What is Sales Ramp Up Time?
A company’s “sales ramp up” refers to the amount of time it takes a salesperson to become fully productive from when they are first hired. I like to think about it in terms of gearing up for a productive gym session. How long does it take you to psych yourself up, get prepared for the sweat or pain you’re sure to endure, to push past your personal best, to exceed your expectations (or the expectations of your trainer)?
You could also say sales ramp up is also the most foundational information a company must know to follow through with accurate forecasting and successful sales recruiting.
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.
But the question remains: Do you know how to calculate your sales ramp up time? Here are a few different methods.
Calculating Ramp Up Time
Sales cycle: Ramp up = length of sales cycle + 90 days
Looking at your sales cycle is likely the simplest method of identifying your sales ramp up time. The only information necessary is the length of your average sales cycle. Let’s say most deals take between 3-6 months to close. As a manager, you should conclude that a starting rep won’t be able to close a sale for at least 3 months.
Solution: Give yourself (and your rep) some buffer time. Tack on an extra 90 days to your average sales cycle, plus or minus some days depending on your business’ onboarding and training process. Here are a few sales onboarding best practices to follow.
Quota Attainment: Ramp up = length of time to reach 100% quota
Using quota attainment is the method used by most organizations. Maybe your sales teams don’t directly sell a certain product, or don’t have an average sales cycle. If so, this would be the best way to go about calculating sales ramp up.
The catch: Not all your new sales reps start on the same starting line. Some will inherit existing accounts, and reach quota faster. And at the same time, reps may consistently hit a high percentage of their quota, but never officially hit 100% of quota. Is there a solution? Some companies establish a draw against commission program equal to a percentage of expected commissions following training.
Training and Tenure: Ramp up = training period + length of sales cycle + experience
The training and tenure 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.
The moral of the story: Know your sales ramp up. Whichever method your sales team uses to understand your calculation, it’s necessary that you know what it is. Understanding this aspect of your sales training process will prepare key influencers to make more informed decisions around quotas and sales plans.