Over the years, I’ve worked on software applied to subjects as diverse as nuclear engineering, email processing, data mining, CRM systems, or enterprise migration. Like you, I’m a engineer at heart, with a deep passion for coding. I’m usually more excited about technology and innovation than about business topics.
Yet, when my co-founder and I bootstrapped a data migration migration from 2 to 100+ employees, our growth forced me to design systems able to manage sales activities. More importantly, our growth helped me better understand what, as an engineer, I failed to understand about sales. Here are 3 things I learned (and why I decided to automate sales commissions).
#1 – Sales Logic Is Not Engineering Logic
The rules by which sales departments operate don’t follow “engineering logic”. For example, suppose someone told you the following:
- Your quarterly bonus will be based on the number of lines of code you write (it doesn’t matter if they aren’t very efficient).
- If you write 100K lines of code this quarter, you will need to write 120K lines of code next quarter to qualify for a bonus.
- If you end up taking ownership of too many components, we will split responsibilities and reassign some of them to your peers.
Seems a bit off? Yet, this is the equivalent in sales:
- Your quarterly commission will be based on total revenue (even if profit is limited because of granted discounts).
- If you reach 100K in revenue this quarter, you will need to reach a new 120K revenue quota next quarter to earn a commission.
- If you end up owning accounts worth more than 1 million dollars, we will split your territory and reassign some of your accounts to other representatives.
Does that make sense? It might not from an engineer’s point of view, but it does from a business perspective because it keeps things simple and promotes revenue growth (and so the company’s value) over efficiency.
#2 – Product Issues Means Sales Drama
In most sales environments, sales representatives are focused on one thing only – their commission. They really don’t care about the underlying technology, how the product is built, whether it’s innovative, what code coverage is like, etc.
However, one thing they do care (a lot) about whether the product will fail during a demo or actual customer deployment. So, should your solution experience some technical issues (which one doesn’t?), expect special hate from affected sales representatives. Things get ugly when sales commissions are being “threatened” by engineering issues. And to be fair, it’s not uncommon for customers to call their sales account manager before attempting to investigate or contact support.
In short, technical issues can erode trust between the sales team and the engineering team (often without the engineering team realizing this is even happening). This doesn’t matter in a large company, but it can make small companies miserable.
#3 – Sales Employees Have a Different Mindset
In most engineering teams, there is a sense of belief in the company and product. However, most sales employees don’t care about the mission – they care about the commission. In engineering, there usually also is a high degree of discipline. In sales, working hours don’t matter – only results. This is why you’ll often see sales employees take off at 2 PM for no apparent reason. Perhaps it’s because their customers are all in a different time zone and are no longer available. Or perhaps it’s because the sales employee prefers “catching up” later.
As a result of a setup which is mercenary by design, most sales employees rotate jobs every 1-2 years because they’ve found an opportunity for larger commissions somewhere else. Or because someone decided they were too successful, and so reassigned their accounts, split their territory, and raised their quotas to unreasonable levels.
So don’t expect most sales employees to love their product or embrace a mission – most sales setup don’t encourage it. There isn’t a lot of fairness in many sales environment because the focus is not on people or products but on revenue growth.
Every sales department operates differently. Some of the things I’ve learned likely don’t apply to your environment. But next time you have a coffee chat with your friendly sales representative, I hope you’ll have a kind thought for them.