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Sales ramp time, also referred to as sales ramp rate or sales ramp-up time, is an indication of the amount of time it takes for a sales team to become fully productive after being newly hired. This metric takes into consideration the duration it takes to onboard new employees to the company, complete training on the product, and go through the entire sales cycle.
Having an understanding of the sales rep ramp rate is essential for planning bookings, revenue, and cash flow. Even so, it can be hard to track the sales rep ramp accurately in spreadsheets due to data normalization processes.
A data-driven perspective on the sales rep ramp is critical for precise sales capacity and top-line planning. The best way to acquire that evidence-based understanding is by consolidating financial data from systems like CRM, HRIS, and ERP.
The length of the sales ramp-up period can vary depending on the onboarding program, the experience of the new hire, and their aptitude. As per a survey conducted by The Bridge Group, this usually takes a bit over three months for a sales rep to meet their full objective of sales.
To calculate the sales ramp rate, the most accepted formula is the average duration of the sales cycle plus 90 days to cover the onboarding and training. After this duration, new sales reps should be able to hit their full sales quota. To get a more precise result, you can look at past performance data of sales reps and normalize it to time zero to know how long it typically takes for Account Executives to ramp up.
Training, coaching, and preparing a new sales rep can be a costly endeavor for companies, with no immediate return on investment. In fact, the onboarding process can cost a company three times the base salary of the new hire, and the longer it takes, the more revenue the company loses. Research has found that the time to get a new sales rep up and running can account for as much as 5% of annual revenue losses, which highlights the importance of companies and employees working together to reduce ramp-up time.
To help new hires become productive faster, having a well-planned sals onboarding system is essential. The sales onboarding program should involve an introduction, comprehensive guidance and education, practical instruction and the availability of sources for reference.