Presales Analysis Exercise–Defining the Gap

If you find that your presales organization is struggling to keep up with demand, here’s an exercise you can use to analyze your shortfall and create a foundation for scaling presales to meet that demand.

Download the Ebook “Scaling Presales: 8 Strategies to Boost Coverage and Customer Experience With Existing Headcount”

Defining the Gap

Research in the Consensus Sales Engineer Salary and Workload Report shows the median AE:SE ratio is 4:1.

Let’s start with a scenario. Suppose that today we have 40 SEs and we have an AE:SE ratio of 4:1. Now suppose that the future sales team is going to be 230 people. That future state of 230 salespeople divided by four (i.e. the AE: SE ratio) means we need 58 sales engineers to meet the future demand. That’s if we don’t change anything—if we keep doing things the same way and don’t find a way to scale.

So that’s the first step in this simple gap analysis approach. Of course, if we subtract the number of sales engineers we have today, this means we need to hire 18 new SEs. The problem is, this really isn’t scaling— this is just linear hiring. When we talk about scaling, we’re not talking about hiring, even though hiring is always an important part of any plan. The problem is that oftentimes sales will hire without presales getting a compensatory budget to hire on the same correlated path.

So what if you can’t hire enough to keep up? What if that’s just not in the cards? That’s the scenario here. There are lots of other reasons that could cause a demand gap, but in this scenario we’ll assume it is an increase in sales hiring.

Let’s extrapolate a little bit. If we can’t hire at all, the ratio ends up becoming 5.75:1, that’s a 45% increase and that means we have to free up 22 hours per week, per SE. However, sometimes you get some budget to hire, just not enough to keep up linearly with the sales hiring.

So suppose that we could hire six new solution consultants instead of the eighteen that we need. That would end up making the ratio 5:1. That’s a 25% increase in demand even if we get the six new hires. So we have to somehow either ask everybody to work an extra twelve and a half hours a week (a good recipe for losing some of your team) or we have to try to free up 12 and a half hours a week through scaling strategies.

Scenario Summary

Our “Increasing Demand” gap is 12.5 hours per week per SE (or 25% on a 50 hour workweek). Now multiply this by your total team headcount to find the demand gap for the entire team. If you have a team of 25 SEs, you’ve just identified that your demand gap is 312 hours per week or 16,250 hours per year.

Conducting a “Key Activity” Gap Analysis

In this scenario, let’s suppose that we know that we have an increasing demand gap of 12.5 hours per week per SE. We now need to conduct a Key Activity gap analysis to identify activities which are candidates for our scaling strategy focus.

Q: Do you know which activities your SEs are spending time on?

When you look at all of the different things that they get pulled into it’s easy to see why SEs can get over overloaded. It’s also easy to see why SEs are arguably the most valuable resources in your entire go-to-market strategy.

The question that we should ask is “What’s the best use of the SE’s time?” What are the key activities that would change the game if they could spend more time on those?

Again, the answer will be unique to your organization. But let’s just suppose that these are the key things that we want them to spend as much time as possible on: technical demos, POCs, consulting calls, discovery, planning and architecting, and improving product knowledge.

If we could get them to spend 80% of their time on these key activities, then we would say that each sales engineer is really being most effective. If they’re spending too much time on other things, they’re not doing what they’re uniquely skilled to do.

Are there some of these other activities that we can offload so that we can increase the amount of time they spend on these key activities?

Remember that strategy is about tradeoffs.

What would you say No to so that you can increase the time your SEs spend on the best activities?

Obviously, we can’t just say “No, we’re not going to do that.” Instead of saying No entirely, we can ask, “What other way can this be handled?”

The Theory of Constraints

The Theory of Constraints is a methodology for identifying the most important limiting factor that stands in the way of achieving a goal and then systematically improving that constraint until it’s no longer the limiting factor. The limiting factor is often referred to as a bottleneck.

What is the bottleneck in presales?

It may vary from company to company. Maybe the biggest bottleneck is proof of concepts and getting those set up and managed. Maybe it is discovery. As reported by many of the companies we talk to, we’ll examine the bottleneck of doing repetitive and often unqualified demos.

Spreadsheet Sample for Calculating Activity Gap Analysis

Once you know what your SEs are spending their time on, you’re ready to look for opportunities. Let’s take a look at how using a spreadsheet can help.

Another broad way to look at this is that they are spending 58% of their time on key activities today and we want to increase their key activities to 81% of their time.

To increase their time on key activities to 81%, we need to decrease the amount of time they spend on non- key activities. In this example, we’ll decrease their time spent on repetitive demos and customer support:

By increasing key activities and decreasing time spent on repetitive demos, we save 11.5 hours per week per SE. Across an entire team of 40 SEs, that is 23,920 hours per year.