2024 SaaS Account Executive Benchmarks - The Bridge Group Report

Live from Schenectady, New York, it's SaaS Talk with the Metrics Brothers, Growth and CAC.

And I'm Growth, better known as Ray Reich, founder and CEO of Benchmarkit.

And I'm CAC, better known as Dave Kellogg, independent consultant, EIR at Balderton Capital, and the author of Kelblog.

And together we are the Metrics Brothers.

And we go together like C-3PO and R2-D2.

Ah, I'm a big Star Wars fan. Robotic space explorers who are loyal to their mission. But Dave, you have a much better language capability than I do, so you have to be C-3PO.

Okay, okay. Well, I'm not sure about that, Ray, but even with our respective backgrounds in marketing and sales, we did find a common language, uh, the language in the language of SaaS metrics.

I love that. With that as a foundation, let's move on to our topic of the day, and that's the 2024 SaaS Sales Benchmarks Report from The Bridge Group.

But before we do that, Ray, let's hear a word from our presenting sponsor.

The Metrics Brothers is proudly sponsored by Benchmarkit, the B2B AI and software industry's largest, broadest, and most contextualized benchmarking index. Dave Kellogg and Ray Groth Wright have put the Metrics Brothers podcast on hiatus for remainder of 2026. All episodes we have ever recorded are still available on your favorite podcasting app. You can reach Dave at Kellogg and Ray on LinkedIn at Ray Reich. Thank you so much for listening to the Metrics Brothers podcast. Okay, Dave, this is a report that I've been using since 2007. So 2007. Now, interesting, they often have a 2-year space between the reports. So instead of doing it every year, they do it every couple of years. So the last one they had done was at the beginning of 2022. So it really reflected more 2021 data. This one they did at the end of 2023. So it really does reflect 2023 data.

Okay, well, cool, Ray. Uh, somehow I have never seen this report before. So one of the fun things about doing the podcast with you is that we, we find stuff that's just not in our regular flow. And I was really happy to— that you found this report because it's got a lot of great data in it. Why don't you first tell us a bit about the participants, Ray?

So it was 172 executives, so not a huge N, But this has been pretty consistent over the last couple of reports for them. 87% are North American, which is kind of the Bridge Group is more of a North American-centric organization. Median annual revenues was $24 million. And the median annual contract was about $47,000. But what was really nice about this, Dave, if you look at the distribution, whether it was by ARR or by ACV, Almost every one of their segmentations had at least 15% of the population was in the, you know, $20 to $50 million range, or $50 to $100 million, or $5 to $20 million. So great broad distribution.

Awesome. So, uh, Ray, I noticed that when you dove into this report, you zoomed right in immediately to marketing contribution, uh, uh, to pipeline. Uh, want to talk about that?

I do. And, you know, because, you know, We both have different initial career journeys. Yours was more through marketing and mine was more through sales. So I thought I had to make sure that the marketing contribution by ACV was the first one we did. So let me first of all start with the good news for those marketers out there because the last 2 years have been hard, right? So marketing contribution to qualified pipeline for the entire population was 33% in 2022. Dave, that went up to 40% in 2024. So almost up 20%. And before we dive into the segment differentiators, why do you think that was? Are you surprised that marketing actually increased their contribution over the last 2 years?

Well, no, I'm actually surprised by how, how, how low it is, to be frank. I mean, I've worked with companies that get up to 95% of their pipeline from inbound, and those are even enterprise companies. Certainly at small ACVs, you expect it to be high, and I would expect it to be higher than 60% or so. Um, so I wouldn't say I'm surprised by the increase. I think we'll see on another chart, which I'm going to sneak in on you, it's coming from a shrinkage in outbound. And I think outbound got a lot harder during that time period. So I'm not surprised to see that, but I am surprised to see in general, you know, look, the general pattern they have is marketing falling as ACV rises, you know, average contract price rises. So, you know, $250K deals, they're saying, hey, only a third comes from marketing. But like, you know, for $25K to $50K deals, they're saying only half comes from marketing, which to me frankly was a surprise.

Yeah, you know, maybe the marketing attribution software wasn't gamified enough yet, Dave.

Uh, it could be, right? I'm going to sneak one in on you. I want to talk about slide 13 now. So we were just talking about slide 11 for those following along in their handbook, but now we're on slide 13 of this Bridge Group SaaS AAE benchmarks, and they're showing basically all— because the first question I have is, where's the rest of it come from, right? And this slide shows that, and it's showing— well, it's not showing the progression year over year, but it is saying basically that, that marketing is doing, you know, around half, converging down to 35% for big deals. It's showing as ACV rises that outbound increases, which makes sense. It shows AEs at roughly constant at around a quarter, uh, of the pipeline gets generated by AEs. And it shows channels a little bit all over the place, but roughly 10%. So I think I don't know, Ray, what do you make of this?

Well, I think as the deals get much larger, to have more AE self-directed, that makes a lot of sense because, you know, it's like 23% in the lower end, up to 30%. That makes a lot of sense. And then SDRs also went up dramatically on the outbound side from, you know, 11% in less than $5K to 25%. It's almost twice as much for large. This makes total sense to me, Dave. Now we're not going to get into the whole discussion about what's the life cycle of SDRs going forward, but I think SDR contribution over time could get lower and lower.

So 2 things. One, just for the audience, when Ray says goes up, he's talking about as a function of ACV, because we were also talking about over the last 2 years, and Ray is basically saying, hey, it doesn't surprise him that, uh, outbound SDRs generate 11% at less than $5K deals but 20 or 25% at $100K plus. I'm with you on that. The part that I'm not with you with is, is on AE self-generated pipeline. Look, the enterprise deals here, the $100K+ deals, AEs generating 30% of the pipeline themselves, that makes a ton of sense to me. AEs generating almost a quarter of their pipeline for less than $5K deals makes like almost no sense to me. I don't know why inbound isn't bigger there.

I don't know why either. And I don't— honestly, I don't know why we have SDRs in the less than $5K. We should have full-cycle AEs, but I think as we move more and more towards customer acquisition efficiency, Dave, that's going to change. It has to.

I agree with you. I also agree with your prior assertion that SDRs, I think— look, there's an arms race with SDRs, and soon everybody's going to have hyper-personalized emails and outreach sequences driven by SDRs. And I think it's going to only reduce effectiveness, to be honest. I think the fast implementers will get a transient advantage, but I think once everybody has it, it's just going to actually hurt the productivity of the whole category. So, I'm not a huge believer in outbound, call it my marketing bias, but we shall see. Ray, let's hit renewals. There's a chart here that talks about renewals responsibility. I found it super interesting. Let's hear from you first though.

So, well, we've kind of picked on SDRs and outbound. So now we're going to pick on customer success and CSMs. But so let's talk about the renewals first. So, account managers, account management is really rising in popularity. Where in 2022, only 24% of companies reported that renewals were managed by an account management function. So not an AE and not a CSM. That went up 10 percentage points to 34% in 2024. And what went down the most? Customer success managers, where 38% of companies were using CSMs for renewals in 2022. It's down to 32% in 2024. And AE's pretty stable, down a little bit, 17% to 14%. But man, I can't believe that CSMs went down versus going up in the last 2 years, Dave.

Yeah, I mean, there's been kind of industry-wide pushback on customer success, um, as we've talked about in prior episodes, a little bit led by Frank Slootman. Uh, and my short answer is, if you're not Frank Slootman and you're not running Snowflake, maybe you shouldn't just automatically do what Frank Slootman did, because a lot of his wisdom works for, you know, enterprise companies, big deals. Um, The thing on this slide here, slide 14, Ray, look, this is basically saying that everybody has a 3-participant model where there's an account executive, an account manager, and a CSM. And personally, I like to have only 2 of those 3 wherever possible. And my solution is to have salesy CSMs, and the salesy CSM does the renewal, um, in rare cases with an assist from the AE if there's like a bake-off or a rebid or that sort of situation. So I actually don't like the trend line here. Because this data says a lot of people— and the thing I don't think they're showing here, maybe we'll see it later, is ratios. I guess if you have one regional renewals rep, East, West, Central, I'm okay with it. But if they're staffing up that AM function in large degree, now we've got 3 roles. And, and personally, I think it's kind of one too many. What do you think, Ray?

The answer is yes, unless you're at real scale, $100 million or more, and you're doing a lot of upsells and cross-sells, I think it's going to negatively impact your CAC efficiency metrics.

But Dave, wait. Yeah, I mean, that's it, right? Right, we're— everyone's all excited about CAC payback period and CAC ratios, and we're staffing 3 roles that arguably, if you listen to Frank Slootman, should be 1, right? Just sales rep. Um, and we said, hey, let's specialize customer success versus sales, which I agree with. And now we say let's further specialize kind of— well, part of this, right, is the definition of AM. I'm assuming it's kind of renewals rep. But sometimes it's also expansion rep, as we'll see in a minute. So, but I know it's very popular, but I'm not in love with this 3-player model. And I'm pretty sure you're going to say, let's talk about who does expansion then.

Yeah.

And the relative roles in renewal. So you want to talk about that?

I do, but I'm going to derail for a minute. So history often is the best predictor of the future, right?

Yeah.

So in the predecessor to SaaS, which was timesharing, We had 2 people that did 4 people's roles today. We had an account executive who was responsible for selling, managing, and maintaining renewals. And then we had a solution consultant who was responsible for doing the demos and then basically being the customer manager, project manager post-close. So today we have 4 roles instead of 2. I think we need to go back to 2 roles. I really do. But that's—

and you're never allowed to say timesharing again. You have to say previous subscription models. We're gonna— people are gonna think you're 80 years old, Ray, and very well preserved.

That's true. Okay, well, let's go to expansion then. So let's start with customer success managers because they had less responsibility for renewals. Whoa, upsells! 2 years ago, 19% of companies had CSMs at least being responsible for identifying and helping with upsells. That's down to 8%. That's like a 60% decrease. At the same time, for upsells, account managers went from 29% in 2022 to 42%. So those account managers are not just doing renewals, Dave, they're doing upsells. Now, I do think one of the things Bridge didn't do here was define what an upsell is versus a cross-sell. So I'm assuming an upsell is just getting more users or more usage for the product. What do you think about upsells here?

Yeah, I mean, my standard definition is upsell is either seats or additions. You know, you go from gold to platinum, you go from 10 seats to 20 seats, that's upsell. Uh, cross-sell to me is that you buy product 1, uh, and then we sell you product 2. So, so look, my takeaway on this slide, Ray, is basically customer success is a little bit in trouble here because it, it's only about a third of the time the renewals rep, and, and less than 10% of the time it's the expansion rep. So, so what it means is that the AM, the account manager— you could kind of call this slide the revenge of sales because the AMs presumably work in sales, and this represents sales kind of taking back responsibility for renewals and upsell and cross-sell. And, and that's— look, I'm not necessarily opposed to that. It makes me sad for customer success because customer success appears to be turning into an advanced tech support function. That's what I— when I look at this, I see kind of technical support. We've got it, okay, a third of the time we'll do your renewal, but we're really not the primary people doing expansion of either flavor. Um, and by the way, a third of the time the account manager is doing renewals. So to me, customer success is kind of on notice that they, they seem to be kind of quietly being replaced by, by sales, who's creating an AM role to do the selling part of the job, leaving behind essentially advanced support, onboarding, you know, what I would call roughly hugging.

I totally agree. And I know Jason Lemkin from SaaStr came out and he also has been talking about the demise of CS. But this is a podcast episode about sales and AE benchmarks. So, I'm going to move on to compensation trends for sales, if that's okay, Dave.

Well, I want to sneak one in on your way. I'm sorry. Slide 17, real quick. This is the percent of people who have at least 3 roles. And so, this cuts directly. And they're saying that as you get bigger, You're talking between 60% and 70%, 75% of people who have what these guys call triple specialization, i.e., SDR plus AE plus AM and/or CSM. So, um, interesting. I wish they didn't have SDRs as part of this, to be honest. I wish it was just triple specialization amongst AE, AM, and CSM, which is what we're looking at. But, uh, anyway, I'll be happy to skip over to comp like you wanted to here, and I think we're going to slide 39 for those following along.

We are going to go. So, account executive on-target earnings, also known as OTEs. The last 2 years were supposed to be about growth efficiency and getting profitable, right, Dave? The OTE at median for this population went from $167,000 on-target earnings to $190K. That's a 14% increase over these 2 years. In VC, you know, typically OTE is around 50/50, 50% base salary, 50% commissions. This one had very close to that. 47% was commissions and 53% at median was base salary. But I was shocked that OTE went up that much over the last 2 years.

Yeah, certainly not good for the CAC ratio. The, uh, the, the even more interesting point, I'm not sure over exactly what time frame, I think it's a decade-long time frame, Quotas increase every year at 2% and OTEs increase every year at 5%, which is clearly a trend line that is not beneficial to customer acquisition cost. So that's pretty funny. But yeah, I'm not surprised at the OTE level. I'm not surprised at the split. 50/50 is my rule of thumb. I'm kind of surprised it's not everybody at 50/50, to be honest. But that's compensation. It's going up. You'd think in a looser labor market that trend may not continue. Labor market's been pretty tight. Let's skip over now to slide 45, Ray, and talk about commissions.

Well, OTEs go up. So it's like, was it base salary? Was it variable comp commissions? So in 2024, when this survey was conducted, the commission rate at median was 11.5%. Now that's up from 10.3% In 2022. So you might say, well, 11.5% minus 10.3%, that's only up 1.2%. But if you do it on a whole number basis, that's a 15% increase in the commission rate over the last 2 years. And then if you zoom out and go back to 2012, the median commission rate was 8.5%. And it just seems— why is our CAC ratio keep going up? It's because we keep paying salespeople more and more.

And I think, I think it might also be because marketing is getting harder and harder as you pick the low-hanging fruit. But, but certainly, yeah, commission rates are going up. And kind of funny is, we'll get to at the end, attainment is kind of, I think, going down. So, so, so it turns out you can't just raise quota and get more sales. We'll come back to that in a minute. I do want to hit one you skipped, Ray, which I think is important, which is the old— one of, I know, both of our favorite metrics— the old quota-to-OTE ratio. And to me, this is a golden rule. 4x is my rule of thumb. If pressed, I'll say, well, it should be between 4 and 5. And here they show that 44% of companies are between 4 and 6x, meaning that quotas are 4 times OTE. So if the OTE is going to be 190, i.e., around 200, that means we're going to expect the median quota to be around 800, maybe 900 if they go to 4.5x. So because the other thing you might see, right, is if the OTs are going up and this ratio is being held constant, then quotas should go up. And the only real question is, does attainment also go up and does productivity also go up?

Yeah, I think it was in the median. I don't— I'm not looking at this slide. I'm doing this off memory. I think the median was 4.2 in this report. Is that correct, Dave?

Good memory, Ray. Yeah, absolutely. 4.2 is the median.

Okay. So let's go. So now we've seen compensation rise, right? And my brother over here, CAC, says marketing is not being as efficient and that's one of the reasons. But So we have, okay, if we went up in comp by 14%, where did quotas go? Quotas at median went from $740,000 to $800,000. That's only an 8% increase. And I'm like, just basic math, just 2 variables. If your compensation is going up by 14% and your quota is only going up by 8%, you probably have a higher sales CAC ratio, right?

Well, so all the data shows CAC ratios going up, and in particular CAC payback period. I can't remember whose chart it was, but there's one we looked at the other week where Where somebody, you know, the average CAC payback has gone up to, I don't know, from 18 to 22 or something in that range. So CAC payback periods are definitely going up, but I think that's a result of these kind of underlying drivers. The other thing I'd say about marketing productivity, by the way, Ray, just to be a little more precise for my marketing brethren, the number one complaint I hear from marketers is paid channels are getting unsustainably expensive. And that's the actual problem is I have people coming to me saying, Paid doesn't make sense anymore. I can't scale paid anymore because it's already expensive. It's getting more expensive, et cetera, et paribus. And if you want me to even go even more beyond my plan, then it gets kind of, you know, hockey stick level, even more expensive. So hearing a lot of pain in the marketing teams about that.

Makes total sense. Here we are, we're at 20 minutes. We've only got 2 charts left to cover, so we'll cover them quickly. But you mentioned it earlier, quota attainment. So we raised quotas, but at the same time, quota attainment went from 66% in early 2022. So that was really more looking at 2021 actuals. It went down to 51%. So we're raising OTE, we're raising quotas, and quota achievement goes down that much, Dave. It's like, no wonder we're having an issue in the industry.

Yeah, uh, I, I think you get pushing on a string. I mean, you can raise the quota, but you, you actually want to change is the productivity. And if you raise the quota and hold the productivity constant, this is exactly what you see, which is attainment goes down. I wish they actually did productivity explicitly here of just how much do people sell per year. I could probably guess it from or calculate it from some of the other numbers. But to me, whenever you're looking at this kind of data, I want to look at quota and I want to look at productivity. The difference being quota is what we assign them. Productivity is what they actually sell.

And then the last thing that we're going to talk about You talked about how hard it is, especially with paid, to create more qualified pipeline. We all know that pipeline has been a bear the last 2 years. At the same time, win rates, win rates are down at median across the board by 4% from 23% in the 2022 report, i.e., FY21, to 19% in both low end. So less than $5K. And higher end, $50K to $100K, both saw 4% decreases. So it's getting harder to generate pipeline, it's getting more expensive to try to close pipeline, and we're closing less of it, Dave.

Yeah, the one thing, Ray, this is gonna be a topic for a future episode, I think, but, but is the opposite of win rate equal to required coverage? I think in many cases it is not, that they're making an analytical error here because they're basically saying, hey, if you invert these win rates, then you used to need 4.3x coverage and now you need 5.3x coverage. And I think it's probably a That's a topic for another day, but let me just say the core issue I'm addressing here, Ray, is timing. That I think the time period for win rates are measured differently than the time period, uh, for, um, pipeline coverage. And we can cover that more in detail in a future episode.

You're exactly right. And by the way, win rate is not a single point in time calculation. It changes over time. As sales cycles elongate, you're going to see a lower win rate. in the 4th part of a sales cycle versus in the 3rd part of a sales cycle.

But okay, Ray, sounds like the cops are coming for you again.

Okay, well, you know how it is here in Schenectady. We have a lot of police action. So Dave, thank you for talking about sales benchmarks with me and getting quite a few marketing insights into that.

Thanks, Ray. Been a lot of fun.

Thanks, everyone.

The Metrics Brothers AI, SaaS, and More is a production of The Metrics Brothers Growth and CAC. And a member of the Bench Market Podcast Network. By accessing this podcast, you acknowledge that the Metrics Brothers make no warranty, guarantee, or representation as to the accuracy or sufficiency of the information provided or the humor content of the jokes told. Ray, information, opinions, and recommendations presented are, according to our spouses, probably wrong and provided for information purposes only. This podcast should not be considered professional or, for that matter, unprofessional Advice. We disclaim any and all liability for any direct, indirect, indirect, misdirect, incidental, special, ordinary, consequential, inconsequential, or other damages arising out of any use of, or God help you, reliance upon the information presented here. Ray Grothreich is based in New York City and available on X at Ray Reich.

Dave Kellogg is based in Silicon Valley and available on X at Kelblog.

Schedectity, which is French for unspellable, is not our actual production location. Thanks for listening.