Challenges in Equipment Sales
Equipment sales introduce several structural challenges:
- Lumpy performance: Project-based deals create inconsistent revenue and payouts
- Earnings distortion: Large transactions can disproportionately inflate compensation
- Uneven opportunity: Equipment demand often varies significantly across territories
Beyond variability, equipment sales also require longer sales cycles, deeper technical expertise and different seller behaviors than consumables. Without thoughtful design, compensation plans can unintentionally skew seller priorities. Some sellers may over-index on infrequent, high-value equipment deals at the expense of recurring revenue. Others may avoid equipment entirely due to complexity or perceived low likelihood of success.
Because of these dynamics, organizations will see misaligned effort allocation, reduced forecast accuracy and increased earnings volatility. These challenges reinforce the need to align compensation with the organization’s broader coverage model and go-to-market (GTM) strategy.
Three Coverage Models
There are several coverage models to consider when realigning incentives with GTM strategy.
1. Account Manager Owns the Equipment Sale
In this model, account managers (AMs) are responsible for both consumables and equipment within their accounts, serving as a single point of contact.
Leadership Considerations:
- Difficult to establish fair, stable equipment quotas
- Significant variability in seller earnings
- Risk that equipment sales overshadow the consumables focus for some sellers
Compensation Solution:
When equipment is not a strategic priority for AMs, it’s best compensated outside the core incentive plan. Organizations can offer a commission or fixed payout per deal:
- Keep payout levels modest to reward participation without distorting behavior
- Avoid formal equipment quotas at the territory level
By following this approach, sellers remain focused on driving consistent consumables revenue and still supporting opportunistic equipment sales.
2. Hybrid Model: Account Manager + Equipment Specialists
In this model, the AM acts as the “quarterback” of the account—owning the customer relationship and overall strategy—while a dedicated equipment team leads technical, project-based sales.
Leadership Considerations:
- Balances relationship ownership with specialized expertise
- Improves execution and consistency in complex equipment sales
- Requires clear role definition and alignment to avoid confusion
Compensation Solution:
Include a dedicated equipment component in the AM’s plan:
- Use a goal-based incentive when equipment sales targets can be reliably set
- Use a commission-based approach when sales are too unpredictable for goal setting
This structure encourages collaboration while aligning incentives to each role’s contribution.
3. Dedicated Equipment Sales Team
Here, a specialized team fully owns equipment sales while AMs focus on consumables and account management. AMs may still identify and surface opportunities.
Leadership Considerations:
- Enables specialization and higher win rates
- Provides clearer role accountability and improved forecasting
- Risks reduced AM engagement if incentives are not aligned
Compensation Solution:
- Provide AMs with a referral bonus for qualified leads that convert
- Compensate equipment sellers through commission or quota-based incentives, depending on the organization’s ability to set targets
This approach reinforces specialized focus while maintaining AM involvement in opportunity identification.
Conclusion
There is no one-size-fits-all compensation model. The right approach depends on the strategic role of equipment, the predictability of sales and the desired seller behaviors.
Effective compensation plans:
- Protect consumables as the core revenue engine
- Align pay with seller influence and role clarity
- Right-size equipment incentives to avoid earnings distortion
Ultimately, compensation should serve as a governance mechanism, reinforcing the organization’s GTM strategy while promoting balanced seller behavior and sustainable growth. As portfolios and sales motions evolve, compensation models should be revisited to ensure they continue to drive the right outcomes.
