Cost of $1 Varies by Channel
The sales investment includes total labor costs, ongoing sales expense costs, management costs, as well as marketing investments which should equal sales investments (cost of customer acquisition varies by channel). i.e. for every dollar spent in sales, a dollar should be spent marketing to the distribution channel.
• SMB Field Sales: Minimum 2 reps per market, plus requires 2+ net new customers per month, with >$60,000 recurring revenues per customer.
• Inside Sales: Minimum 3 reps, plus requires 2+ net new customers per month per rep with >$18,000 recurring revenues per customer.
• Acquisition Model: Location Territory Leader with $1M new recurring revenues sales annually.
• Majors Model: Industry Leader plus revenue operations team focused on industry specific customer segment with $1M in new customers billed annually. .
• National Model: 5 person sales and revenue operations team focused on customer deals greater than $200,000.
Therefore, when developing sales metrics and quotas: assuming 20% EBITDA target with 45% Gross Profit, then the sales group quota / contribution can be calculated as 2 to 8% of billed recurring revenues. With sales quota 8X to 14X the total compensation per sales rep.
Read more online about sales metrics from a research survey of B2B SaaS companies on key inside sales metrics including group structure, ramp and retention, quota and compensation, activity & technology and leadership.
Sources:
http://www.forentrepreneurs.com/bridge-group-2015/
http://www.forentrepreneurs.com/saas-economics-1/
https://hbr.org/2013/12/new-insight-into-key-sales-metrics/
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