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Pavilion HQ | PUBLISHED ON Jun 29, 2022

BenchSights Benchmarks the Metrics that Drive Software Sales

There’s no shortage of data in business. As an investment banker with 30 years covering the SaaS industry, CEO Pavilion member David Spitz knows that as well as anybody. 

But stale data or metrics without context isn’t useful. Industry leaders face critical decisions every day, and they need answers quickly and based on good information from their own businesses and from the market and economy in real time.

That’s why Spitz founded BenchSights, a benchmarking-as-a-service platform that aims to provide a new way of engaging business leaders to use benchmarking data as a core component of their planning and execution activities. He already had a passion for numbers. His 30-plus years of work in the software industry educated him on the need for having good SaaS metrics, driven by benchmarks, to evaluate great SaaS businesses.  In 2010, he created the Pacific Crest SaaS Survey, which became an industry standard benchmarking resource for SaaS metrics. . In creating BenchSights, Spitz wanted to reimagine the experience of the providers of the benchmarking data and the delivery of the insights and results.  Instead of waiting months or longer to see the results from traditional benchmarking studies, BenchSights provides information in real time so they can put it to use right away.  

“I wanted to build a platform that is unique and makes it really valuable for the contributors right away,” Spitz said. “We provide the benchmarks in real time and also let people know how they compare and rank as soon as they submit their data.  We also let people come back over time and anonymously and confidentially stay connected with their metrics and where they stand.”

Company leaders will see where their company ranks among their peers. The goal is to help them find answers to the most-pressing questions facing their industry.

“It’s a engaging, thoughtful way to get a group of people together to provide information on topics that matter to them,” Spitz said.

BenchSights starts by asking users a few questions via survey or connecting through APIs. Spitz says the goal is for business leaders to spend no more than a few minutes at a time answering questions. The questions are insightful and easy to engage with, which encourages more feedback from users. 

With a clear vision of how to translate that experience to address real-time needs, he started BenchSights in 2021. For a recent benchmarking study, Spitz turned to the Pavilion community to ask a few questions about one of the most pertinent topics in the business world today.

 

Inflation and AE Turnover

With relevance in mind, Spitz’s latest dataset takes aim at questions that are particularly important in 2022 for Software Sales leadership: Inflation in AE compensation & quota, and AE turnover among account executives.

We already knew inflation in the economy has been running very hot, averaging more than 8% year over year in recent Consumer Price Index reports. Spitz had a more pragmatic question: How is this affecting pay for your sales teams, and what should leaders do about it?  And what are recent levels of AE Turnover?

The answers found through BenchSights are both intuitive and insightful. 

 

Survey highlights & results

The key takeaways: AE turnover and AE pay inflation are major problems for the software industry.  According to BenchSights’ results, average inflation for AE compensation in 2022 so far is approximately 14%, with nearly 85% of companies having raised OTE.  At the same time, approximately 60% of companies have also raised quotas, with the average AE quota up 11% this year.

“As a company, if you raise AE quota and OTE in tandem, it may seem balanced and therefore less of a problem economically for the company, but of course there are implications.  From the rep’s perspective, they still need to sell more to achieve OTE.  There’s a higher chance they’ll miss, and thus a higher chance for turnover.”

It’s possible that companies with higher promised payouts are setting unrealistic quotas, Spitz said. Maybe account executives start looking for another job when they realize the OTE was a fantasy. Or it’s also possible that higher payouts attract AEs who are more likely to jump ship when the next-best thing comes over the horizon.

With these concerns in mind, BenchSights launched its second “QuickTake” study on AE Turnover – something that’s been a major concern for many software companies over the past few years.  So far, BenchSights has found that AE turnover rates continue to be high, with ~35% AE turnover over the past twelve months. That’s up  ~10% points over last year. 

Obviously, with the dramatic changes in the funding environment for tech over the past few months, changes in pay and turnover are still very fluid. There’s plenty of speculation that The Great Resignation has already morphed into The Great Reset.  Nonetheless, Inflation and Turnover will continue to be dominant factors affecting the composition and performance of software sales teams. 

BenchSights will be on the lookout for other metrics driving key decisions in software sales.  AE Quota Attainment is a likely candidate, since it is so closely linked to turnover and a critical performance metric.

You can stay tuned by following BenchSights

 

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