Executive summary:
Ramp-up time can typically be calculated in three ways:
1. Based on sales cycle length
2. Based on training and experience
3. Based on time to hit 100% quota
Ramp-up time is like the GPS of a sales rep's journey from a newbie to a full-blown rockstar. It's the time it takes for them to get onboarded, trained, and up to speed from the day they join your team.
According to The Bridge Group, the average ramp-up time for an SDR (Sales Development Rep) is slightly over three months, while for an AE (Account Executive), it's just under five months.
Getting the reps up and running is an investment of time and money, so let’s see how best to do this.
How to calculate sales ramp-up time?
Interestingly, three primary methods are used to calculate this mysterious ramp-up time.
1. Based on the sales cycle length
One way to figure it out is by considering the sales cycle. Simply observe how long it takes a seasoned sales rep to close a deal – that's the target for a new sales rep's ramp-up time.
But remember, a buffer is essential to play it safe! This buffer time aligns with the sales cycle itself.
A quick tip: Add one extra sales cycle time to the mix. For example, if your sales cycle lasts 30 days, your ramp-up time would be:
Ramping up based on sales cycle length is best suited for smaller companies with growing sales teams that hire reps in cohorts.
It's like having a handy roadmap to monitor everyone's progress, distinguishing the stars from those needing more support. But here's the catch – this method isn't the best fit for enterprise sales teams with long sales cycles. Waiting for that extended period before your reps start bringing in revenue can be quite the show-stopper. Time is money, after all!
2. Based on training and experience level
Let's zoom in on another nifty method to calculate ramp-up time – focusing on training and experience level! It's all about how long it takes a rep to complete on-the-job training, which is directly linked to their experience level.
Picture this: a fresh college graduate stepping into the sales world for the first time. They'd naturally need more time to get the hang of things, soaking in all that product knowledge and sales processes during training.
On the flip side, when you bring on someone with experience- a sales veteran who's been there, done that – they'll need less time for training. They've got the sales mojo in their pockets, after all!
By smartly adjusting the training time according to experience, you're crafting the perfect ramp-up journey for each rep. It's like tailor-made onboarding that sets everyone up for success!
3. Based on time to reach 100% quota attainment
Here's another method to calculate ramp-up time – focusing on how long your reps take to achieve 100% of their quota.
If your existing reps typically hit their full quota in an average of 2 months and two weeks, that becomes your ramp-up time for new sales reps.
This approach works best when your company doesn't have a standard sales cycle length. For instance, if you sell multiple products to various Ideal Customer Profiles (ICPs) across different geographies, using the time-to-quota achievement as a benchmark ensures a flexible and tailored ramping process for your diverse sales team.
It's all about finding the sweet spot that fits your unique sales landscape like a glove!
What about commissions during the ramp-up period?
Typically, commissions are paid in full for the entire ramp-up period. That means whatever commissions a sales rep would have earned at 100% quota achievement should ideally be paid out during their ramp-up phase.
Let's break it down with an example: If your company follows quarterly commission payouts and the ramp-up time is set at 90 days, then during that quarter, 100% of the commissions should ideally be paid out to the rep. It's all about ensuring that reps feel the love for their hard work and efforts right from the get-go!
Learn about sales commission floor for ramp-up period
Wrap Up
Sales reps need a certain amount of time to get into the know-how of things at your company. Giving them adequate time and relevant training will set them up for success, which will bode well for your company.
