Competitive compensation is critical to attracting and retaining sales directors in 2022. Use the industry data in this post to help you calibrate your compensation. Inflation and intense competition for sales talent pressure companies to offer robust compensation.
Benchmarking Sales Director Salaries: 3 Factors To Consider
Like other sales roles, several factors influence sales director salaries. For simplicity, we recommend considering three general categories: job role-specific, company, and candidate factors.
Factor 1: Your Industry and Company
Your industry influences sales compensation.
For example, companies in high-profit margin industries like software can pay higher compensation while less profitable companies may take a different approach. In addition, management may have set ambitious growth targets such as expanding sales to new industries or markets. In those cases, higher salaries may be appropriate given the increased demands of the role.
Factor 2: The Candidate’s Capabilities And Experience
Candidate-specific considerations also matter in crafting compensation. Recruiting an outstanding sales director from another company is challenging. High performers may have above-average bonus arrangements, stock options, and more. Attracting high-level talent without meeting (or exceeding!) their current compensation is tough.
Factor 3: Competitive Factors (i.e. What Other Companies Are Paying For This Position)
Job-specific factors refer to what other companies are currently paying people to perform this role. These factors are further differentiated by experience, geography, and other aspects. Salary surveys and industry comparisons are vital to evaluating whether your organization is competing effectively on this measure. That’s why we are focusing on
Sales Director Salaries Overview & Experience
To put sales director salaries into context, it’s essential to understand the role. The job description of a sales director typically includes the following responsibilities:
- Own the goal for meeting or exceeding a sales target for assigned territory.
- Create and implement the sales plan to achieve the sales target
- Motivating and developing the sales team
- Collaborate with other company leaders and managers
- May have personal sales or relationship responsibilities for certain high-value customers
The specific responsibilities of a sales director at your company may look a bit different. Overall, sales directors are generally understood to be somewhere in the senior ranks of managers with the potential to join the executive level.
Now that we understand the specific responsibilities of sales directors, let’s consider how sales director salaries vary with experience.
- Entry Level Sales Director Salary: $100,000-$150,000
- Highly Experienced Sales Director Salary: $200,000+
In addition to salary, significant bonuses are common for sales directors. For example, a senior director of sales in New York may earn a bonus equivalent to 40% of their salary for achieving their goals. Offering significant performance bonuses, above and beyond salary, is a key part of any sales director’s compensation.
A sales director’s level of experience matters. Yet there is more to the picture. It is also crucial to understand regional differences in salary expectations.
SD Salaries By Region
Sales director salaries are influenced by cost of living factors and other geographic specific factors. The following data points highlight typical sales director salaries for some of the country’s largest regions.
- New York: $155,000 on average (New York City is likely even higher).
- California: $101,000 on average (San Francisco salaries are higher: $135,000 is common)
- Texas: $90,000
- Illinois: $97,000 (Chicago salaries are higher at $120,000 per year)
- Washington State: $90,000
- Florida: $87,000
- Ohio: $75,000
To put these sales director salaries into context, it’s helpful to compare them to another type of sales leadership role. Find out more in this guide to VP Sales Salaries By Industry.
Sales director salaries are also influenced by industry. Generally, technology and bio-pharma are among the highest paying sectors for sales leaders.
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Sales Director Growth Expectations
Exciting compensation growth is one of the most exciting aspects of a sales career. Sales director recruiting should include an upfront discussion about the growth potential of the position in terms of responsibilities and income.
Before meeting with potential new sales director job candidates, take some time to think about what you can offer to the person to keep them engaged. Remember – other organizations are constantly seeking sales leaderships to join their organization. The following questions will help you prepare for effective recruitment.
- What compensation growth can the sales director expect if they deliver results? For instance, what can the sales director expect to earn in year 1, year 2 and year 3?
- What bonuses or additional rewards are available for exceeding their sales quota?
- Will the sales director have the opportunity to hire and develop a sales team? How many sales people will they have?
- How will the sales director contribute to the company’s growth strategy? For example, is the sales director responsible for growing a brand new sales territory?
- What career advancement opportunities are realistically available to a successful sales director at your company?
It can be difficult to answer all of these questions if you have never considered them before. Fortunately, you don’t have to explore these points on your own. Contact Peak Sales Recruiting to discuss the best way to present your organization to potential sales director job candidates.
Why Recruiting A Sales Director Is Different From Other Sales Positions
In hiring, it is difficult to develop expertise unless you have a lot of practice. You might be experienced in recruiting and developing junior salespeople. That said, finding and hiring the right sales director for your needs is a different story. It’s a vital decision – make the wrong hire and the entire sales team might herd.
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