What is the average ramp up time for a new AE?
The average new sales hire is fully productive 5.3 months after their start date, according to Zippia. This is an average, and like all averages it will vary by company, product, and other factors. For simple products with a quick sales cycle, the ramp time can be as short as a few weeks. For complicated products and industries, however, AEs can take over a year to completely ramp up. With an average ramp time of almost two quarters, however, it's clear that most companies are spending significant time and energy helping new AEs ramp. In order to improve efficiency sales teams should be thinking about how they can reduce ramp time, and how they can improve retention on sales teams, with the goal of spending less resourcing on onboarding new AEs.
How can companies reduce ramp time?
The good news is that sales teams, sales managers, and AEs can all do things to help reduce ramp time. Decreasing ramp time involves a few activities: adjusting to a new sales environment, learning the product, and understanding the customer.
Adjusting to a new sales environment
First, AEs all have to adjust to a new sales environment. This includes a different sales methodology, team culture, and potentially different sales strategies and tactics in order to be effective selling in a new environment. Experienced AEs may have a leg up here, but newer AEs will inevitably need more time to adjust. AEs can make an impact here by spending extra time learning and honing their craft. Practicing, developing emotional intelligence, reading, listening to podcasts, and continuing education can all help make them more effective and adaptable as salespeople.
Sales managers also have a role to play here; AEs are often thrown into new environments and asked to start selling, but thorough and up-to-date training programs can help speed up this onboarding process. Showing AEs tactics that work, and helping them learn these skills and incorporate them into their own styles, may help speed up the ramping process. Assigning a sales buddy to help mentor new AEs can also be an effective way to help them learn the ropes and start closing deals faster.
Learning a new product faster
For companies with complex products and large product portfolios, this can be the hardest part of ramping new AEs. Developing product training for new AEs is helpful, but is often not enough to make sales reps completely comfortable with the ins and outs of this complexity, especially for products where technical knowledge is required throughout the sales process. In this context, it's essential to spread out training over a longer period of time in order for it to resonate well. With the average 5.3 month ramp time, training could easily occur over 1-2 quarters, with plenty of opportunities for repetition and building on previous knowledge. Sales reps need time spent actually selling the product themselves in order for complex training to really click. Creating a schedule which provides opportunities for this can be effective.
Shadowing other AEs is also helpful during this environment because it's impossible for new reps to anticipate the level of nuance and the types of edge cases that come with selling a complex product. Shadowing others, particularly those working on complex deals, can help them anticipate the types of questions they are likely to receive in the future and develop thoughtful answers to them. In addition to shadowing, role playing exercises and lunch and learn sessions sharing insights when tough deals are won or lost helps transfer knowledge across the sales team.
Understanding the customer
As new sales reps work to learn the product, it's also important for them to spend time understanding the customer segments they will be selling into. Empathy is key in sales, and having a nuanced understanding of a prospect's particular needs and pain points can help build the initial connection with the prospect, tailor their sales pitch, ensure a high degree of relevancy, and potentially develop a custom solution for the end user. To help sales teams better understand their customer, training and shadowing other sales calls is a strong first step. Next, companies should share market research, customer segmentation, personas, and other pertinent information with sales teams, along with information on what tactics work well with different types of segments and personas. This is an area where marketing teams may be able to help with onboarding and present research that helps new AEs onboard.
Is there room for improvement in retention rates among sales teams?
Any conversation on reducing ramp time for new AEs should also consider whether there are opportunities to improve retention on the sales team, and thus reduce the need for new hiring and onboarding. Even for high growth companies rapidly expanding their sales teams, there may be opportunities to make sure that these new hires stick around. Running an employee satisfaction survey and conducting exit interviews to determine causes of attrition are a helpful first step.
According to a research study conducted by Palette, The State of Sales Compensation 2023, 41% of companies have retention problems on their sales teams specifically because of uncompetitive sales comp plans. This is a huge opportunity to reduce retention rates, and in turn increase the productivity of the entire sales org. At Palette, we believe in overcompensating high performers, and under-compensating low performers. This approach helps keep your best salespeople on your side. Read more about why you should overcompensate your sales team.
Improving sales retention can be an important lever to improve productivity, and can help ensure that the total time the company spends ramping new AEs is low. Work addressing the root cause of the problem can help build a stronger and more experienced sales team.