Sales Engineers Enable Higher Sales Per Rep

Companies often deploy Sales Engineers (SEs) to help demo and customize technical solutions. SEs are considered overlay as they typically are tied to one or more rep quotas. Deploying SEs is, therefore, an added cost to the sales force. Calculated deployment using Sales Engineer best practices promotes cost efficiency in the pursuit of revenue growth.  (see chart below).

SE to Sales Rep Ratio

What Is a Sales Engineer?

In technological and scientific industries, products and solutions are often complex. Communicating their value requires acute product knowledge in addition to sales acumen. Sales organizations in these industries deploy Sales Engineers to increase sales and optimize sales processes. A Sales Engineer is a multifaceted seller for organizations that provide technological or scientific products.

Sales Engineers make the sales process more consultative and collaborative. They foster close relationships with clients to deepen the organization’s understanding of its customers’ needs. Additionally, they collaborate with the Sales department to align the go-to-customer strategy with customer demand.

Interactions with both ends of the transaction help companies improve solutions and refine sales strategies. In this way, SEs function as revenue engineers. The SE identifies and addresses opportunities to elevate sales efficiency in scientific and technological industries.

The Value of Sales Engineers

Sales Engineers provide value to the sales organization and the customer.

For the sales organization, the SE can elevate sales per representative. The SE comes to understand the customer’s needs and relays that information to the Sales department. These findings influence everything from solutions customization to sales strategies. The SE’s guidance helps sellers address specific customer needs, promoting higher revenue contribution from each team member.

SEs help the customer by improving the solutions and their understanding of those solutions. As a product expert and sales professional, the SE can convey the solution’s value effectively. SEs often conduct demos that exemplify the impact a technological or scientific solution can make. These interactions also serve to manage customer expectations. The result is a strong, transparent relationship between the seller and buyer. The customer-side advantages boost satisfaction, contributing to retention and future sales.

Measuring and Analyzing an SE’s Value

Are Sales Engineers worth the investment? To find out, Alexander Group evaluated the sales rep productivity of 100 sales forces in our benchmark database. As expected, companies with higher SE-to-rep ratios have higher revenue per rep. On average, sales forces with a 1:5 ratio—1 SE for 5 reps—have revenue per rep of $2 million, while sales forces with a 1:1 ratio average $3.2 million per rep. (see chart below).

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Should Sales Departments Hire More SEs?

A correlation exists between the SE-to-rep ratio and revenue. Maintaining an even balance may deliver increased revenue-per-rep. Does this mean you should hire more SEs? The answer depends on a variety of factors. To determine the optimal ratio of SEs to reps the following factors should be evaluated:

• The complexity of the product or solution
• The maturity of the product or solution
• The bandwidth of the sales rep (how many other products or solutions do they sell or represent?)
• The length of the sales cycle
• The typical deal size
• The size of the customer
• The SE role (pure pre-sales or hybrid pre/post-sales responsibilities)

Ideal SE-to-Rep Ratio

For complex solutions sold to top Enterprise customers, sales reps are typically paired 1 to 1. Large global account reps may even have multiple SEs supporting them. However mid-market reps are typically paired 1:2 or 1:3, and certain solutions may only call for one SE for every five or six reps. Best practice companies evaluate their SE roles, headcount, and deployment ratios on a regular basis, making sure that the investment in these highly skilled resources is realizing the desired return.

Types of Sales Engineers

In the sales process, different types of Sales Engineers play crucial roles in ensuring success.

• Pre-sales engineers focus on the early stages, conducting product demonstrations, handling technical queries and crafting tailored solutions alongside sales reps to meet client needs.
• Post-sales engineers take over after the sale to ensure clients implement solutions smoothly, providing training and offering ongoing support.
• Hybrid sales engineers manage pre- and post-sales tasks, delivering comprehensive service throughout the entire sales cycle.

Sales Engineers typically specialize in either pre- or post-sales duties, but some perform both roles depending on the organization’s needs.

Benefits of Having Sales Engineers

Sales Engineers provide several benefits that can significantly enhance a sales team’s performance:

Quick Access to Product Knowledge

Sales Engineers offer immediate access to in-depth product knowledge, a crucial asset for sales reps. Even though sales teams undergo training, they often face complex, technical questions from prospects. Having a Sales Engineer on hand allows these questions to be answered swiftly and accurately without involving the engineering team. Doing so ensures that prospects receive detailed explanations tailored to their specific needs.

Effective Product Training

When a Sales Engineer conducts product training, it becomes significantly more effective. Their deep understanding of both the product and the sales process allows them to train sales reps in a way that connects product features to client needs. This approach improves the reps’ ability to demo the product, showcase how it can benefit potential clients and address pain points.

Clearer Client Expectations

Setting and managing client expectations is crucial. Sales Engineers can clarify what clients should expect from the product or service. Identifying and addressing the client’s needs early helps prevent misunderstandings and misalignment. This clear communication enhances client satisfaction, as they are more likely to be pleased with a product that performs as expected.

Strong Initial Success Strategies

Sales Engineers are key in developing an initial success plan for new clients. They use their understanding of the prospect’s needs to outline the best approach for implementing the product. Whether dealing with straightforward data integration or more complex setups, they provide a clear plan before a client signs the contract. This transparency helps close deals by ensuring clients understand their future experience and what to expect.

Smoother Shift to Customer Success

The handoff from sales to customer success is more efficient with a Sales Engineer involved. Their customer success experience enables them to effectively bridge the gap between sales and implementation teams. By understanding both the clients’ needs and the consultants’ requirements, Sales Engineers facilitate a smoother transition and kick-start the implementation process. This seamless handoff leads to a better client experience and quicker setup times.

Key Performance Indicators (KPIs) for Sales Engineers

To effectively measure the performance of Sales Engineers, consider these KPIs:

• Sales target achievement: Measures how well Sales Engineers hit revenue goals by comparing current results to targets or past performance.
• Demo effectiveness: This measure looks at how well SEs present products and is tracked by the number of prospects who move on to request trials or pilot contracts.
• Demo-to-sale conversion: This KPI evaluates how successful SEs are at turning product demos into sales opportunities.
• Product knowledge: The product knowledge metric assesses how well SEs understand and communicate the product’s features and benefits to demonstrate its value.
• Proofs of Concept (POCs): Important for showing SEs’ engagement and potential for generating sales, this number reflects the number of POCs they manage.
• Technical closure success: This KPI monitors the number of technically completed POCs that have not yet been converted into sales. It provides insight into the effectiveness of the closing process.
• Successful POC conversion: Conversion measures how effectively SEs turn POCs into actual sales, indicating their success in closing deals and meeting revenue targets.
• Keeping up with technical knowledge: Measuring how SEs stay updated on new features and technologies ensures they remain knowledgeable and effective.
• Team collaboration: This KPI evaluates SEs’ contributions to team efforts, including sharing knowledge, mentoring and working together to solve problems.
• Documentation quality: Assess how well SEs document their activities, such as POCs and meetings, to ensure clarity and continuity for the team.

Sales Engineer Best Practices

By nature, the SE role strives to communicate precise benefits unique to the buyer’s solution. This reality makes solution selling an effective way to drive revenue using SE deployment. SEs use a consultative approach to understand the buyer’s needs and tailor solutions accordingly. Sales Engineers can maximize their impact by adopting the following best practices:

• Fully engage with customers to thoroughly understand their requirements and challenges.
• Customize solutions based on detailed customer insights to address their specific needs.
• Collaborate with sales reps to ensure alignment on strategies and customer interactions.
• Optimize presentations to articulate the value and benefits of the solutions you offer clients.
• Stay updated on the latest industry trends and product developments to provide relevant and timely information to clients.

Maximizing the Revenue Benefits That SEs Provide

Sales organizations deploying SEs can implement various practices and policies that maximize each SE’s value. As you design an SE strategy, compensation plans, SE training and revenue tools become integral considerations.

Compensation Plans for Sales Engineers

The organization’s SE compensation plan should align with the value an effective SE can provide. A Sales Engineer serves numerous roles and completes various tasks—each warranting consideration within the compensation plan.

While the SE role is complex, compensation plan simplicity can go a long way. Offer a straightforward compensation plan with a clear balance between base salary and commission. The typical SE compensation plan establishes a base salary that provides 60%-75% of the seller’s pay. The remaining 25%-40% comes from commission. Finding the right balance is a critical part of maintaining profitability and retaining top SEs.

Sales Engineer Training and Development

Robust training and development programs streamline SE success. With sufficient training, new SEs can begin generating value for the organization sooner. Meanwhile, development programs help to convert existing sales associates into expert Sales Engineers. Training and development strengthen the seller’s understanding of the products they sell. They gain technical expertise while learning to convey unique selling points to the buyer. Training and development are most effective as ongoing strategies. While SEs will undergo initial training, continued learning helps them stay sharp and agile.

Revenue Tools for Sales Engineers

SEs, like any seller, benefit from implementing revenue tools.

The SE’s multifaceted role necessitates customer relationship management (CRM) software with collaborative functionality. A CRM allows SEs to compile and analyze customer data, driving sales and facilitating process optimization. Ensuring visibility throughout the Sales department helps the SE share findings with more sellers.

Product demo tools are also powerful revenue enablers for SEs. Providing a demo platform allows SEs to display the value of a product consistently and efficiently.