LubesnGreases has completed its Lubricant Industry Salary Survey, an exclusive study conducted every other year that polls the lubricants industry on compensation for key management positions. Information was gathered directly from individuals who work for lubricant manufacturers and distributors, and was compiled and analyzed by an independent statistical and research firm. We present the results in this three-part series.
October: Plant Managers
This Month: Sales and Marketing Executives
December: Laboratory & Technical
Before he launched into a sales career, Stephen Mitchell spent a decade as an engineer, designing passenger vehicle components like clutches, brakes and accelerators, window systems and door modules.
But then – quite literally – he decided to shift gears.
Since February 2007, Mitchell has worked as an account manager in the sales group at Etna-Bechem Lubricants, a Chagrin Falls, Ohio-based specialty lubricant manufacturer. Now based in Windsor, Ontario (near Detroit), his responsibilities include finding and managing customer accounts, and making product recommendations to clients.
Engineering to sales was an important move, Mitchell said. I felt I could be a superior sales representative in my industry, based on my technical past. I also preferred the more human contact that a sales role afforded, and wanted to learn a new perspective, which staying in the same position never affords you.
The Toronto native said that geography and compensation were important factors that weighed heavily in his decision to join Etna-Bechem. My account area extends from Detroit to Toronto, so it affords opportunities for me to be in the Toronto area from time to time. And, he said, the jobs salary and commission structure were appealing.
The leap to sales may have been a smart career move for Mitchell, because sales and marketing executives at U.S. lube manufacturers and distributors report earning an annual average of $111,100, according to LubesnGreases 2008 Salary Survey. Thats about 7 percent above the average reported in 2006. The median pay reported is now $105,000, 5 percent greater than reported two years ago.
One hundred and fifty sales and marketing managers at lube manufacturers responded to this years survey, saying they earn an average of $123,500. One hundred and three of their compatriots at lube distributors also responded; they report taking home an average of $93,000. One handsomely compensated individual reports making $300,000 a year – the highest in the survey and nearly 12 times what the lowest-paid respondent made.
These numbers show that sales and marketing salaries have continued their steady climb since LubesnGreases first began gathering data on lubricants industry salaries in 2001.
Its important to emphasize that the group responding to this years survey differs from those who responded in the past. This means the results should not be compared absolutely, because of differences in the reporting groups, who offer their answers anonymously each time.
Snapshot of a Salesman
The typical sales and marketing manager responding to the 2008 Salary Survey is male, 49 years old, and has racked up nearly 20 years of relevant work experience. In fact, 95 percent of this years respondents identified themselves as male, and as in years past, women were underrepresented in this job category. Only 13 sales and marketing execs – out of 260 respondents – identified themselves as female.
The average sales and marketing manager who works for a lube manufacturer has been with his or her current employer for 13.4 years. Those working for lube jobbers have a bit less tenure, and average 9.9 years with their current employer.
Overall, respondents at lube manufacturers and distributors average slightly more than seven years in their present jobs, and supervise a staff that averages five people. The median number supervised is 0, though, meaning at least half the respondents have no one to supervise. Although they may direct their companys sales efforts or have distributors representatives reporting to them, they are not managing a staff.
Thats an important distinction, because managers salaries tend to increase with the number of people supervised. The average salary for respondents who supervise five or fewer people is $104,400. For those responsible for six to 12 people it climbs to $118,800, and for more than 12 it jumps to $149,900. The same progression is seen whether the respondent worked for a lube manufacturer or a lube jobber.
LubesnGreases also asked respondents how long theyve been in their current job slot, and found that longer tenure on the job doesnt guarantee more money. For those who have been in their current position for more than five years, the median salary is $100,000. The median for those who have been in their current position for less than five years is $110,000 – 10 percent higher. This suggests that todays new hires or those recently promoted may have been able to negotiate higher salaries.
Despite todays troubled economy, could such competitive salaries be an indication that theres a good job market out there for lubricant sales and marketing managers?
In general, the job market is healthy for STLE-certified CLS sales and marketing professionals, if the professional has a strong skill set and demonstrated stability with their previous employers, said Jason McAuliffe, president and chief executive officer of Bonita Springs, Fla.-based Energy Recruiters Inc., an executive search firm that recruits professionals in the petroleum products field, among others.
We are seeing more hiring of sales and marketing professionals at the distributor level versus manufacturing level, he added. This is probably a result of higher number of distributors versus manufacturers coupled with the deep benches at the manufacturers.
The CLS program referred to by McAuliffe was launched by the Society of Tribologists and Lubrication Engineers in 1996. It identifies those individuals – Certified Lubrication Specialists – who possess superior knowledge and training in the field of lubricants. Does that translate to higher compensation as well?
Respondents to the survey who hold CLS credentials average $123,000 at lube manufacturers and $93,600 at distributors. Those without the certification average differ only slightly, averaging $124,200 at lube manufacturers and $93,300 at distributors.
Still, the credentials are becoming more widespread in lube sales and marketing offices, it appears. STLE now has more than 800 individuals on its CLS roster.
According to Robert Gresham, STLEs director of professional development in Park Ridge, Ill., such a specialist ought to be able to go into any manufacturing facility and be capable of applying the best lubrication practices. From my perspective, it is a measure of the degree to which this industry is becoming more sophisticated, he said. Today, in operations, we talk about lean manufacturing and, in maintenance, we talk about proactive maintenance.
Gresham is not surprised to see more distributors tapping these skills. For lube manufacturers, he said, it simply costs too much to put your expert, as we did when I was new to the industry, on a plane every time the customer has a problem. And more importantly, the customer cant afford to wait for the lube manufacturers representative to show up. Rather if he has a problem, he needs virtually instantaneous support. Only distributors are close enough to the marketplace to provide this high level of service.
The industry has always paid for those individuals who have expertise, and are accountable and responsible, Gresham asserted. CLS are in a better position to provide this higher level of value.
Working for the largest firms does tend to bring a fatter pay envelope, this years responses show. Almost a quarter of the sales and marketing respondents are with smaller lube companies having 50 or fewer employees, while a similar number work for companies ranging in size from 51 to 200 employees. Twelve percent work for companies with 201 to 500 employees, and the rest work at firms staffed by more than 500 people. Those in the latter category report an average salary of $130,100.
It is also beneficial to work in certain geographic regions of the United States. The highest reported salaries are in the Southcentral states, at an average of $122,000; the lowest are in the Northwest, at $94,600. Average salaries elswhere range from $104,300 to $113,000 per year, our respondents say.
Although women are deeply underrepresented in this field, they are by no means underrewarded. Five percent of this years sales and marketing respondents are women, and they reported an average compensation of $138,400 a year at lube manufacturers and $108,300 at lube jobbers. By contrast, the average for male respondents was $122,400 and $92,500, respectively.
Besides straight salary, our respondents also told us about other benefits and compensation. Eighty-one percent of those working at lube manufacturers say they got a raise in the past year, and 73 percent expect a bonus this year as well. At lube distributors, 46 percent got a raise and 46 percent expect a bonus.
Thirty-six percent of sales and marketing execs at lube distributors say they earn commission, versus 11 percent of those at lube manufacturers. And those working for lube distributors reported more opportunities for profit sharing (28 percent), while stock ownership was more common at lube makers (14 percent of respondents).