Whether you’re interested in the average quota for software sales because you’re examining the field or because you’re checking to see if your current quota is fair, this article will help you out. Before giving you all you need to know about SaaS sales quotas, let’s answer the most pertinent question: what is the average quota for tech sales reps, namely, for AEs and SDRs?
The average yearly quota for software as a service account executives is $770K in annual contract value (ACV), according to Bridge Group’s study. This revenue quota is on average equal to 5.3x account executive’s yearly on-target earnings (OTE). B2B software sales development representatives, on the other hand, have an annual average quota of 21 booked introductory meetings a month, according to Blossom Street’s research.
While these averages can be informative, it’s important to know that software sales reps will usually encounter other quotas through the course of their tech sales careers, such as activity quotas like calls made or product demos held. To learn more about the sales quotas you might be expected to hit in your position, read on.
Types of Software Sales Quotas
Typically, the most important quotas to hit will be a certain ACV for an account executive and a certain number of opened opportunities (or booked meetings) for a business or sales development representative. However, there are other quotas software sales managers create in an effort to motivate sales reps and keep them on track to hitting the big quotas we just mentioned.
Common types of tech sales quotas include the following:
- Activity Quota: This encompasses quotas like the number of demos held per week, number of emails sent, or number of cold calls made. They’re meant to keep reps focused on taking certain actions each day.
- Revenue Quota: These are revenue numbers a sales rep has to close over a certain time frame. For example, an Enterprise AE might have to close $1 million in ACV in a year.
- Volume Quota: This is when the quota focuses on the number of products you sell. It doesn’t take into account the contract value of the deal. A tech company might do this if their pricing is static between different customers, or if they want to get a new product into a lot of people’s hands for market testing.
The commission and quota plan you encounter obviously depends on your company’s product and sales plan. Typically they’re either monthly or quarterly. Regardless, once a sales rep hits their quota they’ll be on track for earning their annual OTE. And, typically, once a SaaS rep is past the quota they’ll typically be in the kickers, meaning each additional dollar of revenue they close will generate more commission for them than the previously closed dollar.
For example, let’s say your quota as a SaaS SDR was 40 meetings a quarter. Each meeting up to that point gives you $80 in commission. However, once you’re in the kickers the commission per meeting goes up exponentially. The 41st meeting was worth $80.5, the 42nd worth $81.5, the 43rd worth $83, and the 44th $85. As you can imagine, the realm past your quota is a fun place to be.
SDR Average Quota for Software Sales
Sales development reps are expected on average to set 21 introductory meetings for their Account Executive per month. However, some companies might choose to give a quarterly quota. Also, as a rule of thumb, the lower the price of the product the more meetings an SDR is expected to set.
- Call Quota: These average out at about 40-50 cold calls per day.
- Email Quota: Most SDRs are expected to send at least 25 personalized cold emails a day.
- Shadow Quotas: Some managers incentivize SDRs to attend a certain number of demos held by account executives so that they learn the ropes.
- Qualified Opportunities Created Quota: The average number of qualified opportunities created is 15 per month on average, according to Blossom Street Ventures.
- Revenue Quota: Revenue is the ACV of Closed/Won deals that resulted from a meeting you booked. These quotas encourage reps to book meetings with qualified prospects from large accounts.
Some B2B software SDRs experience unreachable quotas and are therefore unintentionally incentivized to book meetings with unqualified prospects. If you feel like your quota is unattainable, check with your colleagues and see how many are reaching the quota. 80% of the reps should be able to reach it. If that’s not happening, consider talking to your manager or thinking about switching companies.
SaaS Account Executive Average Quotas
The average annual quota for a SaaS account executive is $770K in average contract value (ACV). The same study by the Bridge Group found that the median was slightly lower at $690K, signifying that some outliers are likely driving up the average.
Also, the study found that if you remove the companies earning below $10 million in annual revenue, the average annual account executive quota goes up to $850K. So, the size of your prospective company will also play a factor in determining your revenue quota.
As a rule of thumb, a SaaS sales rep’s revenue quota should be about 5x their OTE (base + commissions + bonuses). So, if your OTE was $150,000/yr, your quota will likely hover around $750,000/yr. In some instances, if your company’s product is insanely sellable, you might see revenue quotas of 6x or 7x OTE, but it’s less likely.
Besides revenue quotas, software account executives might also be responsible for hitting other activity quotas:
- Software Demos Held: Most software account executives should try to give at least two demos a day, but it depends on the price-point of your product.
- Conversations Had: Aim to have at least 5 productive conversations a day. These refer to calls with current prospects. They could be discovery calls, follow-ups, or objection handling conversations.
- Follow-up Emails: This number completely depends on how many deals you manage in your pipeline at once. If you also do your own prospecting, this number is probably upwards of 20 emails a day.
Sometimes these quotas will be enforced by your manager. Other times they’re simply recommendations from the management of what to track to ensure you’re progressing towards your revenue targets. In other words, they’ll be self-imposed.
Bottom Line: Average Quota for Software Sales
Any rep should strive to exceed your sales quota, in order to make the most money, garner the most respect, and set themselves up for promotions or a new job in the field. In order to meet your revenue quota in SaaS sales, we recommend setting mini-quotas that you must hit each day and, at the end of each workday, reflecting to see if you succeeded. These could be calls made, conversations started, or even LinkedIn connections created. The little things add up to that glorious %150 quota attainment.