IT Frontline Sales / BDM Jobs - What to look out for

Giving a dump of what any person (MBA or Non-MBA) should be looking at before taking up a Frontline Sales role with an Indian IT Services firm. These are my personal views, based on my own experience and that of my friends across companies.

Job/Role Types:-
(i)Hunting - You have to go out and get totally new accounts/customers for your company.
Pros: Since sales person is taking higher risk on his commissions, payments could be very highly handsome.
Cons: As would be obvious, very tough to get new business, what with having to build contacts out of nowhere etc.

(ii)Farming and Mining, Account Management etc - Handle an existing customer account. Ensure that you farm/sustain existing business. Also mine the existing account, to grow it further.
Pros: Probability of actually earning the commissions is higher. Can leverage existing contacts in account, to get further business.
Cons: Since risk involved is slightly lesser, remuneration could be slightly smaller than that for a hunter role.



Job Location:-
(i)Check how soon the hiring company is willing to post you in the Geo/territory (in case of foreign postings), after you join them. Ensure that this is asap, since many a times due to various factors, you end up being stuck offshore only.

(ii)How easy is it to get a required work permit/visa to operate out of the target sales territory? - If the process for obtaining visa is highly unpredictable, have a suitable back-up plan. Try also to negotiate a good offshore salary, in case you end up not being able to go abroad due to visa issues

(iii)Check with folks, how easy is it to close the sale in the target Geo. Could local language prove to be a failing for you as a sales person? After all, you need to earn your commissions.

(iv)If you have a spouse, check out how your move to a new country would effect his/her career.

(v)Check out how your travel schedule would be, in the new Geo. Ensure that the company shall adequately reimburse all your official travel and official expenses.

(vi)Check out the living expenses in the place you would be based out of - Ensure that all your expenses and liabilities are covered even with just the fixed component of your salary (Understandably sales commissions are "variable")

(vii)Ensure that the company picks up the tab for your relocation expenses, in some form or the other.

Of course, the one that you all were waiting for :-), Salary/Remuneration:-

(i)Do not go just by the gross salary. Look at how much is the Fixed Vs Variable split in the salary. Also, research on your possibility of being able to earn the commission/variable pay (Analyse prevailing market conditions, talk to folks currently in those roles etc)
-->The fixed:variable norm in the Tier-1 companies (Wipro, Infosys, CTS etc) is 70:30, 80:20, or sometimes even 90:10.
-->The fixed:variable norm in the Tier-2 and Tier-3 companies (Covansys, Tavant etc) is 60:40, or 50:50

(ii)The annual salary norm for the US Geo(I have experience of only this Geo. Others can add their comments about other Geos...) is as follows, for folks with approx 7-11 Years of work experience:-
--> US Dollars 100K to 120K: For Tier-1 companies
--> US DOllars 150K to 180K: For Tier-2 and Tier-3 companies
Note: A US Citizen could in all probability be paid higher than a foreign national

(iii)Try to get a view of the kind of annual revenue targets you would be carrying. Needless to say, your commissions are directly linked to your achieving/not achieving the targets.
-->Check with people currently holding similar positions in that company, whether the target values are usually achievable.
-->Depending on your company, type of account you handle etc, your first year target in US could range anywhere from as low as US Dollar 1 Million to US Dollar 30 Million!
--> Note that a numerically higher revenue target value does not automatically mean it is difficult to achieve (If it is an established account with already existing revenue streams, it could be relatively easy to achieve). Similarily, a numerically lower revenue target does not automatically mean that it is easy to achieve (If you are handling a tough account as say a hunter, it could prove to be a mountaineous task)

(iv)"Higher" Salaries from Tier 2 / Tier 3 Companies Vs "Lower" Salaries from Tier 1 Companies Theory (Very, Very Important to keep in mind):-
--> As you would have seen from some of the points above, Tier 1 companies give a lower gross salary but also have a relatively less aggressive fixed:variable pay ratio. Reasons are simple: (a)They have a strong enough brand name to attract prospective employees (without having to use a high gross salary), (b)Huge Company Size etc, ensures that they do not need to goad/drive their sales folks in a "pure hunter" mode that much using very aggressive fixed:variable pay ratios.
--> On the other hand, as you would have also seen from some of the points above, Tier-2 and Tier-3 companies give higher gross salaries but are much more aggressive when it comes to the fixed:variable pay ratio. Reasons once again are simple: (a)They can lure talented sales people only via a higher gross salary package, (b)Since they need to grow faster and need to fight harder for survival, they have to goad their sales teams using more aggressive fixed:variable pay ratios.
--> Please keep in mind that there is a very high possibility that (a)9 times out of 10, you earn the entire US Dollar 100K (In a 70:30 ratio) in a year when with a Tier-1 company, but (b)Earn only US DOllar 80K in a year (From a Gross Annual Salary of 160K, with a 50:50 fixed/variable pay split). The Simple Reason?:- In a Tier-1 company, the better company brand name and support systems (established Pre-Sales / Back-End Sales Support Teams, huge repository of case studies/proposals etc), highly increases the probability of closing deals successfully

(v)Ensure that the company gives you all aspects about your salary, clearly in writing. A friend of mine who was promised a gross annual salary of US Dollars 160K (With a 50:50 fixed/variable pay split), was not paid his commissions ($80K), despite achieving his revenue targets!!. His company claimed that he would not be given the same, since (surprise, surprise!), his boss had not met his targets!! The company had not clearly stated the commission payout terms in his official offer letter.

(vi)Ensure that the company had a clear and fair mapping of job bands/designations between (a)When you are abroad as part of their Sales Force), and (b)When you are back offshore in a non-sales role. Even though many of the folks wish that there stints abroad continue for ever, due to myriad reasons (good or bad), you might have to return offshore one day.

(vii)Understand the variable pay/commission calculation stipulations / formulae clearly. Usually the formulae is a combination of your revenue target achievement, price increases/decreases that you are able to negotiate, your timely collections of payments from client etc.

(viii)Understand how frequently your commissions are paid out(quarterly, half-yearly, or annually). As is obvious, you need to have a good liquid cash position on a monthly basis, to meet your expenses and pay your monthly loan EMIs etc

(ix)Mostly (I would say more than 50% of the time): - Your incentive payout is linked to the actual payment from the customer coming into your company's account. So even if you sign a $1 Million deal, you would not get your incentives being paid out, until the money actually starts getting paid to your company.


Last, but definitely not the least:-
(i)These roles are not for everyone. Definitely not for the faint hearted. You need to be thick-skinned. It is defintely not the cushy, high paying "long-term onsite stint", that many folks in the technical/project delivery roles wrongly think it to be.
(ii)Please, please, please do not even think of taking up such a role, if you have one or more of the below traits as part of your personality:-
-->You are an introvert, who cannot easily build relationships and friendships
-->You are too much of a technical person, who believes that sales is equal to lying/cheating(which it most definitely is not).
-->You have this queer notion that activities like fishing for competitor information, is wrong and unethical.
-->You love a predictable professional life and believe that hard work always results in success. From this blog, you can guess how many things could go wrong in the normal course of things, despite putting in long hours of work
-->You believe that you can sell something, only if you understand it indepth technically or even worse worked in the domain in your technical life
-->You believe that you can make the entire sale yourself
-->If you have qualms about talking to senior management folks
-->You cannot multi-task and work long hours
-->You hate to travel, to be a remote/mobile worker who might have to work out of home or while on the road
-->You get put off easily by failures
-->You cannot act tough with people, when the business warrants it
-->You cannot work with different teams spread across company functions and Geos
-->You cannot control your ego, for the sake of winning your business
-->You hesitate a lot in asking questions, or trying to get information
-->You hate working with "tough" folks, be it customers/internal folks
-->You are averse to extremely honest and instantaneous appraisals by your supervisors (which is necessary in sales)
-->You are averse to working in an environment, where performance is only seen in the light of numbers/revenues achieved(irrespetive of the luck - good or bad, that has befallen you)

Hope this helps!! :-). Take care, till I am back next time with more on some interesting topic.

Folks - Please, please do send in your views, comments