When asking ourselves what is an account executive, it’s important to look at the data behind the work they do. Not only do we cover what does an account executive do on a daily basis, but also we discuss the average account executive salary.
The Bridge Group put together a phenomenal survey of inside sales teams at 384 B2B SaaS companies. The median revenue of the companies surveyed was $27mm, the median ACV was $25,000, and the median sales cycle was 60 days. Below we summarize some of the parts we found most insightful.
What is an Account Executive
Account executives (AE) typically sit with the sales team. They help build a business by identifying new customers and maintaining relationships with clients. On average, 7.2 AEs report to a sales leader.
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In comparison, Sales Development Representatives (SDRs) are responsible for surfacing new leads and are the initial point of contact, while AEs are responsible for closing deals and building a company’s customer portfolio.
Experience Required to be an Account Executive
At hire, the average AE has 2.6 years of experience and needs 4.5 months to ramp. Only 12% of companies require that an AE have more than 5 years experience before hiring.
As the ACV rises, however, companies require more experienced reps and ramp time also increases. The average tenure of an AE is only 2.4 years meaning you only get 25 productive months out of each hire (tenure minus ramp time).
On Average, 66% of Account Executives are Supported by an SDR Team
Even when ACV is small, 48% of those AE teams are still supported by SDR’s. When ACV is over $100k, 83% of AE’s are supported by SDR’s.
It’s never too early to start an SDR team, and according to Bridge, an average SDR team will have a positive return so long as ACV is above $8k. The higher your ACV, the more of the pipeline will generally come from the work of SDR’s.
What Does an Account Executive Do?
Account Executives Call and Email, A Lot
AEs average 33 dials and 33 emails per day. Out of those 33 dials, there were 6.3 quality phone conversations per day, which results in 6.8 demos per week. The higher the ACV, the fewer demos per week. Companies also spend $477 per AE per month on sales tools/software.
Their Outbound Efforts are Important
36% of AE’s pipeline is from marketing. That means the other 64% needs to be filled by outbound efforts of the Account Executive (every AE should do some level of outbound outreach), SDR team (generates 25% of the pipeline), referrals, and upgrades. In addition to researching potential prospects with sales prospecting tools that are ready to buy, outbound efforts also may include cold calling and email outreach. As companies get bigger, marketing becomes a smaller fraction of the pipeline.
How are AE Sales Accounts Allocated?
Leads are doled out by territory or round robin. 41% of companies under $50mm in revenue segment AE’s by territory while 48% simply round robin their leads. 76% of companies over $50mm in revenue segment by territory while only 22% round robin their leads. While round robin works for smaller companies, as revenue grows, unfortunately, complexity increases meaning AE’s will have to be segmented by some criteria (territories, by vertical, named accounts, etc).
Career Trajectory and Compensation
What is an Account Executive Salary?
According to the Bridge Group, the average base salary is $62,000 with on-target earnings of $126,000. This reveals the typical 50%:50% base : variable split. Total compensation has risen over the last seven years.
With that in mind, 67% of AE’s achieve quota. The average commission rate at quota is 10%, and 59% of companies pay the same commission on expansion as they do for a new booking. Notably, 34% of companies pay no commission for a renewal.
What is a Sales Manager Salary?
A Sales Manager on average makes $138k and a VP of Sales makes $243,000.
Compensation for Complementary Roles
What is an SDR Salary?
The average compensation for an SDR is a base salary of $46,000 and OTE is $72,000. Bridge Group believes the pay is low and falling because companies are hiring less experienced reps.
What is a Customer Success Rep Salary?
Customer Success reps have a base salary of $61,000 on average. That said, on-target earnings are $100,000 for a CS rep. For an AE, the base is $62k on average with OTE of $126,000. The higher the ACV, the higher the OTE. The average annual quota of such reps was $770,000 for a Bookings/Earnings ratio of 6.1x. As ACV rises, so does quota.
Sammy is a co-founder of Blossom Street Ventures. They invest in companies with run-rate revenue of $2mm+ and year over year growth of 50%+. We can commit in 3 weeks and our check is $1mm. Email Sammy directly at sammy@blossomstreetventures.com.
