Account executives can easily be considered the foundational layer of a corporation’s entire sales operation.
Responsible for driving sales, managing customer relationships and maintaining knowledge of company products and services, account executives often serve as the face of the company and drive much of the company’s top line revenues.
In addition to retaining updated information on the company and its products, account executives also need to stay on top of industry trends while developing new business opportunities.
Results speak volumes, and when account executives are able to drive significant revenue for their company, they need to be paid accordingly.
The question is: What is an appropriate salary for an account executive?
According to Glassdoor, the average base pay for an account executive is $59,416, with reports of salaries in the $37,000 range on the low end and $88,000 on the high end. Positions varied according to titles and responsibilities. Our own wage data shows a higher average, with salaries in the $67,000 range on the low end and $160,000 on the higher end.
Does market segment matter when it comes to the salary of sales professionals?
At Peak Sales Recruiting, we examined four desirable and innovative B2B industries – as well as specific sectors within those industries – to uncover some of the average salaries for this kind of position. We also took a look at how variables like location, experience, qualifications, company size and industry trends impact earning potential.
It’s important to point out that base salary and on-target earning potential varies significantly between companies. Additionally, bonus ‘splits’ are impacted by company size, growth potential, and sector, and are typically offset by company equities.
Technology and Software
While earning potential for sales professionals working in technology and software industries can vary greatly depending on the company and the location of the position, this is generally a good place to be. Sales professionals in tech have extremely high earning potential due to the rising interest and constantly evolving innovation within the industry.
Business Insider reports that the highest performing software sales professionals can attain up to $400,000 a year, every year. At some of the top enterprise software companies like Oracle, Microsoft or IBM, the top 20 percent of salespeople in the company reportedly earn $250,000 to $350,000 a year – figures that include commission and bonuses on top of base pay. As our CEO, Eliot Burdett, shared with Business Insider, “In a really good year, a top salesperson at these companies can earn $1M.”
While software startups tend to pay less, they also frequently offer bonuses of stock against an eventual IPO, and many account managers choose to work at startups because of the unique company culture.
Cybersecurity is constantly changing in this day and age – and jobs are evolving right along with the technology. Staying on top of industry trends with experience under your belt is financially rewarding in the cybersecurity sector; according to Indeed.com, jobs like Senior Account Executive of Cyber Technology, Enterprise Account Executive, or Account Executive of Global Services are the kinds of positions bringing in $135,000 and above in the cybersecurity industry.
Big Data / Predictive Analytics / Machine Learning / BI
The potential of machine learning and predictive analytics is starting to be broadly recognized, which means that account executives in this niche are also being highly pursued.
By the end of 2020, the business intelligence and analytics market is expected to exceed $22 billion dollars. According to HBR Analytic Services, more than 60 percent of executives believe that their future success depends on the successful adoption of AI.
Indeed.com finds jobs for account executives for big data companies that report salaries of $75,000 (San Jose, CA) to $115,000 (Santa Monica, CA) to $150,000 (LA).
Software as a Service (Saas)/Cloud Products
According to The Street, the tech industry offers lucrative opportunities for a salesperson. Tech companies need to sell their software, applications, programs and other SaaS products, and they’re willing to pay for it.
Glassdoor reports that the national average salary for a SaaS Account Executive is $59,416 in the United States.
Earning potential does rise significantly for companies based in large metro areas. And – even better news – many of the online job descriptions allow for working remotely so relocation might not even be necessary for sales professionals interested in a higher paying position with a tech company based in a larger city.
According to jobs found on Indeed.com, an account executive in New York City with the company OpenAsset has on target earnings (OTE) of $150,000. The OTE of an enterprise account executive with 5 to 7 years of experience in B2B SaaS Enterprise Sales joining SOCi in San Diego is $170,000+.
The Bureau of Labor Statistics’ website shows that 7 out of 20 of the fastest growing industries today are in a healthcare related field, and it’s no surprise why: the Baby Boomers are getting older, population is expanding, medical technology is rapidly advancing and people are arguably sicker than ever before.
While Glassdoor shows that the national average salary for a Healthcare Account Executive is $59,416, it’s also clear that salary ranges for sales professionals increase quickly with additional responsibility within the healthcare sector. Overall, account executives in healthcare could potentially earn somewhere in the range between $119,000 and $157,000, according to PayScale.com.
As in other booming industries, sub-sectors of the healthcare industry do matter when it comes to salary expectations, and it can vary greatly depending on your area of expertise. Salaries in up-and-coming sectors like healthcare information technology are more competitive than sectors that tend to be more crowded with sales executives who hold the benefit of long-term experience
According to the 2017 Pharmaceutical Sales Salary Report, pharma and pharma specialty sales reps are “knocking it out of the park.” The survey reports the average total compensation for pharmaceutical sales reps is $133,563. Specialty pharma reps earn even more; the average specialty pharma sales rep is earning $147,318.
The report breaks down that income, showing that of the average salary in pharmaceutical sales, $99,000 was the average base pay, with nearly $32,000 in commission or bonus. The specialty pharma average salary shows close to $10,000 more base pay at an average salary of $108,548, with $39,000 in commission.
For medtech manufacturers today, future profits depend on the ability to evolve with the market. Many have begun taking action, whether through acquisition, corporate or organizational restructuring or redefining innovation.
According to Glassdoor.com, the national average salary for a Medical Device Account Executive is currently $57,244 in the United States, and this will most likely continue to adjust due
to anticipation of disruptive change in this industry normally paved by tradition.
What does that mean for account executives in this space? A report by A.T. Kearney predicts that companies no longer will be able to earn premium margins by selling clinical features and new devices in market places that are already established; instead, they need to look to new segments and solutions for additional revenue and increasing margins.
With appropriate measures taken, the report estimates the cash value generation potential for the industry to be $34 billion by 2020 – with major potential for those selling the medical devices as well.
There’s money at financial firms – and it’s not being exclusively passed around to the executives and developers. Selling financial products has a lot of earning potential as well.
Financial markets in the United States are the largest and most liquid in the world, according to SelectUSA. In 2016, finance and insurance represented 7.3 percent (or $1.4 trillion) of U.S. gross domestic product. Significant economic activity and job creation can be found in this large, high-growth sector.
Currently, the national average salary for a Financial Account Executive is estimated to be $59,416 in the United States, according to Glassdoor.com. Sales professionals on the lower end of the scale report earning around $37,000 while the high end might expect closer to $92,000.
It’s especially important to note that the figures above don’t include end-of-year bonuses or other additional pay, which can add another $30,000 or $40,000 to the equation, based on financial account executive reports on Glassdoor.
Financial Tech (FinTech)
Fintech is one of the fastest growing sectors in the financial field. Forbes reports that financial technology companies in the U.S. raised $3.5 billion in the first half of 2017, with investors most interested in sectors like insurance and digital currencies. The U.S. is now home to 13 fintech companies with valuations of at least $1 billion.
According to FinTech Market Report from Statistica, transaction value in the FinTech market will amount to $4,225,551 in 2018. FinTech transactions are expected to show an annual growth rate of 17 percent between 2018 and 2022. FinTech’s largest market segment is “digital payments,” with a transaction value total of more than $3.2 million.
“Cash might not be dead yet, but the world of digital payments — both from consumers to businesses and between businesses — is evolving faster than ever before,” Forbes notes.
Earning potential for sales managers in Fintech and Digital Payments certainly varies based on the company. While examining salaries across the country, Glassdoor shows that an account executive working for Nextiva in Chicago is estimated to earn an average income between $51K and $90K, while one working for TriNet Group in Dublin, Calif., earns between $84K and $144K.
As digital technologies change how people live and work, financial services firms are choosing how to adapt. According to Oliver Wyman’s most recent State of the Financial Services Industry, “financial service incumbents will need to invest in digital transformation more deeply than they have previously in order to realize drastic cost reductions” to stay competitive in their existing business.
Digitizing existing financial businesses will certainly preserve shareholder value in this ever-changing technological world today – not to mention drive more sales.
Here is a quick breakdown of average on target earning (OTE) across seven major sectors according to our own data, irrespective of company size and geographic location:
Consumer packaged goods (CPG)
Food and beverages, clothing, tobacco, cosmetics, cleaning products and other household products: the consumer products industry is one of the largest in North America, valued at approximately $2 trillion.
Companies in the consumer packaged goods industry aren’t necessarily dismissing traditional selling roles but are looking to hire sales professionals with knowledge and experience that will foster growth and innovation throughout industry changes, with expanding roles in consumer insights, logistics, packaging and ecommerce.
CPGs have typically been sold in brick and mortar stores, but a shift is continuing to occur, with an increasing number of products sold in the ecommerce sector and more infrastructure in place for online retailers to handle these growing sales. Companies like Amazon are utilizing the “click and collect model” such as Amazon’s Prime Pantry, allowing consumers to purchase CPGs online and have them delivered on their doorstep.
It is necessary today for companies to adapt to emerging markets found both abroad and in the US. In many emerging markets, such as Brazil, Russia, and China, there is potentially a large market of new consumers counted on by CPG firms for future expansion, according to PwC’s strategy consulting team Strategy.
In the U.S., consumer behaviors are shifting and the channel landscape is changing, pushing CPG companies to pivot as well, as found by McKinsey. “Consumers under 35 differ fundamentally from older generations in ways that make mass brands and channels ill suited to them. They tend to prefer new brands, especially in food products.” According to recent McKinsey research, millennials are almost four times more likely than baby boomers to avoid buying products from “the big food companies.”
Developing markets do continue to have tremendous growth potential. They are likely to generate new consumer sales of $11 trillion by 2025, which is the equivalent of 170 Procter & Gambles.
For sales professionals in this industry, this also equates to growth potential.
According to the Consumer Packaged Goods Salary Guide released by Versique, an account executive in the CPG industry can expect a salary in the range between $45,000 and $75,000 depending on specific role, location and company. This type of CPG account manager typically has a minimum of 2-3 years of selling experience and is responsible for learning about their accounts, specific products, the industry, as well as influencing customer decisions in critical business areas. A regional/key account manager – with 5-7 years of consumer products experience – may expect a bump in those numbers, with a salary between $65,000 and $90,000.
At the next level, a national account executive in CPG typically has more than 5-7 years of selling and retailer experience; this individual is responsible for driving cross-functional teams to achieve success within accounts and overseeing development and successful selling, while building productive and profitable relationships with retailer teams. The responsibilities of a national account executive are reflected in a larger salary, with a range between $88,00 and $130,000.
Though the market is solid, it is also highly competitive due to high market saturation, low consumer switching costs, shelf placement, brand recognition and advertising. While growth has slowed in this industry, companies that provide CPGs still benefit from large margins and strong balance sheets.
Attract the Best by Offering Competitive Compensation
What attracts sales professionals who are consistently generating leads and closing sales is the right compensation – not only base salary but potential total income with bonuses and commissions. Organizations first need to determine their goals in order to attract and retain the qualified account executives they need. With compensation that is in line with or exceeds the industry market, sales professionals are motivated to cultivate business relationships and drive the sales that boost overall company growth.