What is Sales Ramp Up Time?
A company’s sales ramp up time refers to the amount of time it takes a new salesperson to become fully productive from when they are first hired. Often, ramp time includes initial product training, sales coaching, and any and all on-boarding that is part of the new-hire process. Understanding sales ramp up time is critical for sales organizations to accurately forecast, recruit, and plan for capacity needs.
Here is everything you need to know about sales ramp up time, including how to calculate it, the importance of ramp time in sales capacity planning, and best practices to ramp sales reps successfully.
Calculating Ramp Up Time
Different businesses calculate sales ramp up in different ways. Factors like industry, growth rate, company size, and training program all influence how an organization defines and calculates this equation to full productivity. Regardless of how it's calculated, the importance of sales ramp time remains constant in every organization. Here are three common ways different organizations calculate sales ramp time.
1. Ramp by Length of Sales Cycle
Sales Ramp Up Time = Average Length of Sales Cycle + 90 Days
The simplest method of calculating your sales ramp up time is by looking closely at the length of your sales cycle. For example, imagine the average deal takes between 3-6 months to close. As a manager, you should conclude that a starting rep will need at least three months to be prepared and trained well enough to close a deal successfully. If a rep is new to the industry or in a sales role, it might take even longer for them to ramp up to full productivity.
Best Practice: Give your sales enablement and training team and new reps buffer time to ramp up to full productivity. Aim for allowing the length of your sales cycle plus an additional 90-day period. You should also consider time for your company's general onboarding and training processes that every employee goes through.
In our example above, the ramp time would be six months (3-month sales cycle + 90-day buffer = 6 month ramp).
2. Ramp by Time Needed to Achieve Quota
Sales Ramp Time = Average Length of Time to Meet 100% of Quota
The quota attainment method is the most commonly used sales ramp time calculation. This method works best for organizations where sales teams might not directly sell a certain product or don’t have an average sales cycle. The quota attainment method helps give a more general assessment of sales ramp time with the mindset that not all sales reps will start off with the same account set up and territories.
Best Practice: Not all your new sales reps start on the same starting line. Some will inherit existing accounts and reach quota faster. At the same time, some reps may consistently hit a high percentage of their quota, but never officially hit 100+ percent. To compensate for this difference, some companies establish a draw against commission within their sales compensation plan that equals a percentage of expected commissions following training.
3. Ramp by Training and Experience Level
Sales Ramp Time = Training Period + Length of Sales Cycle + Level of Experience
The training and experience level method is simple. Take the average amount of time given for training new sales reps in addition to the average sales cycle length. Also, add in an allotted amount of time to account for any former sales background. No matter how you spin it, training your sales teams is critical, “effective sales coaching can increase top-line revenue up to 20 percent,” according to CEB.
For example, two weeks added for a new hire with previous, relevant experience. On the other hand, two months would be added for a new rep who has no prior experience.
Best Practice: Know who you're hiring and customize training to them. Regardless of the method your sales team uses to calculate sales ramp up time, it’s necessary that you know what it is and use it to your advantage for strategic sales planning. Understanding this aspect of your sales training process will prepare key influencers to make more informed decisions around quotas and sales plans.
Want to learn more about ramping up sales reps, coaching, and training reps effectively as they gain experience? Download our guide, "How to Build and Retain Sales Reps to Drive Top Performance."