Quantifying the impact of sales enablement investment
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We also need to account for 4 months of full productivity of 10 new AEs under the existing ramp program of 8 months. Using the same math as above, 10 new AEs x 2 deals x $100k ACV = $2mm in projected revenue . Adding this to $18mm in bookings from 30 tenured AEs makes $20mm in projected revenue before reflecting the impact of accelerated ramp. How much % revenue impact can you expect from accelerating AE ramp from 8 to 6 months? The nimble good enough answer: $1mm in incremental revenue / $20mm in projected revenue = 5% incremental revenue growth .
We know that AEs close 1 deal every 2 months, so accelerating ramp by 2 months enables an AE to close 1 incremental $100k new logo deal during their first year with the company. Because you're backfilling 10 AE roles throughout the year, the impact is 10 AEs x $100k ACV = $1mm in incremental revenue . We expect 30 of 40 AEs won't leave the company this year. If fully ramped, they will generate $18mm in projected revenue (30 AEs x $600k).
Measuring the impact of new GTM investments can be a real challenge. Sales Enablement is a good example of this. When a CRO makes the case for additional investment in sales onboarding and training resources with their CFO, they often struggle to quantify the expected ROI . You'll never be exactly right, nor do you have to be. But there's always a way to use finance frameworks and logic to make a reasonable estimate. As an example, let's say you're running an Enterprise SaaS sales team with 40 AEs . About 25% of your AEs leave during the year, so you'll need to hire 10 backfill AEs . (For simplicity, we assume no new AE positions will be created.) Fully-ramped AEs carry an annual bookings quota of $1.2mm . Due to persistent market headwinds, you expect quota attainment to average 50% this year, which implies a fully-ramped productivity per AE of $600k in bookings. (For simplicity, we assume that bookings = revenue.) The average deal size is $100k , which means a typical AE closes 6 deals per year or 1 deal every 2 months. The time it takes to ramp AEs to 100% productivity has expanded to 8 months in recent years. By improving onboarding and training, you expect AE ramp can be compressed from 8 to 6 months , roughly equal to the average sales cycle length. Compressing ramp by 2 months increases AE productivity by 33% (from 4 to 6 months). While this is a one-off increase for each new AE in their first year of employment (new hires only ramp once), the impact will repeat itself each time you onboard a new AE in the current or future years.
Number of AE positions (FTE)
40
AE turnover per year
25%
Number of AE backfill hires per year
10
Annual ramped AE quota
$1,200,000
Average ramped AE quota attainment
50%
Productivity per ramped AE
$600,000
New logo ACV (average deal size) Deal closings per ramped AE per year
$100,000
6.0 0.5
Average deal closings per ramped AE per month
Current AE ramp time
8 months 6 months
Accelerated AE ramp time
Incremental AE capacity in year 1
+2 months
Incremental AE deal closings
1.0
Incremental productivity per ramped AE
$100,000
Incremental ACV bookings from 10 backfill AEs
$1,000,000
Current aggregate ACV bookings (from all 40 AEs) Incremental revenue growth from faster AE ramp
$20,000,000
5%
18
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