Benchmarking Study: Hardware + Software Sales Forces
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February 7, 2025
How do hardware and software (HWSW) sales forces handle sales goals and how do they reward their successful teams? To find out, RevenueShift conducted a custom benchmarking study of HWSW sales forces with revenue between $100M and $800M.
We collected data from 29 organizations' sales and sales operations executives. Our survey focused on organization structure, headcount, quotas, incentive design and compensation levels. We surfaced some surprising findings about sales managers’ spans of control, typical pay-mix and how organizations set individual sales goals.
We found that the most common ratio of salespeople to sales managers was in the 3:1 range. This span of control ratio seemed too low, especially when considering the director level, as it means each sales manager might be operating more like a player-coach. We found a more expected span at the 75th percentile of 6:1.
Pay-mix for HWSW sellers tends to be more conservative than software-as-a-service (SaaS) sellers. It was also surprising that sales managers had the same relative mix as the sellers.
Most HWSW sellers finished the last fiscal year within 90%–99% of quota. There is a noticeable shift to the left in performance, certainly from historical best practice, and it reflects the current market reality and need for proper expectation setting.
Mid-size HWSW organizations had a greater than 10% increase in on-target earnings (OTE) for account executive (AE) hybrid, business development representative (BDR), sales engineer (SE) and channel roles. OTE for sales management, AE Hunters and account manager (AM) farmers were surprisingly similar.
Pay-mix was more aggressive for smaller HWSW companies, too. However, there was a greater difference in pay for senior to junior sellers, and this often reflected more defined career levels.
Here, there was a slight shift to the right in the performance quota for smaller HWSW organizations, which is surprising because there’s often more goal volatility.
Smaller HWSW companies use minimum threshold performance plans to help protect their financials. However, there’s often more variability in outcomes for less mature businesses.
Long-term incentive (LTI) usage is about the same, with around 40% of organizations offering it at small- and mid-size HWSW businesses.
Please reach out if you’d like to discuss the findings or other sales effectiveness challenges you face. We can run custom cuts of our data to suit your specific needs. RevenueShift is proud to partner with clients to create pragmatic, analytics-led solutions that meet challenges at their foundation.
