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Sales Execs Hit Paydirt

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LubesnGreases has completed its Lubricant Industry Salary Survey, an exclusive study conducted every other year that polls the U.S. lubricants industry on compensation for key management positions. Information was gathered directly from individuals who work for lubricants manufacturers and distributors, and was compiled by an independent statistical and research firm. We present the results in this three-part series.

October: Plant Managers

November: Sales and Marketing Executives

December: Laboratory & Technical

The 257 U.S. sales and marketing executives responding to LubesnGreases 2012 lubricants industry salary survey say they earn an average $129,700 a year. About 58 percent of these respondents work for lubricant manufacturing companies, where pay averages $146,100. The rest work for lube distributors, and collect average compensation amounting to $107,500 a year. (Median responses were $137,500 for those at lubricant manufacturers, $96,500 for those with distributors.)

That difference – higher pay at lubricant manufacturers than at distributors – should be no surprise to anyone who has seen our previous Salary Surveys, going back 12 years. The 2010 survey, for example, found median pay for sales execs working for lubricant manufacturers was $128,000, versus $84,000 for lube distributors.

Other key factors that help the top-tier sales and marketing professional out-earn his or her peers include the size of company worked for, number supervised, and geographic location. Certified Lubrication Specialist credentials also have a visible impact on payday.

Remember that direct comparisons from earlier surveys to this years results should be avoided, because each biannual survey gathers data from a different pool of respondents. The number of responses also varies. In 2010, 300 sales and marketing professionals participated, versus 257 who filled out the confidential e-mail questionnaire this time. So the survey cannot say definitively that compensation has rebounded; only that this years respondents report higher average pay than those in 2010, and the median reported has edged up as well.

So what does the typical sales/marketing manager who participated in our 2012 survey look like? Male (per 95 percent of responses), 51 years old and well-seasoned, with an average 22 years of industry experience including eight in this current job. Our average respondent works for a small-to-mid-size lube manufacturing company with somewhere between 11 and 200 employees on its payroll, and has responsibility for a staff of 12, on average.

Making the Grade

Compensation for sales and marketing managers hinges on a number of essential factors, the survey shows. These include:

Geography. Survey participants from South Central U.S. states reported the highest median earnings, at $130,000 a year, followed by those in the North Central ($124,000) and Northeast ($120,000) states. Two thirds of our 2012 responses came from individuals in these three regions, and this tilt undoubtedly helped to boost the national average. At the other end of the scale, the region reporting the lowest median compensation is the Northwest, at $82,500.

Number Supervised. Our average manager has 11.8 people reporting to him or her. Those working at lubricant manufacturers are in charge of 14 people, while the distributor respondents say they supervise an average of 8.5. Pay rises commensurately with the size of the managers domain, and those who supervise five or fewer report median earnings of $110,000. Up that into the range of six to 12 subordinates, and the median rises to $120,000. When 13 or more people are supervised, median pay reaches $187,000, the responses show.

Company Size. This has a strong influence on pay, the 2012 responses demonstrate. Sales and marketing execs working for companies with 10 or fewer employees earn a median $77,500 a year. Median pay was reported as $110,000 for those at mid-size companies with 51 to 100 employees, while the median for those with the largest companies (501 or more on the payroll) hit $140,000. Thirty percent of this years respondents said they work for the biggest companies, and just 25 percent came from the smallest (50 or fewer employees).

Landing the Big One

The above factors suggest a three-pronged career strategy for those who want to up-size their pay: 1) Move to one of the Central states; 2) Beef up the number of workers under your eye; 3) Pursue a career at the largest companies.

Not so fast, says Glenn Krasley. Smaller companies also attract top talent, and can bring a lot to bring to the table. Thats what Krasley, who has worked for a major brand (Sun Oil), a global OEM (Mack Trucks), and a full-line independent blender/packager (Advanced Lubrication Specialties) has found. Two years ago, he became sales and marketing director at Ultrachem Inc. in New Castle, Del. I was not looking at all, but was recruited, he told LubesnGreases. He was enticed by the idea of moving to a small and feisty company that specializes in high-end synthetic lubricants, he said. Its also an ESOP [Employee Stock Ownership Plan] company, so everyone has a piece of it. The icing on the cake is that the commute is far easier than his previous daily slog through northern Philadelphia.

The survey results point to another pay-plumping tactic: If youre toiling now at a lube distributor, seek your fortune at a lubricant manufacturer. Not only is the median pay about $40,000 higher, but its more likely to be paid as salary rather than depend on unpredictable commissions. Youll also be more likely to get a raise and a bonus, the 2012 survey heard.

However, theres tough competition for sales and marketing slots in lube manufacturing. For example, when he hires sales professionals, Ultrachems Krasley says he does not begin by recruiting at lubricant distributors. Those are our customers, so Im not usually looking there (but I suppose I might…). Being 30 years in the business, when I need to fill a position I have a wealth of contacts that I can go to. I dont have to use a headhunter or employment service; I can find people without them.

Denny Madden, senior vice president of global sales and marketing at Amalie Oil, the large Tampa, Fla.-based blender/packager, echoes that sentiment. The last three sales people we hired came from manufacturers reps in the auto industry – not from lube distributors. But no matter what industry they come from, its more important they be self-starters than know about lubricants. We can train them to know about lubricants, here on the job or by sending them to one of the courses offered by the additive companies. But they have to have sales knowledge, and people skills.

To incent them, we pay our salesmen weekly salary plus a monthly commission on sales, so everyone earns salary-plus-commission, he continued. Everyone, that is, except for managers – and they get straight salary. In fact, Madden interjected, were looking to add additional people, since we bought the regional distributor Greased Lightning and have plans to add more manufacturing and warehouse space here at the Port of Tampa.

Its far better to get someone who understands how marketing works than how lubricants work, commented the marketing director of another large lube manufacturer in the U.S. South. The shrewdest lube companies will cross pollinate by recruiting from packaged goods companies such as Procter & Gamble or Johnson & Johnson, said this manager, who agreed to be interviewed on condition of anonymity. Those marketing guys know research and strategic planning, he added. But they may have just one product to work on. The job is even tougher here in the lubricants industry. Marketing managers here may have to do the role of product management too, and we may be focused on hundreds of different lube products – not just one, like Jif peanut butter.

Most of all, exercise those networking connections and relationships, LubesnGreases heard again and again. In this industry, everyone turns up someplace else, Krasley said. You rarely hear of someone leaving it for good, say, to go into finance or something.

CLS Makes a Difference

Twenty-eight percent of our 2012 sales and marketing respondents (71 individuals) said they hold Certified Lubrication Specialist credentials from the Society of Tribologists and Lubrication Engineers. Slightly over half of these individuals work for lubricant manufacturers, and their average age (51) and experience (23 years) do not differ markedly from the rest.

What does differ is their compensation. As a group, those holding CLS report higher median pay ($120,000) than those without ($115,000). CLS holders also tend to have responsibility for significantly larger staffs, averaging 20 people under their direction; only nine people report on average to non-CLS managers.

CLS holders are more likely to say they got a raise last year (58 percent) than those without it (48 percent); and 83 percent of them expect to get a bonus this year, versus 63 percent of the non-CLS crowd.

Despite the economic slowdown, this data show that CLS are not getting laid off. Instead theyre getting raises, points out Robert Gresham, director of professional development at the Chicago-based STLE.

Lubricant manufacturers, especially major oil companies, have long been aboard the CLS bandwagon and encourage their technical and sales people to secure the certification. Originally, we saw sales and marketing people at the major lube companies getting it, because they need to be tech savvy, Gresham observes. Theyre the ones who go in to troubleshoot at the end-users factory. More recently, he adds, were seeing some of the technical service function being kicked down to the distributor level, and so were also seeing a lot more CLS members from the distributor side now.

Gresham said the data on raises and bonuses seems particularly meaningful. Those with CLS are seeing more and more bonuses. Often, these are the people who are responsible for managing major accounts, like national fleets and big manufacturers, not just normal sales. These positions pay higher at lubricant companies, and they earn bonuses, not just straight salary.

Other Sweeteners

Speaking of bonuses, the trend for this and other forms of incentives – raises, commissions, stock and profit sharing – are something of a mixed bag.

Taken together, half of our 2012 sales and marketing respondents said they received a raise in the past 12 months. But the positive responses were weighted in favor of those with lubricant manufacturers. Sixty percent of them said they got a raise in pay, versus just 39 percent of those with distributors.

Sales and marketing execs with lube distributors were more likely to say their compensation this year will include commissions (38 percent) and profit sharing (29 percent), while executives with lube manufacturers more often said they expect to be rewarded with company stock (16 percent).

Bonuses are the other big divide. Fifty-four percent of respondents with distributors said they expect to receive a bonus this year, while 80 percent of those with manufacturers are confident of doing so.

The pain of the recent recession hasnt been forgotten though. As a marketing person, Im not pushing for a bonus this year, confided our anonymous marketing manager from the South. The big incentive, especially after a few years in this economy, is just having a job.

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