Practical RevOps Analytics Series: How Long Does It Take for your Reps to Ramp?

By Rob Käll, CEO & Co-founder Cien.ai

A Very Common Question…

If your B2B company is gaining traction, there will be expectations to hire more sales reps, to capitalize on this momentum. At that point, investors, board members, or other executives may ask the CEO or the VP of Sales a deceptively simple question: “How long does it take for your reps to ramp up?”.

“One of the most common ways a fast-growing B2B company (especially one fueled by VC or PE funding) can fail and get into serious trouble is to have disappointing growth due to high rep ramping failure rates.”

Rob Kall, CEO Cien.ai

To Ramp or Not to Ramp?

The reason for the question is, of course, that most seasoned business people know that very few sales reps reach full productivity in the first couple of months at a new job. Even the best reps, who already are experienced sellers and know the industry and the product, will not be able to win a lot of deals without building a solid pipeline, which takes time. Add to that the small subtleties in terms of company processes, differences in client expectations across firms, and other things.

So, the answer most often heard is something like: “It takes on average 6-months for our reps to ramp.”.  It’s a reasonable-sounding answer, but is it true?  Let’s find out!

What is a Ramped Rep?

To start we need to define success: It’s when a brand-new rep reaches reasonable sales results within a specified period. So, what is a failure then? Someone who does not reach those results? Sure, but more commonly, a rep that quits or is fired before they ever reach reasonable results.

So, I deliberately did not use the word “quota” above, but instead the vaguer “reasonable sales results”. That is because quota is an arbitrarily assigned value that is used for incentives and may have been designed for other reasons (avg. quota attainment is around 54%*, but in some companies, almost everyone reaches quota, and in others just the absolute top performers). If quota is a dollar amount, it may also not apply to some types of roles like Sales Development Reps (SDR).

A Useful Rep Performance Metric

A better metric is Average Quarterly Booking (AQB) or Average Quarterly Pipeline Creation (AQPC). Here is how I suggest you calculate this value: Take the total bookings for the quarter for a particular role (e.g., your AEs), and if applicable, also segment by distinct groups/divisions. E.g., if you have 10 already ramped AEs in your Enterprises Group and they sold for $2.5M in the quarter, the AQB is $250k.  I like to use quarterly values instead of annual because some companies are very seasonal and sell a lot more during certain parts of the year.  Some people prefer median values to averages, and that works as well, as long as you don’t have a large number of reps that sell for $0 in some quarters, only to do one or two big deals a year. Do not include the reps you just hired in this calculation, since they will skew the AQB down.

Now that you have the AQB, you can easily segment your reps into 3 categories: “Overperformers”, “Performers”, and “Underperformers”. I suggest allowing a +/-30% deviation from the AQB in either direction. So, in this case, an underperformer is anyone selling for $175k or less, and an overperformer is someone selling more than $325k in the quarter.

The Importance of Understanding Success and Failure Rates

When you have a clear performance definition, you can easily map the reps into these three buckets for each quarter. Trending this data over time can yield very interesting insights. Are there patterns that are repeated?

What you want to do next, is to find the date when each rep had their first successful quarter (as a performer or overperformer).  Put that as a field in your data table and calculate the difference in months from their hire date. That’s the number we have been looking for. Now take the average of that per quarter for reps hired in that quarter, and trend over time (you will most likely not get meaningful numbers for the current and previous quarter, since “the jury is still out” on those).

Again, looking at this number over the last few years can tell you a lot. Is the trend going in the right direction? Many times, it is not…

What Are The Reasons for Some Reps Not Ramping?

When you have accurate metrics, you can start looking at how to drive change. The immediate instinct is to improve coaching, provide better training materials, etc. But that may not be enough. Other ideas are to give new reps “easier” deals – e.g., giving them smaller inbound accounts. It’s also important to look at things like the manager-to-rep ratios and the total value given to tenured reps vs. the newly hired reps.

Conclusion

One of the most common ways a fast-growing B2B company (especially one fueled by VC or PE funding) can fail and get into serious trouble is to have disappointing growth due to high rep ramping failure rates. In our experience, the best companies have less than 40% failure rates and get their reps up to a reasonable performance in between 5-10 months depending on deal complexity (6 and 7-figure average deal sizes take longer of course). But many companies have much worse metrics and some just keep saying “6 months”.  Don’t be that person anymore

About the Cien.ai Practical RevOps Analytics Series

This article is part of our Practical RevOps Analytics Series, inspired by our work with B2B business leaders, growth consultants, and PE operating partners. These articles focus on the technical aspects of improving GTM performance. If you want to dig in on the business details of how to improve the concepts we use here, please refer to our “Growth Essentials Analytics Series”.