3 Ways To Calculate Your Sales Ramp

 
Team ThunderAct

Finding the right talent for your sales team is vital in achieving business growth and success. However, it is also necessary to ensure that your ramp-up time is well-put. This way, you can help new hires to bring value to the company quickly.

 

What It Is


Generally, the sales ramp-up time refers to the period a new sales hire takes to start providing value to the team. Once this period ends, your new employee should be able to reach full productivity. At the same time, they should have adjusted to the company culture. 

 

The sales ramp includes the following:

 

  • Onboarding
  • Client handover
  • Product training
  • Tech instruction

 

Calculating Sales Ramp-Up Time


The importance of sales ramp-up time goes beyond the preparation of new employees. By understanding sales ramp, you can have a better idea of how to forecast sales and plan training. You can also consider it when making hiring decisions.

 

There are different ways to calculate sales ramp-up. It may vary depending on certain factors, including company size, business growth rate, the industry you are in, and training program. 

 

That said, there are methods most commonly used when calculating average sales ramp time. Here are three of them:

 

Sales Cycle Method


This method is perhaps the easiest to do. Determine the average length of the company’s sales cycle. Then, add 90 days. The answer will be the sales ramp-up time.

 

Quota Attainment Method


Another method commonly used by sales teams is the quota attainment method. As the name suggests, it involves the time it takes for a sales representative to reach their quota. Using this calculation is best for those that do not sell products directly. Teams that do not have average sales cycles will also find this useful.

 

Training and Experience Level Method


This method is also easy to understand but includes more factors. Aside from the length of the sales cycle, the training period and level of experience are also measured. The formula includes the addition of the average training period, allotted time for sales background, and the sales cycle. You decide the amount of time you allot for previous experience. 

 

Time to Value


Along with the sales ramp-up time, companies should also consider time to value (TTV). This metric refers to how long it takes for a new client to realize that a product has value. It includes customer data analysis.

 

Sales teams would want to decrease TTV. That is because having shorter TTV leads to getting a return on investment faster. On the other hand, a high TTV can decrease the likelihood of developing brand loyalty among new clients.

 

To measure TTV, the sales team has to define what they consider as value. 

It can be:

 

  • upgrading from free to paid subscription
  • customer onboarding
  • adoption of new features
  • achievement of the desired ROI

 

Calculate the time between the start of use and when the value is reached.



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