Bridge Group is a B2B SaaS sales consultant. We hold them in very high regard and connectBridge with our portfolio companies when there is a need. They do strategic assessments, write playbooks,and can also do management training and coaching. We did a Q&A with Kyle Smith at Bridge (ksmith@bridgegroupinc.com) aboutwhat he is seeing in the enterprise SaaS sales market. A summary of the conversation is below.
Experienceof new hire AE’s is up. Overthe past 2 years, because of the tighter environment, experience required athire for account executives has gone up a full year at 3.6 years. Employers have become more picky about whothey’re hiring. You’ll see 150 to 200applications on good job postings, and we haven’t seen that in a longtime.
AEefficiency came down, materially. Ramptime also has gone up by 1.5 months for a total of 5.7 months. More importantly, win rates are also down to19%. 22% to 25% was always theexpectation, but now we’re at 19% which is a big move. If you’re talking about pipeline coverage, a lossin close rate from 25% to 19% means you need 5x pipeline coverage instead of4x.
Quotasare up. Quotasare now $800k on median, but have only increased 2% annually over 12 years. A rep that hits that quota can expect to make$190k a year. Kyle doesn’t believe inraising quota just to raise quota. Thereneeds to be logic and reason behind it, otherwise you’re demotivating theAE’s. If quota does go up, you need toincrease spend on marketing, release new product to sell, or give AE’s moretools to hit that higher quota. If youincrease quota without providing the rep more ways to win, you’ll ultimatelylose your best reps.
TheROI on AE’s is still good. Thereturn on a rep measured as bookings achieved divided by total compensationstands at 4.1x. The 25th and75th percentiles are 3.2x and 4.8x, respectively. These are still good numbers, but they aredown.
Hittingquota is harder. Thepercentage of the team hitting quota is 51%, down from 65%. Back when the teams were hitting 65%, theoverachievers were far outperforming the underachievers, so the team overallwas still hitting quota. At 51% however,teams as an aggregate are no longer hitting quota.
Makeyour reps do prospecting. Accountexecutives have become less dismissive about prospecting and are doing more ofit. AE’s need more active deals becausethey’re not closing as many as they used to, so they’re being morepro-active. Kyle believes every rep, nomatter the tier, should be doing some outbounding. Sitting around waiting for an SDR ormarketing to funnel you a lead means you’re highly likely to miss or havevolatile quota attainment. Sales leaderswant consistency and repeatability in rep performance, so doing some level ofprospecting does improve rep consistency. Individuals that can self-generate some level of pipeline always havemore value than those that don’t.
Bridge is an outstanding firm for righting or building the enterprisesales engine. Reach out to them. We’ll continue to interview Kyle quarterly andshare data they release.
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