25% Failure Rate for New Sales Reps at the Expansion Stage is to Be Expected
Just last week, I had a conversation with Brian Zimmerman, OpenView’s Managing Director, about sales rep ramp up periods and failure rates. At the expansion stage, what kind of failure rate for new sales reps should you really expect?
VPs of Sales in our portfolio are often looking for the right answer to these topics, and given the competitive nature of our sales leaders, everyone wants to be the best in the portfolio (which I completely respect and admire!).
The unsatisfying truth: There really are no right or wrong answers. Depending on your company’s sales process, target market, buyer personas, deal size, sales cycle, etc. there will be a variety of answers, particularly in regards to the ramp up. Jeeze, I’m beginning to sound like a broken record! (I said pretty much the same thing in a recent post about benchmarking conversion rates). I mean think about it, if you have a 12 month sales cycle and your average deal size is over six figures, of course there will be a longer ramp up than in a sales organization with a transactional sales process.
Okay, I won’t completely leave you hanging here. I know you saw my post’s title and decided to read for some sense of validation! So here it goes, as Brian explained to me:
“Typically a 25% failure rate is to be expected. This is typical in a high performing sales team where objectives are consistently being hit and quotas are easy to define. However, occasionally in expansion-stage companies quotas may be low, allowing laggards to actually be mistaken for high performers during the first few years only to become failures soon after accurate forecasting and job requirements have been established. You might see your percentages rise as the stakes go up and territories get smaller.”
“You should assume that for the first month the rep will hit 0% of objective; for the second month 33% of objective; for the third month 66% of objective. By the fourth month hitting fully ramped up quota and maintaining. However, longer sales cycles should be factored in immediately.”