In many tech companies, a recurring frustration from employees is a need for more clarity and transparency regarding career paths and sales teams are not an exception. And let’s not kid ourselves here many people choose to work in the tech world because it is still today one of the best playgrounds to 1. make a lot of money and 2. grow quickly in your career even as an individual contributor. Oftentimes overlooked, building a strong and transparent sales career path will be a great asset to attract, retain, and motivate your sales teams. 

Although it takes the contribution of many stakeholders to build the sales culture, revops/salesops have their part of the responsibility as they are the owner of the infrastructure around sales incentives, target setting, and yes, you guessed it… sales career path. While I recommend building these three pillars conjointly, today we will focus on the sales career path. 

Keep it simple and inclusive. 

Before we jump into numbers it is important to understand and include all possible paths to success. What you want to achieve is:

• Alignment with your leadership so that everybody is comfortable and understands the goal of this project.
• Make sure you understand and map all possible route and their fork
  • Path to individual contributor’s excellence (IC)
  • Path to leadership positions
  • Path from segment to segment (e.g. from SMB to Mid-market)
  • Path to other departments of the company. 
• Make sure you align each position with the overall company career ladder (if there is one) 

You should end up with a clear sales career path like this: 

As you can see here we have 3 big paths:

• The IC path
• The sales leadership path
• The operations (ops), customer success (CS) path

You will also note that in this sales career path example, some ICs are at the same level or sometimes higher than some of the leadership positions. In my opinion, it is important to communicate to the people who do not wish to become managers or ops people that there is a path to growth and recognition for them as well. This is oftentimes the second biggest failure after transparency that the tech companies’ leaders make.  

Rules for promotions and business needs

Automatic rules for the IC path

Once again I will advise you to keep the rules simple and to also take into consideration cost when you build the rules for the promotions. 

I like to make it semi-automatic when we are following a line. For example, you can go from junior AE to AE if you reach or exceed your targets 3/6/12 months in a row and your behavior/process following is on point. This takes bias out of the equation and the rule is clear for everybody. 

You might have to add a dependence on business needs for transfer from SDR to AE and AE to mid-market/enterprise AE. 

Rules are dependant on business needs for leader and ops path

For the leadership and ops/cs path, this is where it gets trickier as you now have to include business needs (not everybody can become a team leader if only 4 AE is remaining), extra training like leadership and management or data visualization… 

You also need to take into account the movement of a productive IC to an overhead cost into your rules as often time whether they move to ops/TL position they will no longer be a direct contributor to new revenue. The move to CS will still need to take this into consideration even if CS can be responsible for expansion revenue. 

The different types of rules you can apply:

Business Needs	Target dependence	Target dependance	Training dependence
The promotion is only possible if there is a business need. The position needs to be open and the candidate that meets the criteria will be able to apply without a guarantee of getting the position.	The promotion is only possible after an amount of time spent in the current position. The promotion can then be automatic once the candidate meets all criteria.	The promotion is only possible after the candidate has reached or exceeded target X amount of times. Then again the promotion can be automatic if the candidate meets all criteria.	The promotion is only possible if the candidate successfully attends the training that the new position requires. The training should include some form of test to evaluate the candidate’s readiness after the training.

You can use a combination of these different rules but don’t forget to keep it simple as the more you add the more difficult it will be to grow and what is supposed to create excitement and motivation will have the opposite effect.

Crunch the numbers to keep costs under control

Map out on target earning first. 

Last but not least as your employees grow in your company you still need to make sure that it is a win-win situation for the company and the employee. 

That is why it’s time to crunch the numbers. You want to start by mapping out each level we agreed on before and add on-target earnings (OTE) to each of them. You can use a website like Glassdoor to get an idea of salary ranges in different locations. Here is an example:

AE path in New York City
Position	Base salary	Variable	Variable (% OTE)	OTE
Junior AE	$80,000	$80,000	50%	$160,000
AE	$100,000	$100,000	50%	$200,000
AE II	$120,000	$120,000	50%	$240,000
Senior AE	$160,000	$120,000	40%	$280,000
Senior AE II	$180,000	$140,000	40%	$320,000

A 50/50 split is often the norm in hypergrowth start-ups. They also tend to uncapped OTE to offset the risk that the company carries. You will note that for senior AEs the split changed to 60/40. This is also an industry standard as a form of recognition and helps increase retention in the sales team. All of these are of course recommendations as there are no official rules in most countries regarding sales incentives. Feel free to also use a salary band instead of just fixed numbers as this will give you more wiggle room in the end. Just make sure that when you are calculating the target-to-cost ratio (getting there in the next part) you take the higher end of the band as a base. 

Target and cost control

Now that our structure is in place this is the best moment to add in targets. Again, that is why I recommend doing this exercise along with target setting and compensation because the 3 structures will talk to each other. 

We want to add targets in 1. for transparency to the organization but also to calculate target to cost ratio. We do this to make sure that the company will make a profit but there are 2 schools here:

• You should include all acquisition teams into consideration and multiply the target by 2. E.g. if to sell your products or services it takes 1 SDR, 1 AE, and 1 CSR then you should sum up their 3 OTE – let’s say $400,000 in this example – and multiply it by 2. This means that the target for the AE should be at $800,000/year.
• If it’s harder to get the cost of the team there is a simplified version that just considers the cost of the AE and multiplies it by 3. The reasoning is that this is a substitute for LTV:CAC of 3:1 and it should cover all the necessary costs. E.g. if an AE makes $200,000 OTE then its target should be $600,000/year as in Table 2.

As you can see there is a difference in target in the 2 examples. Obviously, the more precise you can be the more precise your targets will be. 

AE path in New York City
Position	Base salary	Variable	Variable (% OTE)	OTE	Target
Junior AE	$80,000	$80,000	50%	$160,000	$480,000
AE	$100,000	$100,000	50%	$200,000	$600,000
AE II	$120,000	$120,000	50%	$240,000	$720,000
Senior AE	$160,000	$120,000	40%	$280,000	$840,000
Senior AE II	$180,000	$140,000	40%	$320,000	$960,000

Rules for training and onboarding period. 

The last thing that you should take into account are the training and onboarding periods. 

While moving in the same lane should not call for different training, you should think of additional training when changing paths (on top of the original onboarding of course). This translates into unproductive and ramp-up periods that you need to account for in your processes as it will be an investment out of pocket for the company. 

So coming to my previous examples, moving from junior AE to AE, assuming they need to reach the target for 6 consecutive months you will also have to include the month of onboarding and the ramp-up period that will vary based on companies’ complexities. 

Same thing for an AE moving to a leadership position, you will have to account for a training period where he will learn about leadership and management but also a transition period when he is closing/handing over his open pipeline to other members of the team.