When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

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In many SaaS businesses, sales reps play a key role in closing deals. In those situations, the number of productive sales people (Sales Capacity) will be a key driver of bookings. It is important to work backwards from any forecasts that are made, to ensure that there is enough sales capacity. I’ve seen many businesses miss their targets because they failed to hire enough productive salespeople early enough.

It’s also worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps.

When computing Sales Capacity, if a newer rep is still ramping and only expected to deliver 50% of quota, they can be counted as half of a productive rep. That is often referred to as Full Time Equivalent or FTE for short.

Another important metric to understand is the number of leads required to feed a sales rep. If you are adding sales reps, make sure you also have a clear plan of how you will drive the additional leads required.

More SaaS & Tech Growth Strategy Stats

In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

80% of venture capital investments take place in the enterprise

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

The median annual unit churn for SAAS companies was 10% in 2016

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

After $10M in ARR, the median growth rate slows to just under 50%