So quotas are relatively well understood, if sometimes complicated to get right in practice. Keybanc and Sapphire have some great overall metrics here:
Overall, the media AE closes $750,000 a year, and that’s actually up from 2022 — mainly due to hiring freezes and contractions. In any event, that’s good median data. Enterprise reps tend to close more ($1m+), and SMB reps less (maybe $500k), with $750k net new bookings per year the median.
And how many hit quota? While different data sources report different numbers, the companies themselves in the Keybanc Sapphire data report 80% hitting quota attainment. That sounds high to me, but still useful to see the data:
One thing I’ve never really had much data on is exactly below what level of attainment sales reps typically are at risk of losing their jobs, however. 40% attainment? 30%?
Salesforce recently shared theirs in a Bloomberg article:
Their “PIPs” or being put on a performance plan to be managed out kick in now:
- After 1 quarter, not 5-6; and
- If an enterprise rep closes less than $100k a quarter ($400k a year annualized); or
- If an SMB rep closes less than $40k a quarter ($200k a year annualized)
That sounds a bit harsh on the surface, but it actually may be generous, as it likely ties to about 30%-40% attainment. An enterprise rep at Salesforce probably has to be able to close $1.5m or so a year to take home those comp levels, and an SMB rep likely $800k or more. If you can’t get close, for too long — any organization will do much better routing those leads and accounts to those who can close.
The article also notes:
- Fewer folks are now able to claim commission on a deal; and
- With growth slower, Salesforce thinks there is less need for as many CS professionals.
It all sounds a bit harsh at first — compared to the Go Go days of the 2021 or so. But many of the metrics of those days didn’t really make much sense, with hindsight. They weren’t sustainable.
Folks falling below 40% attainment really are just taking leads away from those that can actually close. And giving folks more time, well, it sounds good and feels good. But too much time doesn’t make a rep that can’t close any better of a closer.
The post Salesforce: Your Job’s at Risk If You Sell Less Than $400k a Year appeared first on SaaStr.
via https://www.aiupnow.com
Jason Lemkin, Khareem Sudlow
