How to Calculate How Many Deals a Sales Rep Has to Close Per Month. And Their Quota.

how-to-calculate-how-many-deals-a-sales-rep-has-to-close-per-month-and-their-quota.

Q: What’s a healthy number of deals an Account Executive for a B2B SaaS company be working? How many is too many? Deal size is $4k/yr and sales cycle ~25 days.

You can back into it.

  • First, what’s the On Target Earnings (OTE = base + bonus) for the rep? Let’s assume $120k here in base+bonus.  But you can just adjust the math here up or down.
  • Second, how much of the total deal size will the rep “take home” in your comp plan / model? Reps generally have to close 5x their OTE with bigger deals (i.e., their total comp is 20% of what they close).  This often shrinks to 4x in smaller ACVs like this one at $4k.
  • Third, multiple the OTE times that 4x-5x multiple to get the quota. Here, a $120k OTE times 4x = a $480k quota.

Now, you can divide the quota by the deal size. At a $480k quota with a $4k ACV … they have to close 120 deals a year, or 10 a month.

And that’s just fine. In a high-velocity, low ACV SaaS sales environment, reps should be able to close 10-12+ deals a month (from say 50–100 leads). The best ones, will close more.

And it also means you have to be feeding them enough leads.  A 20% close rate is pretty high, so they’d need 50 qualified leads.  100 if they are real leads, but less qualifed.

It all ties.

A deeper dive here:

A Framework For Your First SaaS Sales Comp Plan

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