Industry benchmarks for payback per rep

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Standard Benchmarks for Account Executive Hire Payback Period

The least standard for payback periods of new Account Executives' in SAAS companies is 15 months. However, AEs in average performing SAAS companies usually have payback periods that either take 12 months or less. The new Account Executives of high performing SaaS companies usually have payback periods of 5-7 months.

OVERVIEW
  • It can take as much as 3 – 6 months for AEs to fully ramp up and an additional 10 months to pass the payback point in order to positively contribute to the company.
  • The industry standard for AE & SDR payback period in SAAS companies is 15 months.
  • An easy way for companies to significantly change their payback periods is by getting customers to pay annually and upfront.
  • When SAAS spread their payback period over a year, it constrains their growth spending.

HIGH PERFORMING SAAS COMPANIES:
  • The AE payback periods for high performing SaaS companies is around 5-7 months.
  • Very high performers like PhoneWagon have payback periods as low as 3.1 months.
  • Other high performing SAAS companies like Buffer have payback periods of approximately 3.2 months.

AVERAGE PERFORMING SAAS COMPANIES
  • An average benchmark for payback periods of AEs in SAAS is 12 months or less.
  • Generally, it is considered appropriate for a SaaS company to have a payback period within 1 year. However several factors influence payback periods and make them fluctuate and evolve.
  • New AEs and sales representatives take an average of 5.3 months to become fully productive.

POOR PERFORMING SAAS COMPANIES
  • The payback period for AEs in low performing SaaS companies is about 15 months.
  • Larger companies also usually have longer payback periods due to their access to more capital.
  • Although it is considered standard practice, 12 months is quite a long time to regain acquisition costs.

Research Strategy:

We started our research by going through publications, articles, journals and press statements that had information regarding payback periods for new Account Executives.
We broadened our approach to include the entire sales team of SAAS companies and their performance metrics, including the procedure used in measuring return on investment (ROI). The primary focus was put on interviews, job descriptions, expert opinions, and corporate publications. Following that, we narrowed our research to specifically find out the requirements for standard, low performing, average performing, and high performing SAAS companies in terms of Account Executive payback periods.
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