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The ROI of Ramping New Sales Hires Faster

Investing in ramping new sales hires faster is some of the strongest ROI you can generate as a sales leader.

But somehow it often takes a back seat.

Especially if sales enablement isn’t a dedicated function at your company.

We know that ramping sales hires is probably important, but there are only so many hours in the day and sales managers need to spend them focusing on their biggest priority:

Generating more revenue.

The painful irony?

Ramping new sales hires fast is THE EASIEST way to generate more revenue if you’re growing headcount.

The faster a new sales hire starts producing at full quota, the more revenue they’ll bring in over the course of the year.

Here’s an example of three different account executives carrying the same quota ($600k/year fully ramped).

The only difference is their ramp time to full quota: 5 months, 6 months, and 7 months.

Take a look at how much annual revenue each one generates at the end of their first year:

ROI of Ramping New Sales Hires Faster Scenarios

The difference is pretty staggering, right?

That’s a $80K+ difference between the rep that ramps at seven months and the rep that ramps in five.

7 Month Ramp Time

Let’s break down the difference between the five and seven month ramps.

In our seven month ramp example we have:

ROI of Ramping New Sales Hires

Month by month, the scenario for a 7-month ramp looks like this:

  • Month 1: 0% ($0)

 

  • Month 2: 0% ($0)

 

  • Month 3: 12.5% ($6,250)

 

  • Month 4: 25% ($12,500)

 

  • Month 5: 50% ($25,000)

 

  • Month 6: 75% ($37,500)

 

  • Months 7-12: 100% ($50k/month for 6 mos.; $300k total)

 

Total 12 month revenue the new hire produces: $381,250.

5 Month Ramp Time

In our five month ramp example, everything stays the same except the speed of ramp:

ROI of ramping three new sales hires

Month by month, the scenario for a 5-month ramp looks like this:

  • Month 1: 0% ($0)

 

  • Month 2: 0% ($0)

 

  • Month 3: 50% ($25,000)

 

  • Month 4: 75% ($37,500)

 

  • Months 5-12: 100% ($50,000/month for 8 mos,; $400,000 total)

 

Total 12 month revenue a new hire produces in a 5 month ramp period: $462,500.

That’s $81,250 in additional revenue captured per new hire.

The Compounding Effect of Ramping New Hires Faster

IFf you can codify your onboarding process and see this ramp speed across all of your new sales hires, the effect compounds.

If you have 10 new hires to ramp and you achieve the same ramp time improvement, you just captured an additional $812,500 in revenue that would have otherwise been left on the table.

Numbers like that are hard to ignore.

With a little more focus on your new hires and how you get them up to speed, you can make a substantial improvement to your annual numbers.

New hires want to learn everything they possibly can to be successful in their role.

From how to do discovery calls and demos, to how to handle competitive situations and objections.

Are you giving these new hires the resources they need to ramp successfully, or are you leaving serious money on the table?

Stay tuned next week when we show you five strategies to make onboarding efficiencies like these a reality.

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Chris Orlob

Chris Orlob is Senior Director of Product Marketing at Gong.io

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