The Bridge Group is a SaaS sales consulting firm that we hold in high regard. They release outstanding sales data which can be found at their site, bridgegroupinc.com. We recently reviewed their “SaaS AE Metrics & Compensation Report” which compiles data from 287 executives at SaaS companies with median revenue of $27mm and median ACV of $32k. We also reviewed “Sales Development Metrics and Compensation research Report” which compiles data from 434 executives at SaaS companies with median revenue of $24mm and median ACV of $28k.
Both are worth the read, and below I summarize some of the big take-aways.
SaaS AE Metrics & Compensation Report
33% of pipeline is from Marketing. This includes inbound SDR support but excludes outbound. If your ACV is $5k to $25k, the share from marketing ranges between 48% and 58%. The larger your ACV, the less of your pipeline will come from marketing, but it is still very significant (At a $250k+ ACV, 25% of pipeline is from marketing).
You need SDRs. 81% of companies use SDRs, even smaller ones. “The inflection point for SDR support is driven by ACV. Somewhere between $515K ACV companies move from we can’t afford SDRs to we can’t afford not to have them. Laggards are more than twice as likely to not deploy SDRs.”
Expansion doesn’t sit with the AE. Only 27% of companies rely on AE’s for expansion. CSM’s and account managers were used by 46% of companies. Everyone else did a blend. High growth companies are less likely to rely on AE’s for either expansion or renewal.
As you mature, you have distinct sales roles. “59% of companies support the customer lifecycle with at least three distinct sales roles — SDRs, AEs, and CSMs (AMs, Renewal Reps, etc.). When we remove companies under $5M in revenues, that number rises to 67%. Companies above $50M are 1.8X as likely to segment engage, land, and expand into 3+ distinct roles “
Your team needs software. Excluding the CRM, the median spend on other technologies for AE’s is $300 monthly. The median sales stack has a CRM plus 5 additional tools.
Remote is in. 37% of open roles are fully remote, 47% are a blend, and only 5% are in the office full-time.
AE’s are slightly less experienced. Average experience prior to hire is now 2.7 years. This is down from the typical average of 3.0 years. “Notably, fewer companies require 3+ years’ experience — down from 42% in 2020 to 32% in 2022.” Additionally, “Respondents with ACVs over $100K require nearly 1.7X more experience than those with ACVs below $25K.”
Ramp time is up. “Average ramp times sits at 5.3 months. This is a significant increase over 2020’s result of 4.3 months.”
Average tenure is 2.2 years. So after ramp, you have roughly 22 months of productive sales from a new hire. “This is down from 26 months in 2020’s report. Considering lower experience requirements — which correlate with shorter tenure — and an overall fall in average tenure, this isn’t surprising. Median time at productivity now sits at 22 months.” Median annual turnover is 32% whether voluntary or involuntary. Only 12% is involuntary turnover.
64 activities per day. On median there are 18 phone activities, 25 emails, 13 Linkedin actions, and 8 other.
Quotas and achievement. Median quota is $740k annual. 66% of AE’s achieve quota. “There has been remarkable consistency around this metric over the years. Two-thirds of reps achieving quota seems to be the natural equilibrium.”
Median earnings. On target median is $167k split 54/46 between base and commission. “Continuing a decade+ trend, median OTE rose to record highs in 2022. While quotas have increased at roughly 2% annually, OTEs have risen at more than 5% CAGR over that same period.” Regarding commissions, “at 100% of quota, the median commission rate is 10.3% of ACV.”
Teams are small. The median number of reps reporting to a leader is 7. Managers make $173k, Directors make $253k, VP of Sales make $296k on median.
Sales Development Metrics and Compensation research Report
Reporting to sales. 68% of SDR’s report to the head of sales as opposed to marketing. However, “a point worth mentioning is that inbound teams are roughly twice as likely to report to Marketing as blended or outbound groups.”
2.6 to 1. One SDR generally supports 2.6 AE’s. “High-Growth companies report lower SDR-to-AE ratios than Laggards”
Remote heavy. “In 2018, 48% of companies reported reps in the same role working in different locations. Due to COVID/remote/WFH, that number increased to 64%. Note that 23% of companies report plans for “fully remote” SDR groups for the foreseeable future. That was nearly unthinkable just a few years ago.”
The quality of meeting. “As a rule of thumb, you should deploy an introductory meeting charter when the market for your product is immature and/or when your Account Executives are suffering from “empty calendar syndrome.” If your sales team is screaming for more “at-bats,” then break glass and set meetings. Conversion rates, qualification criteria, and cost per meeting all go out the window when AEs calendars are anemic. On the other extreme, if your AEs are drowning in pipeline, then a fully qualified opportunity charter is appropriate to ensure each new opportunity has been vetted for qualification.”
Experience at hire. SDR’s hired today have only 1.2 years of experience. In 2010 it was 2.5 years.
Ramp time and tenure. The average ramp time is 3.1 months and the average rep lasts 1.8 years. That means you have about 17 months of productivity. Interestingly, “Companies hiring the least experienced reps experience significantly lower average tenure. This point is critical and needs to be baked into your overall strategy.”
Promotions. 93% of companies have a path for an SDR to become an AE. “For those respondents with an SDR-to-AE promotion path, reps spend an average of 17.5 months in the SDR role prior to promotion.”
Attrition is high. Total attrition averages 39%, with involuntary attrition making up nearly two-thirds of that.
SDR salaries. SDR’s total comp is $76k of which $50k is base salary.
Activity. SDR’s do 104 total activities of which 40 are calls, 40 are emails, and 16 are Linkedin.
Dials per day. The average is 40 dials per day leading to 4.4 quality conversations per day. “By definition, phone-centric groups average higher dials per day. Interestingly, they also report 2.1X as many average QCs per day.” SDRs make 10.6 attempts per prospect.
Quota attainment. “On average, 68% of reps in a given group achieve quota. There has been remarkable consistency around this metric over the years. Two-thirds of reps achieving quota seems to be the natural equilibrium.”
Rep to leader ratio. The number of SDRs reporting to a manager is 8 on average. The leader comp is $128k on average.
The full reports are well worth the read and has charts and graphs for every metric. Again visit bridgegroupinc.com to get them.
Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at blossomstreetventures.com and email directly at firstname.lastname@example.org. We invest in companies with run rate revenue of $3mm to $30mm, with year over year growth of 20% to 100%+ depending on revenue. We lead or follow in growth rounds and special situations like inside rounds, small rounds, rushed rounds, corralling investors with our term sheet, cap table clean up, and extensions. We can commit in 3 weeks and our check is $1mm to $4mm. Also visit https://blossomstreetventures.com/metrics/ for always up-to-date SaaS metrics.