Five Vital Sales
Performance Metrics
As featured in Harvard Business Review
Spotlight on:
“The Truth About the Field Sales to Inside Sales Migration Trend” Full Report
Researched by Steve W. Martin
Copyright Steve W. Martin 2014. All rights reserved.
Sponsored by:
Executive Summary
Sales leaders often wonder how they compare to their peers and competitors. Thanks to an in-depth sales study recently conducted by
sales author and USC professor Steve W. Martin, it is now possible to benchmark some of the most important sales metrics today. In the study,
Martin surveyed and interviewed top senior-level sales leaders from over one-hundred leading high technology and business services companies.
This whitepaper focuses on five vital metrics (and a couple of other key findings), drawn from the larger study, which can help businesses
with planning and assessment of their own efforts.
The study revealed that the vast majority of companies participating were growing despite what could be perceived as a relatively low
percentage of their salespeople meeting quota. The results of the study also served to highlight and quantify a few of the many important
differences that exist between inside and outside salespeople in terms of quota targets, on-target earnings, and average deal size. What’s more,
when results are looked at collectively, one can see how they help explain the migration taking place from field sales models to inside sales
models, which the full study aimed to better understand.
A Study of Growth Organizations
Exactly three-quarters of the companies participating in the study indicated their revenues have grown over the past two years. Surprisingly,
about half of those with growing revenues reported that their revenues have increased at a significant rate, at an average rate of more than
20 percent over the last two years. For readers in growing organizations or companies with intent to grow, the results of this study may
have more significant relevance.
2% Declined significantly (more than 20%)
Declined slightly
11%
Increased significantly (more than 20%)
About the same
37%
12%
38%
Increased slightly
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1. Percentage Achieving Quota
Although most companies in the study reported having grown over the last two years, companies also reported that, on average, only
60 percent of their salespeople achieved 100 percent of quota last year. However, the number of salespeople who achieved 100 percent
of quota varied greatly by sales organization: 26 percent of sales leaders reported that 70 percent or more of their salespeople made quota,
54 percent reported that between 50 to 69 percent of their salespeople made quota, and 20 percent reported that less than half of their
salespeople made quota.
Sales leaders reporting what percentage of their salespeople
achieved 100% of annual quota last year
Over 70% of salespeople
made quota
26%
Between 50% to 69%
made quota
54%
Under 50% of salespeople
made quota
20%
0%
10%
20%
30%
40%
50%
60%
2. Quota Attainment Average
The average percentage of salespeople that achieved 100 percent of quota last year also varied by type of industry. These results
underline the importance of accurate projections and forecasting. Sales leaders should set sales targets and quotas with full awareness
that many of their salespeople are likely to fall short of their sales goals and should therefore set quotas that exceed their overall sales
targets by an appropriate amount, while still setting achievable targets.
Computer Software
52%
Cloud-based and SaaS
61%
Computer Hardware
60%
Telecommunications
66%
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3. Average Annual Quota
The overall average annual quota for an outside field salesperson was $2.7 million and $985,000 for an inside salesperson.
Industry averages are shown below.
Outside salesperson annual quota
Inside salesperson annual quota
Computer Software
$3.2m
$1,220,000
Cloud-based and SaaS
$1.6m
$795,000
Computer Hardware
$4.2m
$1,350,000
Telecommunications
$3.3m
$730,000
4. Average On-Target Earnings
The average annual on target earnings including salary, commission, and bonuses for field and inside salespeople at 100 percent
of quota ranged from $80,000 to $240,000.
Outside salesperson on-target earnings
Inside salesperson on-target earnings
Computer Software $240,000
$120,000
Cloud-based and SaaS
$210,000
$100,000
Computer Hardware $180,000
$80,000
Telecommunications $150,000
$85,000
5. Average New Deal Size
The average new deal size reported for field sales professionals was $166,000 and new deal size for inside sales professionals was $19,000.
$19,000
Inside Sales
Field Sales
$166,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
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Summary and Conclusions
The vast majority of companies who participated in this study reported revenue growth over the last two years even though most of
them also reported that fewer than 70% of their salespeople made quota during this same time period. Quota attainment varied slightly
per industry as did average quotas and on-target earnings, which vary more significantly between outside and inside salespeople.
The migration trend from field sales to inside sales that the full study explored can be better understood in light of the implications of
the last three metrics (and final key finding), which provide further insight into the way sales organizations are utilizing field and inside
sales teams differently. At first glance, the results might suggest that an outside sales model might make more economic sense because,
on average, the annual quotas of outside salespeople are about three times greater than those of inside salespeople while on-target
earnings are only two times higher. However, the advantages to inside sales teams become more noticeable when the third metric,
average deal size, is added to the equation.
By dividing the average annual quota for outside and inside salespeople by the corresponding average new deal size, one can see the
difference in deal volume needed by each group to achieve quota. Outside salespeople only need to close about 16 deals a year in order
to meet quota because of the large size of each deal, while inside salespeople need to close about 52 deals a year in order to meet their
quotas. This telling figure illustrates some of the advantages to inside sales cited by many sales leaders elsewhere in the study- A few
examples include: the ability to scale faster, increased call activity and sales volume, and a better strategy for penetrating small business
and mid-market accounts.
Advantages of Inside Sales Teams
Easier to onboard new salespeople
and share best practices
83%
Allows sales organization to scale faster
79%
Enables sales organization to increase
call activity and selling volume
78%
Provides a better strategy to penetrate
SMB and mid-market accounts
76%
Easier to train, develop,
and promote for field roles
61%
Easier to track the pipeline
and forecast results
34%
0%
20%
40%
60%
80%
100%
To further substantiate the last couple of points, consider the volume of leads needed to generate the number of closed deals required
in order to meet quotas. Even with a 10 percent lead-to-close conversion rate, outside and inside salespeople would need to start with
160 and 520 new leads per year, respectively, to meet their sales goals. With those numbers, one can clearly see that it would be very
difficult, if not impossible, for an outside salesperson to successfully manage the inside volume of sales leads and opportunities, while
inside salespeople generally have no problem managing well over 500 leads per year. Conversely, the smaller number of leads per rep
required for field sales wouldn’t get an inside rep to quota, due to low volume. The five sales performance metrics presented here provide
great benchmarks for sales leaders, but when looked at more closely, these metrics can also provide incredible insights into sales strategies.
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Study Methodology
Top senior-level sales leaders from over one-hundred leading high technology and business services companies participated in this
study. These senior executive sales leaders manage the sales organizations of computer software, computer hardware, Cloud-based/SaaS,
telecommunications, and business services companies.
The research included in-depth interviews and extensive surveying of the participants. The average interview lasted 42 minutes and
the survey required 82 separate responses. The goal was to gather qualitative information, including trends and future predictions along
with quantifiable sales organization metrics. Participants were also asked to share their top sales challenges and future sales strategies.
They candidly shared their experiences, opinions, and advice. In exchange for their candor, it was agreed that their names and organizations
would remain anonymous. This particular paper only highlights a few of the key metrics and findings of the full report entitled, “The
Truth About the Field Sales to Inside Sales Migration Trend: Sales Organization Structure Study Based upon Interviews and Surveys
with Vice Presidents of Sales at Top Technology Companies.”
In addition, the interpretation of study results was augmented by Steve W. Martin’s personal experience working with and studying hundreds
of technology sales organizations. The services he has provided these companies include sales force effectiveness consulting, comprehensive
win-loss analysis studies based upon extensive customer interviewing, and advanced sales strategy training.
Steve W. Martin is an expert on the complex human nature of business-to-business sales. Steve is a regular contributor to the Harvard
Business Review and teaches at the University of Southern California Marshall Business School MBA Program. This research project was
sponsored by Velocify, a market-leading provider of cloud-based intelligent sales software, designed for high-velocity sales environments.
Sales teams require more than
just a standard CRM to reach their full
potential. Intelligent sales automation
solutions and intelligent dialers can
greatly improve the effectiveness and
speed for launching and growing
sales teams across any organization.
Does your sales team have
the tools needed to
attain higher quotas
and larger sales volumes?
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About Steve W. Martin
Steve W. Martin is an expert on the complex human nature of business-to-business sales. His “Heavy Hitter” series of books for
senior salespeople has helped over 100,000 salespeople become top revenue producers. Steve is a regular contributor to the Harvard
Business Review and teaches at the University of Southern California Marshall Business School MBA Program. You can learn more
about Steve at www.stevewmartin.com.
About Velocify
Velocify is a market leading provider of cloud-based intelligent sales automation solutions that drive more effective and efficient sales
processes and increased revenue. With unmatched expertise, drawn from a dedication to helping more than 1,500 clients automate and
improve their lead response and selling processes, Velocify has become the platform of choice for organizations focused on improving
customer acquisition practices and business performance. Velocify is a privately held company, recently recognized as one of the fastest
growing companies in North America on Deloitte’s 2012 Technology Fast 500. Please visit www.velocify.com for more information.
Call: (888) 843-1777
Email: sales@velocify
Visit our website: www.velocify.com
Visit our blog: velocify.com/blog
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