How to Make a Sales Engineer Commission Plan (Plus FAQs)

Sales engineers are an asset to companies that market products requiring technical knowledge. These engineers have a double nature: one aspect relates to the actual product, and the other one is linked to sales.

The compensation of sales engineers comprises a base salary plus commissions and other incentives. The individual sales engineer commission is typically tied to the performance of a team as a whole. This ensures that such engineers work along with the rest to achieve enterprise objectives.

Sales engineers are a vital part of any company that creates technologically advanced products. They educate prospects, explain tech specs, and outline how the product features will work.

As with other sales professionals, sales engineers also earn commissions. A common break-up is 80 percent salary and 20 percent commission. This is based on pre-established quotas.

A technical sales engineer's salary depends on many factors like location, experience, expertise, and, of course, size and type of company.

Now, let’s explore in greater detail the expectations of a sales engineer, the salary, and the nature of the sales engineer's commission.

How to Create a Commission Plan for Sales Engineers

A sales engineer is specialized in selling products and services that are technologically advanced. This means that not only should they have sales skills, but they must also be proficient in the details of what is being sold.

Sales engineers often have to put a lot of time and work into understanding the product. They should not only be completely familiar with the specifications and features but clearly explain these in terms of benefits to the prospective customer.

Often, a sales engineer works in partnership with other sales personnel. The others oversee the general sales aspects, while the sales engineer focuses on the technical issues.

Clearly, sales engineers are an integral part of the salesforce.

To attract the best sales engineers, companies should create an environment in which they flourish. They should be able to work in tandem with other teams and given chances to display expertise to would-be clients.

Naturally, the commission plan matters, too.

Let’s look at the best way to create a compensation package for sales engineers:

1. Keep it simple

The first principle is to have a sales engineer commission and package that is easy to understand.

Employers should ask themselves questions like:

• Who the plan is structured for: is it for specific teams, departments, or individual reps?
• Is it to actively get new customers, attract talent or grow faster?
  

Likewise, sales engineers should be clear about where the commission plan will be applied. Some factors apply across all sales territories and teams or a part of them.

Additionally, if you make changes to the commission plan, the reasons should be communicated, along with the specific dates.

2. Offer a higher base salary

A higher base salary is generally viewed as a smarter way to attract and motivate the best sales engineers. This is because they’re then guaranteed a certain amount that they can plan their expenses against.

This is also because the commission is often based on factors that may not be within the sales engineer’s control.

For example, there could be a seasonal sales cycle, tremendous competitive activity, or even shifts in technology.

3. Tie KPIs to company or team achievements

Benefits that are over and above the base salary are typically tied to sales KPIs. The best-performing organizations often link these KPIs to company or team achievements.

The benefit?

Doing this means that every individual is clear about overall management goals.

It also ensures that individuals function as part of a group and do not pursue separate objectives. This helps in sharing expertise and problem-solving and showcases future managerial potential.

4. Leverage management-based objectives (MBOs)

MBOs align the entire company toward a specific goal. You can also use it alongside KPIs to measure sales engineers’ performance.

And while KPIs measure ongoing performance, MBOs show progress toward a pre-defined purpose.

Moreover, each employee can be clear about the specific objective and the part that they have to play in achieving it.

Want to learn more about MBOs?

Check out our 5-step guide for creating MBOs.

What is the Average Sales Engineer Compensation?

The average salary of a sales engineer in the United States is around 76,249 USD annually. It ranges from 67,513 USD to 85,090 USD per year.

(The figures mentioned above only represent an average of the lowest and highest average salaries. The actual range may be different.)

Naturally, this can vary based on factors like location, experience, and more. A pre-sales engineer will earn less, for instance.

Let’s take a closer look at how the average compensation and commission vary across different company sizes.

1. SMB Sales Engineer Compensation

The highest average total compensation for SMB sales engineers is 127.3K USD.

The break-up of this sales engineering salary package was as follows.

• Base salary: 93,053 USD
• Commission: 34,292 USD
• Signing + Stock bonus: 11,585 USD

2. Mid-Market Sales Engineer Compensation

The compensation for a mid-market sales engineer is 158,761 USD.

The components of this package were:

• Base salary: 111,756 USD
• Commission: 40,273 USD
• Signing + Stock bonus: 6,732 USD

3. Enterprise Sales Engineer Compensation

Finally, let’s turn to the total compensation for an enterprise sales engineer. This was estimated at 195,573 USD.

The break-up:

• Base salary: 133,541 USD
• Commission: 47,458 USD
• Signing + Stock bonus: 14,574 USD
  

Among the companies that pay the highest salaries to sales engineers are those that understand their role and importance. These companies nurture sales engineers and create opportunities for them to shine.

For example, Microsoft, Google, and Amazon Web Services are known for a higher senior sales engineer salary.

3 Key FAQs About Sales Engineers

Here are three commonly asked questions about sales engineers:

1. What makes a good sales engineer?

Many factors combine to create sales engineers who are great at their jobs. Some of these are sales skills, and others are related to technical expertise.

Sales engineers should have empathy, the ability to understand other points of view, and the quality of deep listening. They should have patience and be able to get over setbacks. They should inspire loyalty and build relationships.

Sales engineers should also have deep product knowledge. They should be aware of technological changes, and their benefits and be able to answer questions about these aspects. They should be comfortable and confident about presenting this to clients and creating trust.

2. What are the day-to-day activities of a top sales engineer?

A typical day in the life of a sales engineer can vary depending on the nature of the company and seniority.

In general, these are the activities that sales engineers engage in:

• R&D: Because of their knowledge, sales engineers can help with product development. They could be involved in checking and testing beta models as well as competitive products.
  
• Technical presentations and demos: Sales engineers need to take charge of the technical aspects of sales presentations. Here, they’ll have to explain specific tech issues related to the product.
  
• Marketing: Sales engineers can also be called on to advise marketing efforts. They have to check advertising and promotional copy to ensure that proper claims are made.
  
• Relationships: Sales engineers also have to build trust with prospective clients. This means chatting with them about the product, answering questions that arise, and creating confidence in their abilities.
  
• Special events: At times, sales engineers also have to attend trade fairs and conventions. They’ll be expected to demonstrate products and share relevant information.

3. Do Sales Engineers have quotas?

Generally, yes.

However, the quota structure depends on the company. There can be pool bonuses and traditional commissions, for example.

In a pool bonus, the focus is on the achievements of a specific team or department. A sum of money is kept aside for this purpose and distributed based on team and individual performance.

In a traditional commission, sales engineers are judged on the deals that they close. Often, they’re paired with regular sales executives who are also working towards the same deals.

Wrapping Up

It’s no secret that clear and rewarding packages attract top performers.  

And sales engineers are a specialized breed. They add considerable value to the sales efforts of companies that create technical products.

That’s why you need to create an effective sales engineer commission plan.

Sign up for ElevateHQ today and design the right commission structure for your sales engineers with ease!