Compensating the Specialist Sales Role

183:906269490 • August 26, 2024

Exploring the intricacies of sales compensation for specialists

In my first and second posts on role-specific compensation, I discussed the changing landscape of the two most recognizable sales roles—inside sales and field sales. But as you likely know from experience, sales organizations are complex, and it often takes more than a phone call and a handshake to close a deal. In this post, I'll talk about sales specialists and some things to consider when planning for their compensation.

What are Specialist Sales Roles?

Specialist sales roles encompass a diverse array of positions, each tailored to address specific market segments, industry verticals, or product categories. Here are a few examples of specialist sales roles commonly found across various industries:

1. Technology Solutions Specialist: These professionals focus on selling complex technological solutions, such as enterprise software, cloud services, cybersecurity solutions, or IT infrastructure. They possess in-depth knowledge of the latest technological trends, understand the unique challenges faced by their clients, and recommend tailored solutions to meet their needs.

2. Medical Device Sales Representative: Medical device sales representatives specialize in selling medical equipment, devices, and supplies to healthcare providers, hospitals, clinics, and other medical facilities. They are well-versed in the features and functionalities of medical devices, understand regulatory requirements, and work closely with healthcare professionals to recommend the most suitable products for their patients' needs.

3. Financial Services Advisor: Financial services advisors specialize in offering financial products and services, such as investment portfolios, insurance policies, retirement plans, and wealth management solutions. They assess clients' financial goals, risk tolerance, and investment preferences to develop personalized financial strategies and recommendations.

4. Pharmaceutical Sales: Pharmaceutical sales specialists focus on promoting and selling prescription medications and pharmaceutical products to healthcare professionals, including physicians, pharmacists, and hospitals. They possess in-depth knowledge of pharmaceutical products, clinical trials, and regulatory guidelines, and play a crucial role in educating healthcare providers about the benefits and uses of specific medications.

5. Industrial Equipment Sales Engineer: Industrial equipment sales engineers specialize in selling machinery, equipment, and industrial solutions to manufacturing companies, construction firms, and industrial facilities. They understand the technical specifications and functionalities of industrial equipment, conduct product demonstrations, and provide technical support to clients throughout the sales process.

6. Real Estate Investment Sales Broker: Real estate investment sales brokers specialize in facilitating the purchase and sale of commercial real estate properties, including office buildings, retail centers, multifamily complexes, and industrial facilities. They work closely with investors, developers, and property owners to identify lucrative investment opportunities.

These are just a few examples of specialist sales roles, and the list is by no means exhaustive. But because of the specialized nature of their role and the specific value they provide, one thing they do have in common is the need for careful deliberation when crafting a compensation plan that represents the value they bring as well as keeps them motivated in alignment with organizational goals.

The above jobs are examples of specialist roles in specific industries and scenarios. Each organization will have differing types of technical, scientific, or uniquely specialized knowledge roles that are needed in the sales process. These jobs support direct salespeople, inside sales, marketing, and/or management in the pursuit of profitable revenue.

The defining component of a specialist is that they generally don't own the client or prospect relationship, but they support the act or process of selling with their expertise.

How Specialists are Deployed

Sometimes, problems with crediting a sale happen as a result of flaws in the original job design, which is why it's so important, whenever making a change to your plan, to go back and review everything from the bottom up. This means assessing your coverage model and the alignment to strategy.

The role's job design needs to be clearly articulated and aligned with the goals of the organization. How they interact with other sales roles and with the customer should be clearly described. It's important that all members of the sales organization understand the rules of engagement when it comes to how a sales specialist resource is deployed. That includes clarification on the specialist's roles in the sales process and whether they are involved in pre-sale or post-sale functions as well.

Assuming you have all of these details documented and transparent to the whole team, some other factors that come into account when crediting a sale involving a specialist are the type of specialist, the teaming requirements, and the level of customization of the solution required.

On-demand versus Dedicated specialists

Sales specialists who are dedicated to specific teams or projects tend to have a deeper level of expertise, whereas on-demand specialists are flexible enough to provide support as needed. Dedicated specialists typically play a critical role in achieving sales targets and may require extensive collaboration with primary sales representatives. On-demand specialists, on the other hand, offer more flexibility and may be deployed opportunistically based on customer needs or market opportunities. The organization structure can show up in the form of centralized resources or territorial/account-assigned specialists.

Teaming Requirements

The level of teaming required for sales specialists varies depending on the nature of the offering and the complexity of the project, solution, or service being produced for the consumer or business. Some offerings may require extensive collaboration among multiple team members, such as designing custom solutions that involve sales representatives, pre-sales engineers, and solution specialists. Other offerings may allow sales representatives to sell independently but seek assistance from specialists as needed.

Level of Customization

Sales specialists may be involved in selling customized solutions that require tailored approaches to meet customer needs, or they may focus on selling standardized products with predefined features and specifications that simply require greater levels of communication and support than the primary sales role has expertise in. Custom solutions typically involve more complex interactions with customers and may require greater collaboration between sales representatives and specialists.

Crediting the Sale

It's highly likely, in a more complex sales environment, that you're going to have to credit sales on an individual basis based on any number of combinations of the above factors. With that in mind, it's difficult to give a straight answer as to how you should credit a sales specialist at any given time. The answer would be: It depends.

However, here are three scenarios to use as examples to further illustrate what we've been talking about:

Scenario 1: Dedicated Solution Specialist

Availability: Dedicated

Teaming: Required

Customization: High

A technology company has a dedicated solution specialist who works closely with sales representatives to design customized solutions for all clients opportunities. The solution specialist is readily available to the sales team and plays a critical role in developing tailored proposals and addressing customer requirements.

Credit Allocation: Double Crediting.: The solution specialist receives full credit for the sale, as their expertise and collaboration significantly contribute to closing the deal. The sales representative also receives full credit for their role in managing the client relationship and facilitating the sales process.

Additional Commentary: The sales position is involved in each transaction with a fixed assignment. They could be provided full credit on their portion of the custom work or the full transactions being sold (if there are multiple specialists by revenue category or product offering)

Scenario 2: On-Demand Product Specialist

Availability: On-Demand

Teaming: Optional

Customization: Low to Moderate

In this scenario, a pharmaceutical company has an on-demand product specialist who provides expertise on specific medications and treatment options. The product specialist is available to sales representatives as needed but does not require constant collaboration on every sale.

Credit Allocation: Partial Credit. The sales representative receives primary credit for the sale, as they are responsible for driving the customer engagement and closing the deal. The product specialist may receive partial credit for their involvement in providing product information and support, particularly if their expertise contributes to the customer's decision-making process.

Additional Commentary: If the position is considered necessary to the success of the sales process (or closure of business), then we could advocate for being on a sales incentive plan and receiving partial credit. If, however, their expertise is simply for training and education of the salesperson and does not interact with the client or prospect, then it is likely they wouldn't be on a sales incentive plan. As a general rule, the further from the act of selling, the less likely they should be compensated for the sale.

Scenario 3: Dedicated Territory Sales Engineer

Availability: Dedicated

Teaming: Required

Customization: Low

In this scenario, an industrial equipment manufacturer assigns a dedicated territory sales engineer to work closely with sales representatives in a specific geographic region. The sales engineer provides technical expertise and support for standard product offerings but does not engage in extensive customization for every sale.

Credit Allocation:- Partial Credit.: Both the sales representative and the territory sales engineer receive partial credit for the sale. The sales representative receives credit for managing the customer relationship and driving the sales process, while the sales engineer receives credit for their technical support and assistance in addressing customer inquiries. The allocation of credit reflects the collaborative nature of the sales process and the contributions of both team members.

Additional Commentary: Given that there is the ability to separate when the engineer is involved or not involved in a transaction, there are better capabilities for isolating the individual contributions and rewards associated with that performance (and business outcomes).

Compensating Your Sales Specialists

In terms of base only versus utilizing variable pay, a lot of consideration has to be given to, again, the rules of deployment and crediting you've designed. As with every other sales role, for specialist sales functions, you have to determine how much base salary you provide versus how much pay will be at risk.

To do this, it's important to assess the opportunity that each specialist role has. For instance, a dedicated specialist on a team that requires that specialist to participate in every sale where each product is fully customized to the customer, can afford to have more pay-at-risk in exchange for the large amount of opportunity provided. On the other hand, an on-demand specialist who rarely leaves the lab would best be compensated with base pay alone or with bonuses on a case-by-case basis.

There are many factors to consider when compensating for specialist roles, and much of that starts with the organization's compensation philosophy. Hopefully, this post has given you some things to think about. However, if you want to read deeper into it, please consider grabbing a copy of my book, Starting Simple: Sales Compensation.

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Structuring Timing for Maximum Success

By 183:906269490 • March 17, 2025

Over the past few weeks, we’ve delved into six crucial aspects of best practices in sales compensation: culture, financial due diligence, job content, pay mix, objectives, and plan mechanics. Each of these elements plays a pivotal role in shaping an effective and motivating compensation plan. Today, we turn our attention to another key component—timing. Defining Performance Period and Payout Timing There are two key aspects of compensation timing that affect how effective your compensation plan is at helping your organization reach its goals. These are: Performance Period : The timeframe over which sales performance is measured in the compensation plan—monthly, quarterly, annually, or per deal. Payout timing: The timeframe when a salesperson receives incentive earnings associated with their level of performance. While these concepts are distinct, they work together to influence sales behavior, business cash flow, and overall organizational success. Aligning Performance Period and Payout Timing with Organizational Objectives A well-structured performance period and payout schedule will reinforce your organization’s goals. For example, if you’re focused on rapid sales cycles and high transaction volume, you’ll probably use a shorter performance period and frequent payout timing to keep things moving along. On the other hand, if you’re prioritizing long-term account growth, large enterprise deals, or strategic selling, you’ll probably want to utilize longer periods (quarterly or annually) to encourage sustained effort and deeper customer relationships. Motivating Sales Teams with the Right Timing Salespeople are naturally driven by immediate, tangible rewards. If the gap between effort and payout is too long, enthusiasm may decline as the connection between work and reward weakens. On the flip side, overly frequent payouts—such as daily or weekly—could lead to transactional thinking rather than strategic selling. This is especially true when there are more frequent pay periods with very small amounts of pay. So before setting your performance period and cadence for payout, it’s essential to ask yourself what kind of behavior you’re trying to reward in your salesperson, as well as the sales function required to execute on your specific market and strategy. For long sales cycles where frequent payout timing simply doesn’t make sense, you’ll need to balance that by making sure your salesperson is aligned with organizational goals and that the salesperson is able to achieve meaningful levels of performance (as well as payout amounts) within that performance period. Best Practices for Performance Period & Payout Timing Choosing the right combination of performance period and payout timing is a strategic decision that shapes sales behavior and business outcomes. When well-designed, this timing structure maintains motivation, supports financial sustainability, and aligns sales incentives with broader company goals. A few best practices prevail: Align the payout to as close to the performance event (deal closing or otherwise) as possible, conditional on company affordability/sustainability Ensure that the performance period selected is closely aligned with the average sales cycle length. Generally, if there is a very short sales cycle, then a short performance period with quick pay is expected. That does scale up to very long sales cycles and longer performance periods with lesser payout frequency. Most organizations are somewhere in between. Be sure to recognize that it is specific to the sales role and not the company as a whole.

Plan Mechanics: Making it All Work

By 183:906269490 • March 3, 2025

In a way, we’ve already talked a lot about several components of sales incentive plan mechanics. We’ve covered the importance of culture , fundamental financial model ing, establishing job content , determining pay mix , and setting objectives . The next step will bring it all together. Some Important Sales Compensation Vocabulary We’ve previously described, at length, the two primary types of sales comp models (bonus plans and commission rate plans) as well as how to determine which plan best supports different sales roles. But there are a few other terms that are important to know when developing the underlying plan mechanics. The following list comes straight from my book Starting Simple: Sales Compensation . If you want a full but easy-to-understand breakdown of sales compensation, that book is the place to start. Accelerator--An increase in the rate of pay that occurs at a certain level of performance. Generally, this starts after the achievement of 100% of the target performance objective. Deal Cap--The maximum amount of pay on any single transaction Leverage--The sales incentive that would be paid out for performance between the target and the point of excellence. It is represented as a multiple of the target incentive Pay Curve--The slope of the line of the rate of pay throughout all levels of performance. Think of performance as the x-axis and payout as the y-axis. The pay curve represents the relationship between the two. In a fixed-rate plan, this is a straight line, representing a fixed rate of pay for every unit of measured performance (activity completed, dollar of revenue acquired, or percentage point of margin sold, etc.) Plan Cap--Maximum amount of pay under the construct of the plan Point of Excellence--The point on the pay curve that represents the 90th percentile of salespersons’ performance levels (should be greater than 100% of performance achievement) Rate of Pay--The amount of pay per unit of measurement. This encompasses the relationship between performance and payout at any point along the pay curve. Target--A point on the pay curve that represents 100% payout and 100% performance or (100%, 100%) Target Incentive--The sales incentive amount paid for achieving 100% of sales performance objectives Threshold--The point at which pay for performance starts. The threshold point should sit somewhere between 0% and 100% performance levels. It can be zero, which essentially means there is no threshold. Zero--The first point on the pay curve, represented by (0%,0%) for zero level of payout and zero level of performance Best Practices for Plan Mechanics A well-structured sales compensation plan aligns with your business objectives while keeping your team motivated. You need to balance risk and reward, ensuring that pay mix, thresholds, and accelerators drive the right behaviors. To evaluate whether your plan is driving the right behaviors, map your sales team’s performance along the pay curve—identifying where top, mid-level, and low performers fall. If most reps cluster near the threshold, the plan may not be motivating enough, while a heavy concentration at the high end could indicate overly generous payouts. A well-balanced distribution should show a clear progression, with incentives effectively encouraging continuous improvement and rewarding top achievers appropriately. Caps are controversial, and while they can help control costs, they can also discourage high performers. Accelerators, on the other hand, can be a powerful tool to motivate salespeople to exceed expectations. The key is to strike a balance—rewarding overachievement without creating unsustainable payout structures. Finally, sales compensation plans should evolve with business needs. In a future post, I’ll be talking about the importance of a regular review cadence for maintaining performance and fairness. When done right, plan mechanics create a system that doesn’t just pay salespeople but actively inspires them to excel.

How to Set Appropriate Targets

By 183:906269490 • January 31, 2025

Setting objectives is a constant balance between meeting your organizational goals and being realistic about the capabilities of your sales team. You want to be aggressive enough to reach revenue and profitability expectations as well as keep everyone motivated, but you don’t want to be so aggressive that your team feels it is impossible to succeed and just gives up. In part 5 of my Best Practices in Sales Compensation Series, we’ll go over some of the top things to consider for keeping your sales team engaged and successful. (Read Part 1 , Part 2 , Part 3 , and Part 4 ) When setting objectives for your organization, consider what you absolutely need versus the ideal you want; take into account the resources you have to work with (as well as the market situation and sales productivity); and create a target range ranging from easy to impossible—and place your target somewhere in the middle of that range. Types of Objectives There are several different types of objectives you might set for your sales reps. They can be sales process activities like making calls or qualifying leads. They can be progression milestones like hand-off triggers between internal teams or customer signoffs. But for our purposes, we’re going to focus on financial objectives such as revenue and profit. Best Practices for Setting Objectives Objectives need to align with organizational goals and provide achievable but challenging targets for the sales team. To accomplish this, consider these practices: Make sure that the salesperson has the ability to influence if not fully control, their capability to meet and exceed the objectives. Set realistic expectations. Unrealistic targets will stagnate your growth potential and give you a poor reputation with employees (as well as the labor market). Provide a clear and visible path to achieving the objective. Try to limit the quantity and types of objectives. More is not better. It’s better for a sales rep to be able to focus on a singular goal than to have their attention split in too many directions. Lastly, make a plan for what to do if your salesperson exceeds the target as well as underachieve target objective levels. These are just a few of the very important considerations in setting your objectives. Take some time to explore my blog or check out my books for a more in-depth look into sales compensation.

Getting Pay Mix Right

By 183:906269490 • January 14, 2025

Best Practices in Sales Compensation Part 4

Job Content is Foundational in Sales Compensation

By 183:906269490 • December 16, 2024

In my first Best Practices post, I talked about the importance of knowing what you can pay for your sales roles before worrying about what the market is saying. In my second post, I covered ways to utilize culture in a sales organization . The following Best Practice in sales compensation involves job content. Job content plays several roles in your compensation plan: 1. It gives your salesperson a guide to what success looks like in their role. 2. It gives you a guide to evaluating the performance of your salesperson. 3. It rationalizes differing levels of variable pay outcomes for varying performance levels. 4. It provides your organization with the structure needed to comply with any reporting, pay transparency, or other regulations. Hopefully, that’s enough to convince you of the importance of taking the time to define your new roles and revisit the definition of your existing roles. Now, here’s how job content actually does those things. Defining the job The first role of job content is to define the who, what, where, when, and how of the function. It can be tempting to borrow a job description from LinkedIn, Glassdoor, etc., with the assumption that the content will be similar enough to fit your needs. However, the way a specific role performs is unique to the organization it’s acting in, which is why it’s important to take the time to define the job from scratch. Here are the questions you should be answering in your job content: What does the person need to do on a daily basis? How does this individual pursue sales, and in what segment or with what type of customer? Where should they focus their time and attention when building a pipeline of deals? Who should they be interfacing with, both internally and externally? When do they engage with customers and/or prospects? What portion of the sales process do they own or support? How do they interface with and influence decision-makers? Now, even though I said to write your job description from scratch, that doesn’t mean this is the time or place to get too creative. Job seekers are going to be searching by job title or category, so it’s essential to stick to the common vernacular regarding industry jargon and expected job titles. Job Description: A Byproduct of Job Content Another positive outcome of creating job content for your roles is that you will have generated much of the information needed for a job description if or when you’re ready to hire. Information such as: Job duties and responsibilities that clarify the type of work and engagement with customers. Qualifications/Requirements that are both minimum and desired. Those include education, knowledge, skills, capabilities, and competencies. Performance measures of the role include items like achieving sales targets, new logo acquisition, development of pipeline, accuracy in forecasting, etc. With all of this information on file, it will not only be easier for you to prepare to hire for the roles you want, but it will also be easier to evaluate existing employees in those roles. Beyond all of that, you’ll be well prepared for competitive market research and establishing your variable pay program. I’ll be posting more best practices on the blog, but if you’re anxious to dive deeper into the subject of sales compensation, you can grab a copy of my book Starting Simple: Sales Compensation and consider working through the companion Workbook to build a sales compensation plan from scratch.

Sales Comp Guy