Sales Capacity Modeling: A Key to Scaling Your B2B Sales Organization
Scaling a sales organization isn’t just about generating more leads or reducing sales cycles. To hit your growth targets, your team needs the capacity to deliver. That’s where a sales capacity model comes in. By leveraging this model, you can ensure that your team has the right number of sellers to achieve the bookings you’re aiming for.
What’s Included in a Sales Capacity Model?
1. Sales Census This includes your sellers, their quotas, and their start/term dates (including any planned hires or backfills).
2. Ramp Schedules Understanding how long it takes for a new rep to become fully productive is essential. This ramp period is often longer than anticipated, and may vary across segments (e.g., SMB, mid-market, enterprise).
3. Productivity Assumptions What are your reps actually delivering? If you have 10 reps with $100k quotas, expect some variability in attainment—some will overachieve while others fall short. Historical data and changes in enablement or products can influence these assumptions year-to-year.
4. Compensation Details Include both salary and variable pay to check your quota-to-OTE ratios. For new business reps, a 3-5x quota-to-OTE ratio is typical, while account managers focused on expansions might see 6-8x.
5. Seasonality When do your bookings typically land? If a large portion of sales happens in Q1 and a new hire starts in Q2, their quota needs to reflect that timing.
6. Attrition You won’t end the year with the exact team you start with. Estimate potential departures and apply a reduction to account for the time spent hiring and ramping replacements.
How to Build the Model
Rep Roster Start by building a roster of your sales teams, including key data points:
Name
Territory code
Team
Quota (fully ramped)
Start Date
Ramp Start Date (when ramping starts, e.g., first of the month)
Term Date
Monthly bookings (calculated as Quota × Seasonality × Ramp)
This gives you a ramping-year quota for new hires.
Manager Rollups Using the rep roster, roll up quotas by manager to calculate team quotas. Then apply an overassignment adjustment to manager quotas.
Assumptions Keep assumptions like seasonality, ramp schedules, overassignment, productivity, and attrition in one place for easy reference. You could include them where they’re used, but I find it easier to manage all assumptions in one place.
Summary View Create a summary view by team, territory, or region to see total capacity.
Enhancing the Tool
To increase the value of your capacity model, consider:
Differentiating planned hires, current reps, and backfills.
Building views showing ramping vs. fully ramped headcount over time.
Tracking rep tenure, as higher tenure usually correlates with better productivity.
Including prior year quotas and comp values to compare changes, especially when adjusting quota-to-OTE ratios.
Extending the model to future years for long-term capacity planning.
Wrapping It Up
With the model in hand, you’ll have a clear view of your current roster’s potential performance. For example, if you have 10 reps with $500k quotas, that’s a total of $5M in quota. Assuming no attrition and 80% productivity, you’re looking at $4M in bookings. If your target from finance is $4.5M, how do you plan to fill that gap?
Can you expect productivity gains?
Are there large deals in the pipeline?
Do you need to add more reps?
Starting with a capacity model helps you understand the possibilities and identify risks. This can be an excellent tool for both FP&A and RevOps teams.
Next up, I’ll dive into the other side of the equation: generating the pipeline to support this growth. Stay tuned for my upcoming article on building a Pipeline Model.