Fast growth companies often lack basic data and benchmarks about how to organize and manage an effective sales force, a critical part of sustaining high growth.  We are often asked, for example, how many customers each sales rep should have.  To answer that question, we analyzed data from over 100 companies that participated in our proprietary SaaSRadar benchmarking survey.

We found that—as with many aspects of fast growth sales—one size does not fit all.  Among the companies in our sample, the number of customers per rep varies with average contract value—the blue line on the chart below.  Simply put, the larger the ACV, the fewer customers per sales rep.  This makes intuitive sense: larger customers have a longer sales cycle, require more ongoing care and feeding, and therefore more take significantly more time from individual account execs.  By contrast, when companies instead pursue a sales strategy aimed at smaller customers, they need to leverage their sales reps to generate more deals.  At the same time, we also found that our survey companies set roughly the same quota value for their reps regardless of how many customers they served—the orange line on the chart.

What does this mean for the SaaS sales organization?  While it is of course important to hire, train, and retain the best salespeople for your business, this analysis suggests that what you do with those reps depends mostly on your sales motion.  It is by now well known that there are many different ways to build a $100 million SaaS business.  How many reps you have and how they are organized should depend less on their productivity and more on the choice whether to build your business out of a small number of high-value customers or a large number of small customers.

Figure 1 – Customers and quota per rep versus average customer value

Article By - Michael Burstein and Ryan Janssen Posted Jun 27