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Business-to-business SaaS Sales

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Business-to-business or B2B sales is the process of one business selling product/services to another business [1]. SaaS stands for Software as a service, and refers to web based software as opposed to software that requires installation, maintenance, and potentially hardware to accompany the application [2]. Besides the product/service revolving around software, B2B SaaS sales differs from general B2B sales as SaaS solutions are sold as annual or monthly subscriptions instead of a one-time purchase [3].

Well known B2B SaaS companies include Salesforce, Shopify, ServiceNow, Zoom, Atlassian, Workday, Hubspot, and Square [4].

Modern B2B SaaS Sales

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Process:

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The sales process for B2B SaaS companies ultimately varies, but many use a process similar to the following:

  1. Prospecting - Reaching out to prospects who fit the ideal candidate profile [5].
  2. Qualification - Determining if the prospect has a need for product/services [5].
  3. Demo/Presentation - Present the solution that matches prospect's needs [5].
  4. Objection Handling - Confront and respond to prospect objections to purchasing solution [5].
  5. Negotiation - Potential negotiation from prospect, usually around pricing [5].
  6. Deal Won - Prospect accepts and signs contract for the solution [5].

Common Technology Used by B2B Sales Functions:

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Top Sales Intelligence Tools: ZoomInfo, G2, DiscoverOrg, and LinkedIn Sales Navigator [6].

Top Sales Enablement Tools: Lessonly, Gong, Salesforce, and Chorus.ai [6].

Top Sales Engagement Tools: Outreach, Zoom, Intercom, and Gmail [6].

Top Pipeline/Analytics/Measurement Tools: Salesforce, Clari, and Tableau [6].

Top Management/Coaching Tools: Gong, Chorus.ai, and Ambition [6].

Titles & Roles

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Sales Development Representative (SDR)

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A sales development representative (SDR), is responsible for sales development and "outbound prospecting" for an organization [7]. An SDR researches and engages potential buyers, builds/gauges interest in the products/services they sell, and starts official communication between their company and the buyer [7]. SDRs generally do not close business themselves, but rather focus on setting up the first conversation for another seller on their team [7]. Many times, this other seller is an Account Executive, whose focus is on closing deals [7]. In order to reach and start conversations with potential buyers, SDRs use a combination of phone, email, and social media [7].

Most SDRs report into an organization's sales function, however, sometimes they report into marketing functions [8]. In 2020, this was 68% and 24% of reps, respectively [8].

Since 2010, the experience required to become an SDR has decreased consistently. In 2010, the average experience required for an SDR was 2.5 years, and in 2020, it was just 1.2 years [8].

Some organizations call the role equivalent to a sales development representative a business development representative (BDR), market development representative (MDR), account development representative (ADR), and other titles [9].

Ramp Time, Tenure, & Productivity:

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Ramp time refers to "the amount of time it takes a new salesperson to become fully productive from when they are first hired" [10]. In 2020, the average ramp time for an SDR was 3.1 months [8]. Tenure refers to the average time before an SDR is promoted, with the average in 2020 being 21.6 months [8]. Productivity refers to time an SDR is fully productive during their time in the role (determined by subtracting ramp time from tenure), which in 2020, was around 17 months [8].

Career Path & Attrition:

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Although most companies offer more than one career path for SDRs, the most common offered is to an AE position [8]. In 2020, most reps were SDRs for 13-18 months before being promoted to an AE [8]. Generally, SDRs that work for organizations with higher deal sizes can expect to stay in the role longer, with the opposite being true for organizations that have lower deal sizes [8]. Other common promotional paths include "step-promotions", in which an SDR will move into another version of the role, such as an Associate or Senior SDR [8].

During 2020, total attrition was 26% [8]. This includes both SDRs leaving voluntarily (i.e resignations) and involuntarily (i.e due to termination), but excludes any attrition that occurred due to the COVID-19 pandemic [8]. Since 2018, voluntary attrition has decreased by almost 50% [8].

Metrics, Quota, & Quota Attainment:

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One key metric used to evaluate SDR performance looks at the number of "activities" conducted per day. In 2020, the median activities conducted per day by SDRs was 104 [8]. Broken up, 40 of these activities were calls, 40 were emails, 16 were LinkedIn messages, and 8 were through other forms of communication [8]. Another metric that is sometimes used looks at the number of "quality conversations" an SDR has in a day. Quality conversations refers to whether qualifying or disqualifying information was received from a potential customer when the SDR reached out to them (whether by phone, email, or some other communication channel) [8].

In 2020, the average quota for SDRs was 12 introductory meetings set, or 15 qualified opportunities [11]. In the same year, the average percentage of SDR who either reached or over-exceeded their quota was 68% [11].

Compensation:

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In 2020, the average compensation for an SDR in the United States was $50,198 in base salary and $19,223 in commission [9]. Therefore, total On-target Earnings (OTE) was $69,421 [9].

Technology Used:

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In 2020, the median amount of technology used by SDRs included a customer relationship management (CRM) platform and 4-5 other tools [8]. Outside of CRMs, other technology leveraged by SDRs included technology for email templates and tracking, contact data and account intelligent, phone dialers, call recording tools that analyze conversations, live chat/chatbots, video creation and tracking tools, and paid LinkedIn tools such as Sales Navigator [8].

Account Executive (AE)

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An Account Executive, or AE, (while there are similarities, this role is not to be confused with an advertising Account Executive) is a salesperson who is responsible for "closing sales deals to create new customers" [12]. After an SDR sets up an initial meeting with a prospect, an AE will take that meeting to take the prospect through the sales process of qualification (or sometimes called discovery), providing a demo of the solution, objection handling, and negotiating to close the deal [12].

In 2020, the average experience required to become an AE was 3 years [13]. As the deal sizes get larger, so do the years of experience required at a company [13].

Relationship with SDRs:

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SDRs produce leads that are passed on to AEs [7]. Most of the time, SDRs are assigned to a territory that an AE or multiple AEs are responsible for [8]. Sometimes, a round-robin system is used to pass leads to AEs, however, this is more common in smaller organizations [8]. In terms of ratios, there is usually 1 SDR that passes leads to 2 AEs [8]. However as companies get larger, a single SDR tends to support more AEs [8]. For example, companies with over $500 million in revenue can have up to 4 AEs per SDR [8].

Ramp Time, Tenure, & Productivity:

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In 2020, the average ramp time for an AE was around 4.3 months, which is a decrease compared to previous years [13]. Given that the average tenure for AEs was 30 months in 2020, this puts the productivity for the average AE at around 26 months [13].

Career Path & Attrition:

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Unlike the SDR role which today is more of a stepping stone position, it is not uncommon for AEs to stay in the role for their careers [14]. There are also different types of AEs, such as Enterprise AEs which work with larger and more important accounts [15]. If an AE does want to move out of the role, the next step is generally into sales leadership [14]. Leadership roles, from least to most senior, include Sales Managers, Sales Directors, and Sales Vice Presidents/Chief Revenue Officers [14].

In 2020, the median annual attrition for AEs was about 28% [13].

Metrics, Quota, & Quota Attainment:

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The median activities per day for AEs was about 70 in 2020, with about 5 demos per week [13]. However, this varies depending on the deal sizes of the companies they worked for, with AE conducting more demos per week when deal sizes are lower, and less demos with higher deal sizes [13].

The AE role is a quota-carrying role, meaning AEs are responsible for generating a certain amount of revenue. In 2020, the median annual quota was $775,000 per AE [13]. Quota also depended on deal size, with quotas having a positive correlation with deal size [13]. For example, AEs that sold solutions for around $5,000 per deal had annual quotas around $350,000 [13]. For deal sizes that average at $100,000, annual quotas in 2020 could reach up to $1,200,000 [13].

In 2020, 65% of AEs on average attained and reached quota [13].

Compensation:

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In 2020, median on-target earning for AEs was at around $158,000 [13]. Broken down, this was $79,000 in base salary and $79,000 in variable commissions [13].

Vice President of Sales (VP Sales)/Chief Revenue Officer (CRO)

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A Vice President of Sales or Chief Revenue Officer (many times, these two positions are not mutually exclusive) is a key position that requires responsibility over sales targets, and leading the sales team(s) to meet and exceed them [16]. More specifically, VPs of Sales and CROs are responsible for the following (from most to least important): Recruiting, Advising Reps, Developing Sales Processes and Tactics, Defining Sales Strategy, and Closing Key Deals [16]. VPs of Sales and CROs are usually responsible for AEs, Field Sales, SDRs, and Account Managers who upsell or cross sell [17]. Less commonly, these sales leaders are responsible for functions such as Revenue Operations, Channel Sales, Customer Success and Renewals, Sales Engineering, and Marketing [17].

Tenure & Experience:

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The average tenure for a Sales VP or CRO sits at about 1.8 years, with around 7.8 years of experience for individuals in this role [17].

Quota & Compensation:

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The median quota for CROs and Sales VPs in 2020 was $12,000,000 [17]. Attainment of quota was most commonly measured by net new revenue [17]. The median on-target earning for CROs and Sales VPs was $380,000 in 2020, with $209,000 in base salary and $171,000 in commissions [17].





  1. ^ "What is B2B (Business to Business) Sales and How is it Changing?". ringDNA. Retrieved 2021-07-28.
  2. ^ "What is Software as a Service (SaaS): A Beginner's Guide". Salesforce.com. Retrieved 2021-08-03.
  3. ^ "SaaS Sales 101: Your Guide to The Perfect SaaS Sales Strategy". Sales Hacker. 2020-06-29. Retrieved 2021-08-03.
  4. ^ "Public SaaS Companies Are Now Worth $1 Trillion". SaaStr. 2020-07-28. Retrieved 2021-08-04.
  5. ^ a b c d e f "7 Steps to Building a Winning Sales Process for your Inside Sales Team". Freshworks CRM Blog. 2018-09-10. Retrieved 2021-08-04.
  6. ^ a b c d e Joan (2021-06-27). "Built the Perfect Sales Tech Stack (Here's What's Working Today)". Sales Hacker. Retrieved 2021-08-03.
  7. ^ a b c d e f "A Day in the Life of a Sales Development Rep". Sales Hacker. 2021-01-12. Retrieved 2021-08-02.
  8. ^ a b c d e f g h i j k l m n o p q r s t u v w The Bridge Group (2020). "Sales Development (SDR) Metrics & Comp Report" (PDF). https://www.bridgegroupinc.com/. {{cite web}}: External link in |website= (help)CS1 maint: url-status (link)
  9. ^ a b c CloserIQ. "SDR Compensation Report 2020". CloserIQ.{{cite web}}: CS1 maint: url-status (link)
  10. ^ "Sales Ramp Up Time: Everything You Need to Know". Xactly. Retrieved 2021-08-02.
  11. ^ a b Abdullah, Sammy (2020-09-04). "Great SDR data from SaaS companies". Blossom Street Ventures. Retrieved 2021-08-03.
  12. ^ a b "What Exactly Does An Account Executive Do? (Complete Walkthrough)". Sales Hacker. 2019-05-21. Retrieved 2021-08-05.
  13. ^ a b c d e f g h i j k l m n Group, The Bridge. "SaaS AE Metrics & Compensation Research". blog.bridgegroupinc.com. Retrieved 2021-08-05.
  14. ^ a b c "Which Account Executive Career Path Will You Take?".{{cite web}}: CS1 maint: url-status (link)
  15. ^ "What Is an Enterprise Account Executive?". Work - Chron.com. Retrieved 2021-08-05.
  16. ^ a b Frost, Aja. "How to Hire Your First VP of Sales [Job Description]". blog.hubspot.com. Retrieved 2021-08-06.
  17. ^ a b c d e f Group, The Bridge. "CRO Compensation Report". blog.bridgegroupinc.com. Retrieved 2021-08-08.
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