relatively basic concept of “sell more = earn more”, and muck it up beyond all recognition.  

Here’s a collection of some of the worst comp plans around with the trigger warning that if you are a fan of common sense, you are about to be highly offended.

Terrible, horrible, no good, very bad sales compensation plans   

Commission floors/cliffs

What is this?

Imagine you’re in school taking a test and you answered 6 out of 10 questions correctly. What grade would you expect? A 60%, obviously. But what if the teacher had some bizarre rule where you had to achieve a score of at least 70% on an exam, or else you automatically received a 0%. Now you have a taste of what a sales commission floor (or cliff) is.

An official definition is: when a sales rep is required to hit a minimum target to earn any commission.     

Why is it bad?

A few reasons…

1. When a company chooses punishment as a motivating factor they will experience a high rate of churn.

2. It can lead to sales reps just trying to reach the minimum target as opposed to hitting 100%.

3. It encourages “sandbagging”. In other words, when it’s near the end of a monthly or quarterly quota, and a sales rep knows that a sale won’t help them hit their numbers, they’ll just hang onto the sale so that it can help them for the next sales cycle.

Can this type of plan ever be ok to use?

Plans with commission floors work best for account management/account renewal roles as well as sales executives. For AEs, however, we recommend staying away. 

Non-standardized plans

What is this?

Imagine, again, that you’re back in school and for some of the students in your history class the lowest ‘A’ cut-off is 90%, but for other students the lowest ‘A’ cut-off is 80%.  Same grade level, same class, different grade structure. Welcome to how it feels in the world of non-standardized commission plans.

An official definition: when people in the same company, working in the same role have different quotas, different on-target earnings (OTEs), and different commission structures.

Why is it bad?

It fails to foster an equitable work environment.

Can this type of plan ever be ok to use?

Because some sales reps will be brand new, and some will have a decade of experience, it’s expected that some OTEs will be higher than others. The fix for this is to create different “levels” or “tiers” such as junior and senior account executives. While plans would be standardized within a given level, they could differ from one level to another.

Ever-changing plans

What is this

I’m really feeling these school examples. Imagine a class where the policies, procedures, and expectations of the teacher changed every month. It would be confusing. A comp plan structure that is constantly being changed would feel the same way.

An official definition: when a comp plan is changed every quarter or month.

Why is it bad?

Employee morale and confidence drop when plan structures are frequently changed. This drop is sharper the more often it’s done (i.e. quarterly changes produce less confidence than yearly ones).

Can this type of plan ever be ok to use?

Fun holidays or monthly contests, in the form of SPIFs, can provide brief alterations to a plan’s structure without changing the whole thing. But, especially in a volatile market, you may need to adjust a plan mid-way through the year. If this is the case, be sure to communicate with your reps, gather feedback, and roll changes out following this example compensation communication plan. 

Unattainable OTEs 

What is this?

It’s the first day of school and your science teacher announces that anyone who earns 100% for the first quarter gets a free homework pass for the rest of the year. You’re pumped, this is great news!  

Then, after talking to some former students of this teacher, you find out that only 2 students in the last 10 years have actually accomplished this feat. That punch in the stomach is what it feels like when you start working for a company only to realize that the OTE you were so excited about is a pie-in-the-sky fantasy.

An official definition:  when a company advertises an impressive on-target earnings potential, usually in an effort to draw high-talent candidates, that is not realistically achievable. An unobtainable OTE is often the result of a sales quota being too high, a disproportionate base salary to variable pay mix, an inferior product, and/or a lack of quality sales training.

Calculate OTE:Quota ratios

Use this free calculator to ensure your reps’ on-target earnings and quotas mirror what they’re bringing in for the business.

Try it now

Why is it bad?

It’s deceitful and kills employee motivation. While it’s true that people enjoy the feeling of accomplishing difficult tasks, no one enjoys putting in maximum effort for something that’s borderline impossible.

Can this type of plan ever be ok to use?

Not generally. It’s more than fine to advertise very high OTEs if they are actually attainable, but the employer should be honest during the interview process regarding what their average rep earns.

The never-ending story  

What is this?

When a teacher passes out a syllabus on the first day of class, it’s usually a page long with a few, key highlights. We’ve all had the experience, though, of a teacher who found it necessary to create a 24-page document highlighting how every minute of every day will go. If you’ve experienced this, then it’s not hard to imagine why a comp plan that is 40+ pages long is a terrible idea.

An official definition: A very long, overly-detailed explanation (including all exceptions and charts) of how every single component in a comp plan will work.  

Why is it bad?

A good comp plan will lay out what behaviors you want from your reps. If your comp plan is too long, then it’s too complicated to understand exactly what’s expected. Result: it likely won’t work.  

Can this type of plan ever be ok to use?

If the actual basis of the comp plan is solid and can be reduced to about a 3-page explanation and just a few examples, then yes.

Capped commission  

What is this?

Last bad comp plan, last (bad) school analogy.  

What if a teacher told a young student that each time they read a book, they would learn new things; however, this rule would only apply to the first 10 books they read. They could read 50 books, but books 11-50 would yield no new gains in knowledge. That young student would have little motivation to read more than 10 books. That’s a glimpse into the concept behind capped commissions.

An official definition:  when there is a ceiling to what you can earn when you generate revenue over a certain point. 

Why is it bad?

It’s demotivating and stunts the growth of sales reps. This may be the only comp plan that has no redeeming value.  

Bottom line: there is no debate between capped vs. uncapped commissions. Commissions should always be uncapped. 

Can this type of plan ever be ok to use?

No.  Just…no.

How to get comp planning right

Bad comp plans are a reality, but they don’t have to be.  

Knowing what not to do is a good first step toward building a simple, fair, and logical comp plan.  For comp plan templates that you can customize to align with your business model, visit QuotaPath’s free resources, Compensation Hub. Find a plan you like, then save it, and start a free trial in QuotaPath to see it automated. 

Once that comp plan is in place, QuotaPath’s seamless HubSpot integration will automate commissions and help your RevOps processes.  

To learn more about RevPartners, visit revpartners.io.

This specialist sales job combines business studies, tech knowledge, and customer service. The result is a dynamic profession in technical sales that’s as demanding as it is rewarding. Interested in mixing a love of applied science, computer, and automation with the more people-driven side of the business? Then a career in tech sales as a sales engineer could be just the ticket.

What is a sales engineer?

Sales engineers are essentially specialists focused on selling complex technology or advanced scientific products and services. Though they must be skilled at the actual act of selling, sales engineers also put an enormous amount of effort into product education. This may include memorizing a laundry list of specifications or studying the ins and outs of cutting-edge concepts. The goal is a level of proficiency that makes it easy to explain the benefits to potential clients.

Companies often choose to take a team approach to technical sales. In those cases, a sales engineer zeroes in on the tech aspects of the sale, while a more generalized salesperson oversees the overall account.

What makes a good sales engineer?

A career in SaaS sales is exciting, but it can also be stressful. In addition to the ever-present need to meet sales quotas, there’s the pressing desire to generate deals and bring home a hefty commission. Being a sales engineer requires:

• An adaptive personality: In sales, you never know what the next day might bring. An ability to roll with the punches is a valuable skill to have.
• Patience: Sometimes prospects will stand you up. Sometimes you’ll lose a major deal. It’s good to be ambitious, but learning when to take a deep breath and wait it out is also important.
• People skills: Can you listen as much as you talk? Are you able to make people comfortable quickly, so they’re ready to open up and spend? Do you come across as trustworthy? All these characteristics could influence whether you make a sale or not.
• Nerves of steel: Sales engineers need to be comfortable speaking in front of people. This may include presenting a product to a crowd.
• In-depth product knowledge: It’s not enough to just memorize marketing materials. Sales engineers also must be able to offer accurate answers to any questions customers may have.
• Sales knowledge: Not only must sales engineers present key information clearly, they almost use that info to help drive sales. That requires familiarity with the entire sales process from awareness to closing.

What does a sales engineer do

The fluid nature of sales careers means there really is no “typical day” for sales engineers. That said, there are some job responsibilities that are fairly common.

Research & development

While sales engineers are hired to help sell, their technical expertise makes them the go-to person for all kinds of tech issues. They could be called in to help at every level of the research, development, manufacturing, and marketing processes. This includes assisting with a competitive analysis to see how proprietary models stack up against other industry players.

Technical presentations

This is the tech segment of the sales pitch. There is often a verbal presentation combined with visual support such as graphs, blueprints, spec sheets, etc.

Product demonstrations

Some technical and scientific concepts have to be seen to be understood. Sales engineers may do a product demo while describing how that product could add value or otherwise benefit the client.

Marketing

Sales copy must be accurate. Sales engineers help by fact-checking freelance content and working alongside the marketing team to develop unique selling propositions (USPs). They may even write white papers or blogs to offer a professional perspective on tech topics.

Q & A

When prospects have questions, sales engineers deliver the answers. These questions are often general in nature. But they still may need to call on their knowledge and experience to explain how products benefit a specific client. This could happen during the sales process or they may offer support to existing customers as well.

Chit chat

It might not seem like it from the outside, but all the small talk that comes with a sales job is important. Conversations are how you establish a rapport and offer clients insight that proves your worth and encourages conversion.

Special events

From trade shows and conventions to press conferences and product launches, it’s important that sales events go off without a hitch. Sales engineers help by sharing information and running demos.

According to the U.S. Bureau of Labor Statistics, the average sales engineer OTE (on-target earnings) in the United States in 2019 was $103,900 per year. This figure includes the base salary of $63,875 according to Adzuna. This is good news for anyone interested in exploring a career in sales engineering. Even better, the field is projected to grow about 6% between 2018 and 2028 (about on par with the average occupational growth rate).

Do sales engineers normally make commissions?

Sales engineers often receive commissions, especially in SaaS, but their compensation structure differs from traditional sales reps.

Their pay typically includes:

Base Salary – Sales engineers (SEs) usually have a higher base salary than account executives (AEs) because their role requires technical expertise and support rather than direct selling.

Bonuses or Performance-Based Incentives – Instead of a percentage-based commission, many SEs earn performance bonuses tied to deal support, customer demos, or team revenue targets.

Team-Based Commission – Some companies structure SE commissions as a shared percentage of deals closed by the sales team they support.

Deal Participation – If an SE is heavily involved in complex enterprise deals, they may receive a fixed commission per deal or a percentage of total revenue influenced.

Quota-Based Structure – In some cases, SEs have individual quotas (e.g., pre-sales demo success rate, proof-of-concept completions) that impact their variable compensation.

Free Sales Commission Calculator Template

A free spreadsheet to simplify the commission tracking process. Track what you or your team have earned in 4 inputs.

Download Now

Sales engineer job responsibilities

A Sales Engineer (SE) is a hybrid role that combines technical expertise with sales acumen to help businesses sell complex products and solutions. Their key responsibilities include:

1. Pre-Sales Support: Work with account executives to qualify prospects and understand customer needs.
2. Technical Demonstrations: Conduct product demos, proof-of-concept (PoC) presentations, and technical deep dives.
3. Solution Customization: Tailor solutions to meet specific customer requirements, addressing technical challenges.
4. Product Knowledge & Training: Stay updated on product capabilities and train both customers and internal sales teams.
5. Collaboration with Product & Engineering Teams: Provide feedback on product enhancements based on customer needs.
6. Proposal & RFP Support: Assist in responding to requests for proposals (RFPs) and creating detailed technical proposals.
7. Post-Sales Handoff: Ensure a smooth transition from sales to implementation, helping with onboarding if needed.

How to become a sales engineer

To become a Sales Engineer (SE), start by earning a relevant degree in engineering, computer science, or a technical field, though some SEs come from business backgrounds with strong technical expertise.

Hands-on experience in technical roles such as technical support, product management, or software development can help build a deep understanding of industry-specific solutions. Since SEs bridge the gap between sales and technology, strong communication and sales skills are essential.

Learning how to translate complex technical concepts into business value through presentations, demos, and customer conversations is key. Familiarity with CRM platforms like HubSpot or Salesforce and sales automation tools will also be beneficial.

While not required, obtaining industry certifications such as AWS Solutions Architect, Cisco CCNA, or Google Cloud certifications can improve credibility and career prospects. Many SEs start in entry-level roles like Sales Development Representatives (SDRs) or Solution Consultants before transitioning into a full SE position. By developing both technical expertise and sales acumen, aspiring sales engineers can position themselves for success in this highly sought-after role.

What is the sales engineer career track?

A job as a sales engineer starts in college. Many employers look for applicants who are graduates of engineering programs. A bachelor’s degree is important to some recruiters; others are more interested in an applicant’s technical training.

Like most professions, sales jobs have a certain trajectory that takes newbies up the career ladder one rung at a time. For a sales engineer, the starting line could be an Associate Sales Engineer position or ASE. These positions typically report to a more senior sales engineer and/or as part of a large corporate sales department. Sometimes, they’re the sole SE at a smaller company.

Next up is a promotion to a Corporate Sales Engineer (CSE) position. With the new job title comes a new tier of clients and extra job duties. CSEs handle more valuable accounts and may be responsible for increasingly complex tasks. A CSE may be a team leader. They may also work under a Senior CSE who serves as the point person for a large account.

One of the most attractive aspects of a career as a sales engineer is that there are countless opportunities outside the traditional trajectory. For example, sales engineers may freelance in product development or focus on customer service. They may also devote their entire career to research used to power other aspects of the sales process.

So, what is a sales engineer? Sales engineers are problem solvers, but they’re also expert communicators. If you’re looking to build a better sales team, consider bringing on an SE.

For more ways to make sales reps’ lives easier, automate commission tracking and sales compensation, and start QuotaPath’s free 30-day trial.

Running an effective sales division requires organization. Let your reps operate completely independently, and you’ve all but guaranteed chaos. Multiple reps pitching the same prospect, and high-potential clients being ignored — and those are just two disastrous scenarios; there are plenty of others.

To ensure efficiency and set your team up for success, get strategic about managing sales territories.

Here are the four best ways to divide sales territories and why making a plan matters.

What is a sales territory?

A sales territory is a defined area in which a single salesperson or group of salespeople work. That defined area can take on different shapes and forms. As you’ll see below, not all sales territories fit a neat geographic structure. Depending on the size of the territory, there may be one person handling all the area’s clients. If it’s a large territory, there may be several salespeople as well as a sales manager sharing the responsibility.

Historically, sales territories tended to follow established geographical shapes. Sales reps might have worked in certain states or known that they “own” the area south of a particular point. Today, territory management has evolved and become more complex. It may be harder to create balanced territories, but the results are worth the investment.

Why sales territories are useful

As companies grow, they need to divide up accounts in a manageable way. Sales territories provide clear-cut boundaries, so there’s no confusion about which sales rep works with which client. This is crucial for several reasons:

• To prevent under-servicing. When a salesperson is stretched too thin, client relations suffer. Orders slip through the cracks, there may not be time to follow up on leads, and calls go unreturned. Under-servicing can have a snowball effect, and the more reps make mistakes, the further behind they fall.
• To prevent over-servicing. While clients don’t like being ignored, they don’t like being pestered either. A sales rep who relies on just a few accounts may have to be very aggressive just to make a livable commission.
• To keep talented salespeople happy. It’s an awful feeling to fall short of your sales goals. Even worse is when that happens because you weren’t given the opportunity to succeed. Balanced sales territories give everyone a chance to maximize their compensation.
• To motivate and boost morale. Giving a sales rep their own territory establishes ownership; they’re in charge of their piece of the pie. It’s their responsibility to make sales happen. They have a quota to meet and leads to generate and nurture. They know they’ll have to explain their progress to the higher-ups, and that’s invigorating.

Four ways to divide sales territories

There are countless ways to oversee sales territory alignment, but these are the four most common.

1. Geographically

One of the most popular ways to structure a sales territory plan is to divide up accounts according to geographic location. This could be as simple as setting boundaries to preexisting criteria, such as zip codes or states. Using this method makes it easy to define the exact parameters of each territory, and it’s equally easy to make changes.

On the other hand, geographically delimited territories are tough to make equal. One area may include a bustling industrial center, while the other could be largely residential. California has 53 Fortune 500 companies, Kentucky has 1. This kind of imbalance could be frustrating for sales reps and clients alike. You end up with some reps racking up huge commissions but also dealing with enormous amounts of stress. Conversely, their colleagues who got the shorter end of the stick can’t make ends meet, which breeds resentment and discord.

Geographic territory planning could create travel-related issues for outside sales teams. Depending on where your HQ is located, some reps may have to commute much further than others. That means some of your team will automatically be required to invest more time.

2. Company size

The second option is to assign sales territories based on company size. Rather than looking at the big picture and slicing up the map, reps are paired up with specific accounts. How that matching process works depends on a number of factors, but one perk of this approach is that it allows for seniority. Senior reps who have proven track records get the larger accounts and junior reps get their feet wet working with smaller clients.

Dividing up territories according to company size also allows for predictability of contract size and a lot of segmentation. Categorizing accounts by size, such as global enterprise, mid-sized business and small business, prevents coverage gaps. It also makes it easier to assign the right rep to the right account.

Of course, all this goes out the window if a company suddenly changes size. Organizations that close a branch or two or acquire another business may shrink or expand practically overnight. When that happens, your territories will need to be adjusted accordingly. Both the initial segmentation and future changes are only as accurate as the data you source.

It can be difficult to find reliable information about company sizes, and you may find yourself relying on educated guesses. Using sales history to predict future potential is a smart way to go, but you’re still operating on conjecture rather than data.

3. Industry

When you organize sales territories according to industry, you empower sales reps to specialize in a particular niche. This gives them the ability to study industry-relevant topics and, more easily, establish and build a rapport with their clients. The sales plan for that area can ditch more generic messaging and tailor marketing materials and pitches to the industry.

This angle becomes problematic when there are companies that span several industries. For example, a technology firm with both agriculture and educational applications may need reps for both divisions. Another issue: some industries are more or less likely to buy, creating unpredictable territorial inequities.

4. Alphabetical

Organizing territories alphabetically splits the difference between assigning territories totally at random and having a strategic territory plan. Go this route and everyone gets an opportunity to work with businesses of all sizes and across all industries and locations. If a client changes its name, it’s easy to tweak your territory alignment. Other changes, such as company size or physical relocation of their brick-and-mortar store, don’t matter.

But as easy as alphabetizing territories can be, it’s a pretty uninspired system. You may end up with sales reps in charge of accounts they aren’t prepared to tackle. Some salespeople may have fifty huge accounts with endless potential. Others could be stuck with five tiny companies just because their names all start with the letter “J.”

If you do decide to divide up your sales territories according to the alphabet, establish some ground rules. Do articles like “The” count? Everyone needs to know whether “The Eastman Kodak Company” will be filed under “T” or “E.”

Proper sales territory management can be a vital part of boosting morale. It can also help increase your customer base and raise customer satisfaction. To keep your business on track, consider using commission tracking software to see where sales are coming from. Finding data-backed ways to determine sales targets and allocate your resources could be just what you need to optimize performance. Sign up for QuotaPath for free today.