Everyone wants to know if they’re doing a “good job.”
Salespeople are no different. And there are numerous ways to quantify the performance of individual reps using sales metrics.
But comparing your sales team to another isn’t quite as straightforward. If you’re running a sales team at a growing startup, you can’t compare your average sales cycle to your unicorn neighbor in the same way you can compare two reps’ average deal sizes on your team. Very few organizations make this data publicly available.
We really wanted to know what sales teams at high-growth SaaS companies look like. More specifically, we wanted to know what separates the best sales teams from the rest.
So we analyzed a year’s worth of detailed sales data from over 50 growing SaaS companies with inside sales teams. The result? Our comprehensive Inside Sales Benchmarks Report.[contentblock id=140 img=gcb.png]
When approaching this data-backed study, we thought about specific questions – questions that would usually be difficult to answer – that we could find insightful answers to. After much thought, we narrowed it down to four:
- What do high-growth companies do differently?
- Are big deals worth the time and energy?
- How much should performance vary within your team?
- How much time is wasted working bad deals?
(In this post, we’ll focus on the first three questions. To find out if you’re wasting time chasing bad deals, check out the full report.)
What Do the Best Teams Do Differently?
To find out what separates the best from the rest, we compared teams with 100%+ growth in the last year to teams with 0-100% growth. We discovered two primary trends shared by high-growth organizations:
The sales funnel looks more like a martini glass.
Sales teams a high-growth companies generate 40% more leads each month, but they create 60% fewer opportunities and deals. Their sales funnel looks more like a martini glass, with a wide opening at the top and a narrow bottom. This goes to show that the best sales teams qualify leads more effectively, allowing their reps to focus only on the best opportunities.
They win much larger deals.
How much larger? 2.8x, to be exact. So even though the best sales teams close fewer deals than most sales teams, they close deals that are significantly larger.
Are Big Deals Worth It?
Given the two previous sales benchmarks, it seems like focusing on big deals is they way to go. But we wanted to prove it, so we crunched the numbers. Here’s what we found:
The sales cycle for large deals is 1.4x longer than average deals.
This is expected. Bigger deals take longer to close because there are more logistics to be considered and more players involved. They take time – that much we know.
Large deals require approximately 1.3x more work.
This also isn’t totally surprising, especially considering the previous benchmark. Bigger deals require more time and energy…but are they worth it?
Win rate is 20% lower for big deals.
Big deals are won less often than average deals, which makes sense. With more money on the table, prospects are more likely to be skeptical of their investment and back out if they’re uncertain.
The verdict is in…big deals are worth it! They tend to be 2.6x larger than average.
Because big deals generate so much revenue, they are worth the time, energy, risk, and effort. This becomes clearer when looking at dollars per unit of effort – the ratio of money:effort is higher for big deals than average and small deals.[contentblock id=140 img=gcb.png]
How Much Should Your Team’s Performance Vary?
On every sales team, there are some reps who are better salespeople than others. But how much variance is normal? How much better should your top reps be than the average rep? In our effort to answer this question, we found these two trends:
Top-performers close more deals.
While this isn’t the most surprising news, it’s useful to quantify how many more deals the best reps close than the average rep. So just how many more deals do the best reps close? 1.8x more deals than the average rep – almost twice as many.
Win rate and sales cycle don’t differentiate top reps.
This is an insightful finding – the best sales reps don’t use a different process or have unusually effective closing skills, they work more opportunities and close bigger deals.
Now it’s time to compare your own sales team to these sales benchmarks…
- Does your sales funnel look like a martini glass?
- Should you be investing more big deals?
- Are your top-performing reps closing more deals?
To see our methodology, investigate more sales benchmarks, or find out if you’re spending too much time on bad deals, read our FREE Inside Sales Benchmarks Report.[contentblock id=58 img=gcb.png] [contentblock id=18 img=html.png]