How on earth do you earn this much money?
December 17, 2013 2:56 PM   Subscribe

This story about an IBM sales executive earning AUD $295,000 with a bonus of up to $1 million after allegedly earning $9 million in revenue for the firm, has made me really curious. In my industry, salaries top out around the low six figures. What does a job like this look like?

I’m interested less in the broader economic answers (it’s an enormous multi national, she is bringing in significant revenue for the firm and is being compensated accordingly) but in the nuts and bolts of how someone gets a job like this, and what it’s like to work in that kind of job. I can see from the story that she has a science/commerce degree from a good Australian University. I’m guessing that these are B2B sales. What kind of career path might a corporate sales exec have? What would the day to day of being a sales exec at this level be like? How does someone end up in a role like this? Are YOU a corporate/B2B salesperson? What’s that like? Help satisfy my curiosity AskMe!

I guess I’m curious because, possibly a bit naively, I just thought to earn that sort of money (in Australia anyway) you would have to have… I don’t know… something special. Or be a stockbroker or commodities trader maybe? Partner is a law firm? Succesful surgeon or barrister? But this just seems like a job. A really full on job, performed very well, at a high level, but not rocket science or requiring special qualifications.

Caveat: I’m not interested in a dereail about the 1 per cent or how unfair it is that anyone would earn this much money. Also not interested about sales in general, but specifically B2B with a large company, at this very-highly compensated level.
posted by t0astie to Work & Money (13 answers total) 9 users marked this as a favorite
Sales is a total gamble. If you're bad at it, you make almost nothing, but if you're good, and can handle high-pressure situations, and can schmooze and follow-up and know your product, your market, your customers, your delivery channels, etc., and don't mind working every minute of every day not knowing whether it will result in a commission or absolutely nothing, it may be for you.
posted by xingcat at 3:02 PM on December 17, 2013 [1 favorite]

Well something in her background put her into a position to sell what she sells. She probably got hired into a sales training program right out of uni, did well, got herself headhunted to a role at IBM that permitted her to sell big ticket item projects that allowed her to sell $9 mil in product/services. And for her product set there was a commission schedule.

And wrap that into what xingcat said.
posted by JPD at 3:07 PM on December 17, 2013 [1 favorite]

My brother is in parts sales at a company that manufactures shipping trailers. He is working his way, slowly but surely, up the rungs in hopes of eventually being in trailer sales. Shipping trailers are big business, high dollar items. My brother didn't finish college but has a very good chance of getting to that point in a few years because he's extremely personable, loves the business, and is learning everything about it from the inside out.

If you're good at sales, and you're in a lucrative industry like this person obviously is at IBM, it's easy to see how someone could do well. Quite well. She does have something special: she is a better salesperson than most people and a better IBM salesperson than most salespeople at IBM.

Personally I could never be in sales because I don't like other people enough. It certainly requires a particular skills set, they're just not really the kind of skills that can be taught.
posted by phunniemee at 3:07 PM on December 17, 2013

Best answer: Working at IBM he is not on straight salary. Very few corporate tech sales job would be. He makes a nice salary plus commission based on sales. Generally all you need is a college degree and some experience to get into sales in big company, or you come in through college recruiting after you graduate.

Very few people make that kind of money regularly. I've know plenty of people who knocked out a $500K year once or even twice. Honestly, it tends to be a case of right place right time then any innate skill in sales. You hit a big order in January (that you may have been working on for 1+ years) that takes out your quota for the year and then you are on accelerated commissions the rest of the year. That us how you have one of those $500K plus types of years. Or you are selling Sun servers to Verizon and Nextel in 1999-2001 when they are just blowing up due to mobile.

The downside is that income is very unstable. $180K one year, $130K the next, $75K in a year when you have to start over with a new company with a product that has a six plus month sales cycle so its very hard to sell much the first year. Then there are also those times you pick the wrong company and their product simply sucks. In the entire history of commerce no executive team has ever admitted their product sucks. They just fire sales force and start over.

Tech sales can be lucrative, and a nice middle class income is easily achievable. But be prepared to change jobs every 3-5 years.
posted by COD at 3:35 PM on December 17, 2013 [2 favorites]

I don't have personal experience but from what I know of my late father-in-law, he and other salespeople made crazy bonuses at Levi's when it went from an unfashionable oldie brand to the trendy brand it is today. However - and this is the point I want to make - management caught on and after just a couple years the bonus structure was changed from percentage of sales to something more "reasonable".

I've heard numerous stories from friends in sales about this sort of thing. You'd have to get extremely lucky to find yourself (1) doing sales (2) in a suddenly booming business (3) under inexperienced management. In other words, it's a gamble, just like @xingcat said, and it doesn't last, just like @COD said.
posted by rada at 3:36 PM on December 17, 2013

Best answer: Here's a good article on channel sales. If you're in channel sales, you have a larger revenue stream and therefore a larger net commission.
posted by janey47 at 3:36 PM on December 17, 2013

Mod note: This is an answer from an anonymous commenter.
I am uniquely placed to answer this question, as I work for IBM here in Australia! and though my job is not sales, I regularly interact with the most senior sales people and execs in the company. I will preface my remarks by saying that, in general, people have no idea how much you can earn working for multinationals in a senior role.

how someone gets a job like this

IBM does hire some senior execs and sales people externally, but most have come up through the company, have been here for at least ten years. Many, in fact, have come in as graduates. To get a senior sales role (which is what this person has); you will have literally worked your way up through the sales force. This means starting out in smaller roles, with smaller clients selling smaller deals. At this stage you have lots more clients, and you also do a lot of telephone work, and/or work with business partners selling IBM stuff. Salaries at that point would be in the ball park of say 60-80k AUD base, with bonuses varying but I guess up to 50k (but getting the full bonus is by no means guaranteed.

To promoted there are two key ingedients: Regularly meet or exceed your targets (and targets are aggressive, make no mistake), and have a good relationship with your business unit leader, so they become a patron of sorts.

Rinse and repeat this cycle as you get more senior. Note, the more senior you are, the less likely you are to meet your targets, and the less impact this has on your career trajectory, to a certain point.

I should also note that the vast majority of IBMers do not earn anywhere near that much money. Sales people get way, way more money than other people in the organisation.

what it’s like to work in that kind of job.
It's extremely hard work, and high pressure. Targets are very very aggressive internally, and at this level, as you can see, the bonuses actually make up the large majority of your salary. You are working long, long hours, 10-12 hours a day with spikes at the end of quarter. You are expected to always be on call. You are often out at client sites, working with clients, selling them IBM solutions, and working feverishly to coordinate the different business units within IBM that make up these mid-sized deals. Hardware, software, services, solutioning team, bid management teams. If you are a client rep, you are the primary touch point for the client, but up to 30 or more IBMers may be working on deals like this in a greater or lesser capacity. You are also expected to promote certain solutions to clients, and attend regular, intense internal calls with the most senior executives, flagging your deals or explaining why your future prospects ("pipeline") are not strong enough or meeting targets.

I’m guessing that these are B2B sales.
IBM sells nothing in the consumer space, and hasn't for about ten years (when they sold PCs to Lenovo).

What kind of career path might a corporate sales exec have?
It depends, people may choose where to top out. Also, they may switch and go work at another giant multinational company at a similar level. If you are able and willing to keep progressing, former sales people have become Business Unit Leaders, Country General Managers, and worked overseas at similar roles or as regional leaders for the corporation. A few end up in corporate HQ at Armonk.

Are YOU a corporate/B2B salesperson? What’s that like?
I'm not, and I wouldn't want to be in a million years. It's tremendously full-on, high pressure, and high stress. It's a role where you often need to move quickly, but you are in an organisation that's incredibly large and complex, and almost resembles a govt dept in its bureaucracy. It's intensely political, and there are just as many failures and drop outs as successes, and if you miss your commission, your salary more than halves. A lot of time is taken up following procedures and justifying yourself internally. And salespeople can be very nice and charming, they can also be very ambitious and callous.

I just thought to earn that sort of money (in Australia anyway) you would have to have… I don’t know… something special. Absolutely not. I hate the idea that people who earn lots of money are some kind of different class of person - they are not. There are successful sales people in this company that are dumber than me, work less than me, less articulate etc etc. There are dumb people in this company earning a lot of money. But to earn as much money as this woman, you do need to be good at your job. If you were terrible at selling, then you would not be at this level, and would probably be managed out.

But you can be great at selling and terrible at everything else. Also, by way of illustration, think about when you've been getting quotes from tradespeople, for example, for work on your house. Or you call up a store to ask about an expensive or complicated item, or go to harvey norman. Think about how terrible most of those people are at actually selling you their shit. About how little they seem to care about taking your money - I've gone through this myself recently getting multi-thousand dollar quotes for work on the house. They are terrible sellers. A little selling ability goes a long way.

Hope this helps.
posted by cortex (staff) at 3:37 PM on December 17, 2013 [25 favorites]

Best answer: Not an IBMer but I've worked in technology sales for the past 18 years. I specifically got into sales since it seemed to be the most lucrative career path I could pursue without having a specialized skill (like computer programming) or accreditation (lawyer, doctor, teacher, etc.). In my case I got promoted to sales after about a year of working in an entry-level customer service type position. My degree was in English, and I honestly had no idea a job like I have now even existed when I was in college. I sort of fell into the particular niche industry I currently work in after having answered a newspaper ad for the initial customer service job.

The specialty industry in which I work is a fairly small, intimate, "everyone know everybody" type of industry, so once you land a decent sales gig and have reasonable success, you can virtually always find a job (though obviously harder in the recent economy) since it is a somewhat specialized field.

While not common, there were definitely salespeople at the previous company I worked at (the largest international company of its sort in the particular niche industry I work in) who were earning in the extremely high-six figure, low-seven figure (US) range. Most of the people who were earning this level of income (this list unfortunately did not include me) were people who had earned the role of handling one or two (or more) major, international accounts. The top salesperson for this company was the sole account manager, worldwide, for a major, multi-billion dollar corporation I'm sure you've heard of (Which included outsourcing income he got a piece of. Over 100 employees who technically were employees of our company showed up to work at this account on a daily basis).

I left this particular company at the end of last year to take on a position with a slightly higher base salary, but lower overall income potential in terms of commission/bonus (channel sales vs. direct sales), since it was a better fit for me in terms of life/work balance. It was well known that to earn the kind of money described in your question, at least at my previous company (and this is actually sort of industry standard), required insane hours, all-nighters, limited time with family, weekends and nights were not "off" since it was expected that you were always available by phone/email. One key point that caused me to leave my previous position (and this was not the first company I've worked at with this policy) was that commission-based salespeople didn't receive PTO in the traditional sense (i.e. there was no set period of time off you were allotted per year, you could request time off, but it was heavily frowned upon if your sales numbers were not up to snuff and sometimes even if they were). It was not uncommon to hear salespeople brag about not having taken a full week off in X number of years (I think I took 6 total days off in 3 years with the company). I was somewhat friendly with the number 2 or 3 salesperson at this company and asked him once what kind of hours he worked, and he simply responded, "Morning until bed".
posted by The Gooch at 4:45 PM on December 17, 2013 [3 favorites]

I agree with the anonymous commenter that cortex quoted. It's a very hard job that generally requires excellent follow through and putting together a lot of proposals that go nowhere. With one exception: the special thing that these people have is an almost insatiable drive to work and succeed.

Another thing to consider is that depending on the product that is sold, the revenue that comes in isn't just at time of sale. There are care packs and extended warranties and computing-as-service fees that can go on for years. So the employer is happy to pay out a generous commission, knowing that they are basically getting an annuity for free.
posted by gjc at 6:16 PM on December 17, 2013 [1 favorite]

I didn't work in technology, but rather for an industry with ties to the automotive industry. I worked for relatively small service centers that earned many millions of dollars in sales despite their size (some had only four employees). The secret to their success? Schmoozing. Even though it's in writing in the corporate policies and employee manuals at the Big 3 car companies that they're not allowed to accept gifts over $25, all the senior purchasing agents do. They accept trips to Vegas, expensive jewelry, and pricey golf outings. The sales people I knew that landed these big accounts spent many of their off-hours and weekends entertaining. Even things like personal parties (Christmas, 4th of July barbecues, etc) were not off limits - they were expected to invite the buyers, especially if the party was at a country club or a nice house with a swimming pool.
posted by Oriole Adams at 9:01 PM on December 17, 2013

Best answer: I can't do much better than the anonymous commenter, but I will add that high-level sales is sort of a weird management job. technically, you are not a manager. But, you have a whole team of people working on the sale. There's one or more sales engineers doing the technical elements of the sale. There may be consultants along with the sale of goods, providing services or doing the implementation. There may be complex legal details to the contract requiring one or more lawyers. The sale itself may need approval from the company doing the selling - I have yet to see a B2B deal done without some sort of discount from list price and these always require approval from someone. The sale may be contingent on having the development team implement certain new features. Really big deals may require a meeting involving senior executives on both sides to shake hands and pat each other on the back and the sales person has to make that happen. So in addition to doing all the selling, the sales person is the central coordinator to all the people in the company also working on elements of the deal.

Also, depending on how the seller is structured, there may be multiple sales people on any one deal. In theory a sale of a mainframe to an Australian government (just making an example up) may involve the mainframe salesperson as well as a person responsible for government sales. Now we get into territory disputes and revenue recognition for quota and all sorts of other bullshit, but that's sales.

I've worked with lots of sales people and while they're all very nice, yeah, you wouldn't be able to guess how much they make just chatting with them socially. The only key to success is to enjoy working with people and to be diligent, determined and detail-oriented. It's not hard like proving-Fermat's-theorem-hard.
posted by GuyZero at 9:40 PM on December 17, 2013 [2 favorites]

Best answer: It's also worth noting that she exceeded her sales target by a factor of ten. I work in the tech industry and from my experience if you're going that far above sales target, the target was poorly set. It seems even more likely that this is the case here given that the anonymous poster above emphasises that IBM usually set aggressive targets. So what's probably happening is that she went way over target, earned a bonus far higher than the company was expecting to pay out, the company balked, and now it's going to get ironed out in court.

In general, though, and as our anonymous poster notes, most people have no idea how common it is, relatively speaking, to make this kind of money at a big international company. It's hard for an individual person to get to SVP level, and things like work-life balance become the quaint habits of the drones far below you. But looking at the industry as a whole there are many thousands of SVPs, many of which are into the seven-figure range for their entire package (base, bonus, stock, whatever else). If your CEO is earning $50 million per year, it's not the case that the next-nearest guy is getting $100,000. In between the CEO and the front-line workers are a legion of manager-types who are being paid serious money. And in fairness, they are doing serious jobs, and within their own little world they are 'famous', i.e. 'everyone' knows who they are in their section of the company, even though they may be unknown to the outside world.
posted by StephenF at 5:31 AM on December 18, 2013 [2 favorites]

Best answer: I thought I would expand on my previous answer to more specifically answer the "what it’s like to work in that kind of job" and "What would the day to day of being a sales exec at this level be like?" portion of your question.

I work in a different sector of the technology industry than the woman who inspired your question, but I would imagine the essential function of our jobs was the same - technology integration sales where the companies we represented were not simply selling products, but also the installation and programming services that make these products function in a usable way for our customers to use them as part of their daily business practices.

When I mentioned in my previous answer that extremely long hours are expected and required to be a top-performing salesperson in the technology industry it is because the actual "landing the deal" portion of the job, while certainly the most important in terms of job security for the salesperson, is just one part of the overall responsibilities that come with the position. To piggyback off GuyZero's excellent response above, the salesperson has to interface with multiple people and departments to insure not just the successful landing of the deal, but also to do whatever is in his or her power to make sure the post-sale integration process runs smoothly enough that future business (and references) can be achieved from the same client.

One of the biggest challenges in this industry is working with the engineering department, who is responsible for the technical design of the systems we propose as well as estimating the labor hours that will be required for implementation. In this, engineers and sales staff were frequently at odds since we came to the table with opposing goals. The goal of the engineering team was to present a workable, functioning system that had enough labor hours built into the project to where their head would not be on the chopping block if the hours were exceeded and the project started to go over budget and cutting into the profit (and thus, their labor estimates tended to be very conservative). Meanwhile, the salesperson needs to have an estimate that is price competitive enough to entice the client to proceed with the project. When I would get an engineering estimate back, my next step was almost always to take it straight to my general manager where we would analyze the labor estimates and I would have to make a case, frequently with the engineer there as part of the negotiation, that we needed to reduce our estimate by X to make our proposal market competitive.

The actual writing of proposals was a major time suck of the job, since we were selling services as much as products. So this was not simply a PRODUCT X = $YYY type of price quotation, but had to include a lengthy, detailed scope of work, written by the salesperson. These scopes of work detailed exactly what functionality the system we were proposing would include, and just as importantly, what it would not. This could take hours and hours to complete (plus generally needed to be reviewed by a manager) and while never told explicitly that this was a requirement, it was at least "strongly encouraged" that these proposals would be worked on after hours so that working hours could be dedicated to meeting with clients. The integrated systems we sold frequently included dozens and dozens of parts, which all needed to be priced out individually, which was another very time consuming process. We had a sales assistant available to us who theoretically could assist with this busywork, however, in the office I worked out of there were something like 9 salespeople and 1 assistant, so if you wanted to get something done quickly you generally ended up doing it yourself. This process also included contacting manufacturers and distributors whose products were included as part of the project and trying to negotiate better pricing to hopefully give the company an advantage in landing the sale. As a salesperson, I had a decent amount of leeway as far as negotiating pricing with the client, however, past a certain point I needed to take it to my general manager to strategize.

The running joke in my industry is that it's hard to know what is more stressful - being well below quota, where you have the stress of losing your job constantly hanging over your head, or well above quota, where your job security might be well in place and you're making good money, but the stress of having to manage multiple projects simultaneously can be overwhelming. Ideally, the client will order a system from you with little to no back and forth negotiation, the timeline in which they want the job completed fits in with the available resources at your company and the installation itself will go smoothly without any hiccups. I don't know that I had a job, ever, that met that criteria. Frequently clients wait until the absolute last minute to order a system, not giving the company enough time to implement within the desired timeline (so a lot of the salesperson's job becomes managing expectations). My holiday season was absolutely ruined three years ago when I hit the perfect storm on a project where a difficult client had unrealistic expectations about timelines, knew just about the technology he was buying to question virtually every step we took in the integration process, was constantly pushing "scope creep" (trying to get my company to include more in his system that had been initially agreed upon) and the system he purchased included bleeding edge technology that did not initially perform as it was supposed to (and to say he was not understanding about this would be the understatement to end all understatements). I don't know that I slept more than about two hours a night during the several week process this was going on.

While there is staff in place to handle the post-sale implementation of projects, the fact is, nobody at the company is ever going to care about a project you as a salesperson landed as much as you will, so the tendency is to stay involved to make sure you are at least somewhat in control of the process. I had a job last year that finally landed after my chasing it for months, only to nearly have it derail because my client felt the project manager assigned to the job had been rude to him on the phone. I had one too many incidents of projects nearly going south because an installer or someone else on the technical side said the wrong thing when I wasn't around to where I tried to limit unsupervised interaction between my clients and any non-me staff at my company.

When I said in my previous post that I had taken on a position earlier this year that was more fitting to my life/work balance, what that meant specifically is that I moved from systems integration sales direct to end user clients to working for a manufacturer (meaning my company sells direct to companies like the one I used to work for, who in turn sells/installs them for their clients). While there are definitely still stressful elements to my position in that I have ambitious sales quotas I am expected to hit, many of these other ancillary parts of the job are no longer things I need to worry about. Financially, that means a more stable income, but less chance of hitting that one huge deal that can make your entire year from one order.

(Sorry for the novel)
posted by The Gooch at 9:11 AM on December 18, 2013 [3 favorites]

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