A Complete Guide To Sales Ramp Rates In Business

Sales play a critical part in running a business. Whether you offer your customers access to services or products, you need professional sales personnel who can work with clients and land your business more sales. As your business grows, you may need to add more sales staff to your team. Your sales team plays a vital role in your business, so it is essential to ensure you have appropriate measurement systems.

The use of sales ramp-up time is one of the most popular strategies companies use when they want to determine the costs of getting the sales team up to the level of total productivity. In this post, we take a closer look at what the sales ramp-up period is and how you can use it to get a better overview of how effective your current strategies are.

An Overview Of Sales Ramp Rate

We will start by looking at what sales ramp rates are and how they are involved with the onboarding process of new teams and reps.

Sales ramp-up time generally refers to the time your business takes to get a new sales team or sales rep up and running at maximum productivity. Even when you hire a rep with over a decade of experience, companies do not all use the same type of sales strategies. Thus, the new rep will first need to be educated about what products or services they are expected to sell. Additionally, they need to learn more about your company and understand what you expect from them.

Experienced reps may also need some training on their specific sales systems. All of these factors can take up a significant amount of time, depending on how quickly the rep or sales teams can comprehend the information presented to them.

From the date you hire the rep or team to the date they can confidently sell the products and services your company offers – this is the sales ramp-up time.

Research shows that the average sales cycle length for this onboarding and productivity process is around 3.1 months. This means you will likely run a loss during these three months when paying a salary to the sales personnel. Still, they cannot effectively contribute to the productivity of the sales strategies used by the company. Note that this is an average sales cycle length. Some companies may be able to get to total productivity sooner, whereas other scenarios may require more time.

The Importance Of Calculating Ramp-Up Time And Rates

Apart from understanding the ramp-up period, you should also know why it matters for your business. When you decide to set up a system that calculates the ramp-up rate for your business, do not think of the statistics and figures you collect as only extra sales data.

Many business owners and leaders fail to understand this data’s role in their company. The sales ramp-up rate gives you more details about how valuable a sales rep is for your business. It is an important period for the business and the new sellers that you decide to get on board.

For a rep, this particular period can significantly impact their career. When the ramp-up period goes well, it essentially sets the rep up for success within your sales team. This shows that the rep has the potential and the ability to provide your business with improvements in your key metrics. On the other hand, when the rep does not offer appropriate performance during this particular period and fails their quota attainment, then it can negatively impact their position at the company.

When Should You Start To Calculate Sales Ramp Up Time

Timing is crucial in ensuring the data you collect for the calculation is accurate and useful. You also need to ensure you track data for an appropriate period – as stopping the tracking system in place too soon will not give you accurate data regarding rep performance.

Start tracking data the moment you decide to hire a new sales rep. This will ensure you have more data to work with in the end. Then, continue tracking until the sales rep is ready to bring in high-quality leads without needing extra guidance from a sales leader.

You should continue collecting data when you provide the sales reps with hands-on practice. At this time, you will evaluate the efficacy of the sales coaching that you offered the rep. This still forms part of the training period for new sales hires.

How To Calculate Sales Ramp Rate

Learning how to calculate the sales ramp rate of your business is essential. Calculating ramp-up time in your business can feel confusing, especially when you consider that multiple strategies can be used.

Each of the strategies has its pros and cons. Whether you want to implement gamification or another strategy with your new hires, you must pick a strategy. It is essential to assess each of these options carefully. Take your own business in mind and look at how you currently track your sales process and strategy. This can help you determine which strategy will be the most suitable option for your company.

Productivity Vs. Quota

One of the most popular options that companies often turn to when they want to determine sales ramp time and related statistics is by turning to productivity vs. quota measurement.

This particular strategy requires you to set a benchmark or quota for the sales reps you hire. When you get a new hire, determine what you expect from them in a specified period.

The strategy should not focus only on future predictions and expectations. This can cause your team to underperform in the eyes of the quotas that you have set. This is because only focusing on future predictions will not set realistic goals for your new hires.

This means you must keep the historical data you have collected in mind. Analyzing this type of data can help you set more realistic quotas that you want the new hires to achieve.

Sales Rep Experience

One issue with productivity vs. quota methods that comes to mind is that they do not consider the experience of a new hire that you add to the sales team. This means you may have inconsistencies in your sales ramp rate when you solely focus on the productivity vs. quota method. This is also a great option when you want to see how a new rep could help to implement sales gamification in your business.

When you use the sales rep experience method, you will account for the expertise presented by the new hire that forms part of your sales team. This method is an excellent strategy when you want to use strategic planning to set up systems that will help with your sales ramp time calculation.

Can Sales Ramp Rate Calculations Be Automated

With many advancements in modern technology, companies are turning to digital systems and platforms to streamline specific processes. Automation is becoming very popular, too, as this can reduce the effort demanded from sales managers to set up data collection systems manually constantly.

Most companies use Excel or another spreadsheet program to calculate the sales ramp time. Unfortunately, this process is often quite tedious. It takes a significant amount of time and requires precise calculations to ensure the accuracy of the results you will depend on during planning sessions.

Some methods can be used to automate the process of calculating the ramp-up period and rate. The first step for automation involves setting up both HR systems and a CRM for your business. You must add all relevant data to these systems, as this will ensure you have the appropriate information to work with.

Once you have these systems up, you can start looking at automating these processes. If you opt for automation, choose a system that offers appropriate integrations with the sales cycle platform, CRM, and HR tools you use. This will ensure data can be easily retrieved from these systems and placed into the new system that will automate the process of calculating your ramp period and rates.

Example Scenario Of Calculating Sales Ramp-Up Time And Rate

Taking a closer look at examples can help you better understand how to set up a plan for your ramp-up period. We are going to take a look at an example scenario in this section.

In this example, you hire a new rep and give them a three-month ramp-up period. The idea is to ensure the rep can complete product training and start hitting their goals. During the first month, the rep does not have many expectations on reaching their sales goals or quota – as this is generally considered one of the training periods they must go through.

By the second month, they will start setting goals for themselves as part of the onboarding plan. They will not try to hit the exact figures as top performers at this point, as they want to test their skills. The rep will still go through training processes at this time, as they need to continue developing their sales skill.

When they reach the third month, they should have a higher sales quota to aim toward. This is the month during which the rep needs to work hard to ensure they can effectively achieve the goals set out for them. If the rep can achieve their goals at this point, it provides evidence that they can become a worthy asset to your business. On the other hand, if they cannot achieve their quota at this time, you will need to consider extending the ramp-up period.

What To Avoid When Assessing Sales Ramp-Up Period

Following one of the common strategies for assessing the ramp-up time related to the onboarding of sales reps is useful. It helps to ensure you can obtain accurate data that can be used to plan ahead effectively for the coming months.

With this said, you should be wary of a couple of things. In this section, we will look at what you should avoid while assessing your sales cycle and sales ramp-up period.

• As we have mentioned, tracking should start when your onboarding program is complete. The first day of the hiring process already counts toward the ramp-up time. Do not delay, as some businesses make the mistake of only starting the count when training begins.
• It’s essential to choose one method of calculation and stick to it. Do not try to combine different methods that can be used to calculate sales ramp-up time. This can be confusing and cause your figures not to count up in the end.
• Avoid combining calculations for a sales team already undergoing training and data related to new reps. Keep the data separate when sales reps are onboarded at different times.

Let’s Take it up a Notch.

Sales ramp-up time is essential to calculate when onboarding new sales reps or a new team. The process may seem tedious, but it becomes easier once you take things step-by-step. The comprehensive guide in this post to help give you a better understanding ramp-up time and related factors that you should calculate. But, for an extra boost, Spinify can help you be better prepared and make appropriate plans for times when the rep or sales team is lacking productivity. Our platform is the #1 in the world for Sales Gamification, so we know exactly what it takes to get your team working at their full potential. Book a demo and start shaping your dream team with Spinify today.