Sales Engineer MBOs

I recently covered some of the different compensation split options available for Sales Engineers at a very high level. This prompted a few questions, mostly around the use of MBOs. As a follow-up, let me go into the various options available to SE management as well as some common pitfalls.

MBOs are targeted performance goals. As such they should always follow the SMART approach. Even though a standard quota plan is just an example of an MBO, most sales/SE managers use the term more to apply to goals other than sales targets. For this article, I will refer to it in its more general sense.

The Four Pillars

Others may group them differently, but to me there are 4 categories of MBOs for SEs:

  1. Business/financial
  2. Employee satisfaction/enablement
  3. Customer satisfaction
  4. Process (continuous) improvement

This ensures that the 3 main stakeholders in business are accounted for: shareholders/owners, employees, and customers.


These are the goals that concentrate on the financial statements and address the needs of shareholders or owners. I suppose this is technically a euphemism for “shareholder satisfaction” These are also the most common compensation plan metrics—sometimes the only one (over 70% of SEs have a bonus plan tied to sales/revenue). This is even more so for AEs. Here are some options that may be available depending on your company’s revenue reporting capabilities:

  • Percent attainment of quota
  • Number of new customers
  • Number of tradeshows attended
  • Percent time spent in customer-facing activities
  • Percent growth in pipeline
  • Percent growth in average opportunity size
  • Percent decline in average opportunity age
  • Percent decline in assigned opportunities without SE involvement/tasks
  • Percent growth in deals won with SE involvement or specific activity (e.g. POC)
  • Percent growth in deals won vs. competition or specific competitors

Employee Satisfaction/Enablement

There is a host of revenue generating activities that are not specific to one’s own accounts. Creating sales collateral and supporting other account teams are specific examples. This category also applies to activities that go to morale boosters which address the needs of the employee stakeholder. Examples include:

  • Number of supplemental sales/marketing/support/implementation collateral created (and shared!)
  • Number of opportunities assisting regional sales teams in your personal niche
  • Number of posts on company bulletin boards or other social networking contributions
  • Number of published trip/win/loss reports
  • Number of informal training sessions (e.g. lunch and learns) delivered

Customer Satisfaction

Goals in this category encourage positive and long-term relationships with customers, which is in everyone’s best interest. These can include:

  • Number of repeat customers (renewals)
  • Number of published case studies or customer references
  • Percent achievement on customer sat surveys
  • Number of customer requested product features submitted to product management

Process (continuous) Improvement

Each of the other categories addressed a specific business stakeholder. Process improvement is a very broad category that concentrates on the foundational goals that generate continuous improvement in each of the others. This is best illustrated by the concept of moving the fulcrum over, or sharpening the saw in Covey terminology. It covers everything from contributions to business process improvement to personal development. Examples include:

  • Number trainings attended
  • Acquisition of a new skill or certification
  • Percent of activities documented in CRM
  • Contribution to special projects
  • Time management goals


Each of these basic options can be tailored (and weighted too) in numerous ways limited only by your creativity and ability to get at the data. You can focus these goals on specific products, business segments, or even competitors so that they align to company strategy.


With the ability to be flexible also comes the possibility of actually lowering productivity if you aren’t wise in how you approach them. Some of the most common pitfalls include:

  • Not keeping them SMART. The biggest culprit here always seems to be measurability. In many cases a desired result is qualitative. In these cases I employ “correlated result” approach where I seek out measureable events that typically lead to (or are correlated with) the desired result I am after. Example: It’s difficult to measure someone’s product knowledge, so the measureable result is attending a training, passing a specific test, etc.
  • Not publishing continuous results. We all need immediate feedback to make the biggest impact on results. If you’re only reviewing quarterly or (gulp) annually, you’ll find the process very ineffective and discouraging.
  • Reliance on manual compilation. If you need to manually jump through hoops to get the data you need it is that much harder to integrate them into daily practice. Automate the process whenever possible.
  • No scoreboard. Even if you just keep it in your team, your people need to benchmark. Friendly competition in my experience is good. The best will benchmark against themselves. Keep it updated frequently.
  • Tedious recordkeeping. If your SEs have to spend an inordinate amount of time entering data so that you can report on it, your program is destined for failure (or minimally noncompliance).
  • Unintended consequences. Over reliance on these metrics leads to pressure to game the system. Communicate the spirit of the goals and the behavior you are wanting to see.
  • Top down only. When each of us is involved in setting our own goals, we feel natural ownership. Involve your team in the creation process, even if by a committee that standardizes them for the entire organization. No taxation without representation!
  • Not communicating the why. If your SEs don’t know why something is important, you will have a difficult time getting ownership of the number.
  • Metric overload. Anything over 10-12 goals starts to become overwhelming. Keep is short and sweet.
  • Business only. We in Sales are naturally focused on business results. Over-weighting your goals in Business ignores other stakeholders and ultimately leads to lowered effectiveness.

Hopefully this gives you a head start on crafting your own MBO program. By no means is my list comprehensive and should be thought of as a starting point of discussion. Mastering Technical Sales also has a balanced scorecard that may be helpful that matches fairly well with this post. I’m also working on a template for me to use personally that I will include here in the future.

Forecasting for SEs

Depending on your sales organization, you may or may not be heavily involved with the official forecasting process. The most optimal forecast process involves the rep working collaboratively with the SE and any other sales team member (e.g. inside rep) to set the forecast. At the end of the day the reps need to have final say as they are the ones directly responsible for quota attainment. The forecast process should be well defined with as little subjectivity as possible. This leads to a far more amicable relationship with sales management. If this is how it works at your company, I would be impressed, as this seems to be a small minority of sales departments.

To me there are three essential ingredients to a successful forecast:

1)   Trust – If the sales team does not trust that they can be open and honest with sales management—or will be penalized in any way for doing so—the data input into the process will reflect it. In other words, we’ll lie.

2)   Process – If forecasting in your company is an art and not science, the forecast, in aggregate, will have high variance. Just ask your CEO/CTO or stockholders what they think of variance in financial data.

3)   Communication – If the person entering the data does not have a complete picture of the opportunity, the forecast will be made based on false assumptions.

At the sales management level, you will have varying influence on all three. Since this focus in on the SE, let’s spend some time on what we have some control over, which is communication. Since you’ve read this far, I’m hoping you already inherently see the benefit of working with your rep to ensure the forecast is as accurate as possible. I can think of a couple tangible benefits:

–    Sales teams that have a high degree of forecasting accuracy are (rightfully) seen as having a better handle on the business. This gets folks higher pay and more promotions.

–    Management tends to leave you alone and allow you more leeway in your daily routine and with potentially more perks.

–    If you really like your rep, it helps ensure they stay around. If they are seen as senior people, they also may get more influence on account selection.

Sales managers are primarily judged on quota attainment, but that is an incomplete statement. Consider manager A that over the course of 3 years comes in at 70%, 140%, and 90% of forecast versus manager B that comes in at 90%, 92%, and 91%. A averages 100% while B averages 91%.

If I was the VP of Sales, I would prefer manager B other things being equal. Why? I’d sleep better at night. What would scare me with A is that I don’t know if we’re feast or famine. I would be spending a lot of time with A in coaching and micro management sessions. If I had the chance, I would promote B to watch over and help the As.

This example is why you can reap benefits helping your rep be as accurate as they can be. Now, I’m not a fan of blaming problems on the “communication” scapegoat.  Far too many things can be loosely tied to poor communication to make it very useful for us. So here are some tactical examples of things we can do improve accuracy.

Sales Process

Use the chosen sales technology/process at your company mercilessly. It’s a huge pain in the ass, but long term, forcing your team to use the established guidelines prods you to use the same diction. It also subconsciously forces you to begin thinking the same way. If everyone is always keeping their eye out for the “technical decision maker,” “key product champion,” “sponsor,” etc. you will find that everyone begins to navigate the sales process in similar fashion. What you are essentially doing is adding more rigid process to the sales cycle which improves forecast accuracy.

Continuous Review

After every meet and greet, presentation, demonstration, etc. spend 5 minutes after the event breaking down the meeting with your rep. Talk about what went right, what went wrong, next steps, and generally work toward making sure what both of you heard from the customer is consistent. If there is ambiguity, address it in your follow up communications with the customer. What you’re doing in creating a habit of having micro dialogues that help keep you in sync. Trying to do this in email after the fact is a sure way of ensuring it never gets looked at. You can reinforce with writing (especially since you’ll want to do it anyway for your sales tool), but get in the habit of doing it in person right after the fact. Quarterly Business Reviews (QBRs) are fine, just make sure they happen in addition to frequent dialogue

Learn the Process

In most companies forecast reviews are not pleasurable experiences. It involves reps saying the least amount of words possible that allows them to leave the meeting without two black eyes from the sales manager (one is acceptable). Most of the time SEs are not required attendees. Most reps do not even want their SEs present to remove the possibility of providing the sales manager with conflicting data. Even still, you need to go to a few of them. The purpose is nothing more than to become as familiar with the forecasting process as your rep. Even if your reps dislike you for doing it initially, they should at least respect you. This is other side of the coin in terms of the sales process. Common terms, common process, and common experience should equal better and more effective communication.

For the SE Managers out there, it is your job to help your SEs see the benefit of becoming active in the forecast process. It’s not necessarily intuitive even for many senior SEs. Spend some time during your next meeting going over some best practices. Even better, invite a sales manager or director to deliver a talk about the importance of this process from their perspective. Most folks don’t know what happens to the forecast after it goes to the sales manager, so it could be quite an eye-opening experience to see the process end-to-end.

What’s in a Name?

If you’ve been a part of a large sales organization-or several-you’ve probably heard your fair share: sales engineer, systems engineer, customer engineer, (pre-sales) consultant, technical account manager, etc. All of these terms describe a customer-facing member of the sales team that is primarily responsible for recommending a combination of product(s), options, configurations, and services that best address the customer’s business need. This individual often qualifies, proposes, positions, and validates the solution with the customer during the sales cycle.So is one name better than another? Actually, yes.

I have probably heard every argument made for one or the other. Do any of these sound familiar?

“We should use the term system instead of sales engineer so that customers do not associate us with the sales team so that we are seen as more trustworthy.”

“Technically we aren’t engineers at all in the exact sense of the word. We should be called consultants, or sales consultants, or pre-sales consultants. Uh oh, how do we get rid of the sales part without the customer mistaking us for a services role?” Note: In certain countries the use of the word engineer in a business title is restricted to certain fields.

“We need the term sales in the title to show the sales reps that we are truly a member of the sales team and not a glorified tech support team.”

“If we use the term sales, maybe customers will be more likely to stop calling us for support after they buy the product.”

So which one is best? The answer, in my opinion, is the one that best allows you to identify yourself and your role to your customers. Because this differs among industry norms, the best choice may be different if you are selling medical equipment or ERP software. In my field of enterprise software, the term SE is ubiquitous. If you ask customers what this stands for, most will reply Systems Engineer.

We have a winner (in my case).

But that is not to say it is the right answer for every SE in every region of your company. My recommendation is to standardize internally on the most common term to minimize confusion between departments, but always give local SE teams the freedom to put the title on their cards that best matches the expectation of their customers. Drive consistency where possible, but always remain flexible.

If you still don’t have the answer, go ask your customer. Rarely are the best answers found in your office.

If by now you are wondering why I use the term sales engineer around here, it’s pretty simple. Do a web search for systems engineer, sales engineer, etc.  I think you’ll see that using sales engineer gives my potential audience the best chance of finding this site. Case closed.