X
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XLR5

Sales Director

Catalyst
Good Citizen
Contributor
+1

What's the ratio a BDM/AE should be attaining vs their OTE?

Are there any guidelines to this? I've hear 3:1 is ok, 4:1 as the target and 6:1 or more as outstanding, where they should be generating yearly vs their OTE.


This is for SaaS of course, and I know it will depend on other factors such as industry, speed of onboarding, presales, valocity, etc. But any base indicators would be great, since the ratios above seem to be too steep so I feel like I'm missing something.


Any input would be greatly appreciated.

๐Ÿ‘‘ Sales Strategy
๐Ÿ’ฐ Compensation
๐Ÿ“ณ SaaS
5

21 comment

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poweredbycaffeine
WR Lieutenant
3
โ˜•๏ธ
Attainment of what? Quota?
XLR5
Catalyst
0
Sales Director
Yes sorry I wasn't clear.
poweredbycaffeine
WR Lieutenant
1
โ˜•๏ธ
This makes me feel confused by your ratios above. They should be attaining 1/1, with a small percentage attaining >100%. If not, youโ€™ve designed a bad comp plan that was based on overshooting growth.

Care to expand upon your line of thinking?
XLR5
Catalyst
1
Sales Director
Ok as an example if a BDM/AE is on 50k base and 25k commission if 100% attained, they'd "cost" the company 75k, and their quota should be 3x, 4x, 5x, or 6x those 75k. I want to find out what that multiplier/ratio is.
poweredbycaffeine
WR Lieutenant
3
โ˜•๏ธ
Ok so youโ€™re asking about Quota as a ratio to OTE not % of attainment.
XLR5
Catalyst
1
Sales Director
Yes you're right. I'm sorry! Any ideas?
poweredbycaffeine
WR Lieutenant
4
โ˜•๏ธ
2:1 and 3:1 are consummate with comp plans Iโ€™ve built. MM SaaS tools across multiple industries. Anything greater and you are overextending your talent while increasing your metrics to make you look strong to investors. I frown on that.
XLR5
Catalyst
3
Sales Director
Right this feels much more sensible to me. I feel like the 4:1 to 6:1 are probably in other industries but in SaaS since we're talking recurring revenue the ratios should naturally be lower, am I thinking in the right lines?
poweredbycaffeine
WR Lieutenant
3
โ˜•๏ธ
I feel like you are on the right path. You can do 4:1 but youโ€™re probably selling a super low margin service or product that costs too much to comp on.
XLR5
Catalyst
1
Sales Director
Just to confirm when we say 3:1, the rep sells 300k for any 100k he earns in my situation. A few reps are all under 2:1 but two are over 8:1 (they're inhuman). I'm trying to bring the other ones up hence why I'm looking into this now.
poweredbycaffeine
WR Lieutenant
0
โ˜•๏ธ
The max ratio should be 2:1 in my opinion, but if your business proves a median of 3:1 is feasible, then lock it in.
JustGonnaSendIt
Politicker
0
Burn Towns, Get Money
I'm in Enterprise Cyber here, ratio is 11:1...
Take that for what you will.

This is an improvement on my 30+:1 ratio from last FY.
XLR5
Catalyst
0
Sales Director
Wait... for every 100k you make you have to generate 3mil?
JustGonnaSendIt
Politicker
1
Burn Towns, Get Money
@XLR5 Last FY, yes. Luckily, quotas are much more reasonable this year.
XLR5
Catalyst
0
Sales Director
Wow... that is incredible. I hope you're earning decent commission from that.
JustGonnaSendIt
Politicker
0
Burn Towns, Get Money
It seems that as the size of deals increases, the Variable Comp-to-quota ratio goes way up. One of the things folks should consider in seeking enterprise and strategic roles with big corporate tech companies.
I typically do 5-8 deals / year, ranging from 250K - 5M per deal. 9-24 month sales cycles, with a single-digit number of accounts.
FinanceEngineer
Politicker
1
Sr Director, sales and partnerships
It all depends on the meeting attainment rate of the BDMs and the close rate of those. There are also other inbound and AE direct reaching out that needs to be done. So there can be 1 or 2 BDs doing a larger team or just a 1 to 1 ratio. It all depends.
GDO
Politicker
1
BDM
1to1 would be awesome imo
FinanceEngineer
Politicker
0
Sr Director, sales and partnerships
In very specialized products/industries, I have seen it.
jefe
Arsonist
1
๐Ÿ
I think @poweredbycaffeine has got you covered.
You might want to be a little more clear in your post next time though!
Beans
Big Shot
0
Enterprise Account Executive
I'd kill to be 1:1 but I'm currently 3:1.
You'll always need to be performing your own cold outreach if you want to succeed though.

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