Not long ago, when we were putting together our eBook The Complete Guide to Inside Sales Analytics, I reached out to several sales experts and asked them what they thought the most underrated sales metric was. One of the sales leaders I spoke with was Doug Landis, VP of Sales Productivity over at Box. He mentioned that not nearly enough sales managers are tracking account executive’s (AE’s) ramping quotas in Salesforce.
A ramping quota is vital for two reasons. First, it ensures that management’s expectations remain reasonable as reps incrementally ramp to full productivity. But Doug Landis brought up another interesting point, which is that by tracking a ramping quota in Salesforce, managers can actually prove the success of their training efforts. According to Landis, “invest the time up front to ensure you’ve got reps’ start date, cohort and ramping quota in Salesforce so you can create dashboards that show how badass your on-boarding program is…” Tracking a ramping schedule in Salesforce helps you identify high performers and laggards early. It also helps show that you’re helping reps reach their potential.
One of the reasons that a lot of managers aren’t tracking ramping quotas in Salesforce is that there is often uncertainty about how long it should take newly hired AEs to be at full quota. Now obviously every rep and sales organization is different. And there is no truly one-size-fits-all ramping schedule. That being said, I’m going to offer a formula that you can use to set ramping quotas that should be in the ball park.
Here it is:
Onboarding time + 3 Months + average sales cycle length
Depending on your company, this might equate to something like this:
- Month 1: No Quota Requirement
- Month 2: 25% Quota
- Month 3: 40% Quota
- Month 4: 65% Quota
- M0nth 5: 85% Quota
- Month 6: 100% Quota
The idea is that during the rep’s ramping process, quota should be increasing incrementally. How did I get full quota at 6 months? Here’s where the formula comes in. I’ll walk you through it one section at a time.
Think of a rep’s onboarding time as their basic training/bootcamp. This is the portion of an AE’s career where you’re going to be the most hands-on. The most intense training might be only a week. But if you’re just training AEs for a week and then letting them lose on the world, chances are you’re doing something wrong. During the first few weeks, reps shouldn’t be expected to close any big deals. Instead they should be learning about your customers, competitors and features. They should be listening to recordings of ideal calls. They should be watching top performers in action in order to learn from the best.
After basic onboarding and training, add three months. This is about the minimum amount of time it would take the average rep to sell anything well, whether it’s a television or marketing automation software. Quota should ramp incrementally during this period, while reps get better and better at helping prospects reach buying decisions. The beauty of a ramping quota is that it allows reps to start by tackling smaller deals that are easier to close while they get their feet wet.
Additional Ramp Time = Average Sales Cycle Length
If your average sales cycle is days (bordering on transactional), chances are that it’s going to take reps a lot less time to master selling that product. But if your average sales cycle is 1-3 months (as with so many B2B products) then it’s going to take additional time for the rep to ramp. I like to use average sales cycle to help determine additional ramp time. Quota will continue to increase incrementally during this time.
One important caveat is that a ramping quota can be shorter if a rep has sold a very similar product. Basically, if they worked for one of your direct competitors. In this case, you can probably expect them to hit the ground running a lot sooner. Still, every product and sales organization is different. So even if they know how to sell a competitor’s product it doesn’t mean that they’ll be able to sell yours right away.
So let’s go through an example. Let’s say you hire a new AE to sell your marketing automation platform. She has a great track record in SaaS sales but hasn’t sold to marketers before. Let’s say that it takes her a good month to get on-boarded. Now let’s assume that your average sales cycle is two months. And let’s add another three months on top of that. That means that you shouldn’t expect her to be at full quota for a minimum of 6 months. Depending on the complexity of your offering, obviously this might vary.
Looking for more expert sales tips? I highly recommend checking out a webinar we recently hosted called How to Build Your Inside Sales Dream Team. It’s packed with some expert tips from sales leaders including our CEO. (FYI: I’ve already watched it three times!)