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The idea is simply to measure the ratio of sales to everyone else. You don’t need to make judgement calls about which non-QBSR employees “support” sales.

That’s an important distinction from the military usage. Here, the “tooth” is the total headcount of your company’s QBSRs, while the “tail” is simply the entire remaining headcount of the company.

In this context, a high tooth-to-tail ratio indicates both greater combat capacity and overall efficiency.Īpplying the concept to optimizing SaaS sales capacity is where it gets interesting.

The term’s military usage is straightforward: a “tooth” is a combat unit whose effectiveness is linked to a “tail” of logistics, intelligence, and other support personnel. Which brings us to tooth-to-tail: a quick calculation that gives you insight into how much you are investing in sales reps relative to the headcount size of the overall organization. But sales and marketing expense as a percentage of revenue doesn’t sufficiently isolate the contribution of sales in a way that helps right-size selling capacity. In fact, our Magic Number calculator remains one of our most-visited articles. Sales efficiency metrics like the Magic Number are incredibly insightful and suited for measuring the unique sales and marketing dynamics of the SaaS world. But we all know the results of these approaches have varying degrees of accuracy, and the reality ends up being a lot of push and pull to keep capacity properly aligned with growth goals. A top-down approach starts from your company’s revenue targets and works backwards through individual quotas and productivity metrics to arrive at a target number of QBSRs. A bottom-up approach multiplies quota bearing sales reps (QBSRs) by their quotas to arrive at a projection. There are any number of methods sales leaders can use to link sales targets with the size of the sales force. Too many, and morale suffers as your reps compete with each other, straining performance and crushing your Magic Number. Too few salespeople and you miss opportunities or, worse, cede territory to the competition during the the early-market land grab. The art and science of sales capacity optimizationĮvery sales leader knows the struggle to optimize sales capacity. Tooth-to-tail gets you started - especially in the earliest stages of your sales ramp - figuring out how many reps you need to achieve growth targets. In the SaaS context, we’re 10,000 feet above sales efficiency metrics like the Magic Number. military uses to measure combat readiness and efficiency. The term “tooth-to-tail” takes its inspiration from one method the U.S. And when you’re just starting to ramp sales, you’re probably looking for all the quick and reliable insight you can get. It takes just two headcount data points to calculate yet its validity is supported by performance data at several of the highest-growth early-stage SaaS companies in ScaleVP’s portfolio. I call this calculation the “tooth-to-tail ratio”. The good news is that I’ve observed a reliable way to get most of the way to an actionable answer to the sales capacity question. Everything from big-picture decisions like the perfect job description for senior sales leaders to more tactical questions like where the online sales team should sit on the org chart.Ī key question that every growing company asks during annual planning is: “How many sales reps do we need today?” That answer can get complicated fast when you start factoring in how much customer education it takes to sell your product, what market segments you’re targeting, your pricing and pricing model, and so on. A quick calculation that helps sales leaders optimize sales capacityĪ lot of my work advising SaaS companies as they start to scale centers around sales capacity optimization.