Are you trying to determine your presales team headcount but are struggling to find the best ratio for your company? Do you ever wonder where that ratio came from in the first place? Is it even still accurate?

Most companies tend to underinvest in presales while in the growth phase because they are so focused on revenue. After they reach maturity, however, if they don’t re-evaluate that ratio, they may be overstaffed. This happens for a variety of reasons including the fact that during high growth, it is often the presales team that becomes the de facto sales enablement team for their Account Executives (AEs).

Sales and Solutions Engineers tend to do a little bit of everything, which often makes it hard to plan how many of them you need. Before you set an arbitrary number, consider your options.

Most companies take a top-down or “sales approach” to headcount planning. In other words, they look at their revenue target and they base how many AEs they need off of that number. Next, they factor in how many SDRs and Sales Engineers (SEs) they need to support those AEs. This is normally based on a ratio that is set by the CFO/CRO. For example you may have 2 AEs for every 1 SE (2:1 ratio).

This type of top-down headcount planning can work fine for companies that sell simple products that are non-technical. But it falls apart for complex products where the presales team is doing most of the heavy lifting. If you don’t have enough Presales/Solutions people, your AEs will watch their deals die a slow death.

For companies that sell platforms and other highly technical products, it may be worth running a data-driven analysis using the “Presales Approach” to headcount planning. Here’s how to do it in three easy steps…

First, we need to figure out what our presales capacity is. In other words, we need to figure out how many opportunities a presales engineer can work on over a given period of time. We can set the time period for the analysis to be weekly, monthly, quarterly, or yearly.

Let’s take an example and say that the average SE is capable of working on 3 opportunities per week. However once per month, that SE will get pulled into a POC and it will take them the whole week. If we do the math, we will find that in any given month, that SE works on about 10 opportunities:

3 weeks where they work 3 opportunities per week = 9 opportunities

1 week where they work 1 opportunity (a POC) = 1 opportunity

—

**Total = 10 opportunities per SE per month. **

We can convert our monthly capacity to yearly capacity by simply multiplying by 12.

**10 opportunities per SE per month x 12 months = 120 opportunities per SE per year**

There we have it! Our Presales Capacity is:

**Presales Capacity = 120 opportunities per SE per year**

Next we must calculate the number of presales opportunities we will need to work on in order to reach quota.

To calculate how many presales opportunities we will need in order to reach our quota, we need to look at 3 numbers:

- New Business Revenue Target
- Average Deal Size
- Presales Close Ratio

Let’s take an example using these numbers:

- New Business Revenue Target =
**$100,000,000** - Average Deal Size =
**$100,000** - Presales Close Ratio =
**25%**

First, we need to look at our new business revenue target and divide it by our average deal size to get the total number of DEALS we need to close this year in order to hit our target.

New Business Revenue Target / Average Deal Size = Number of deals needed

**$100,000,000 / $100,000 per deal = 1000 deals needed**

This means that we need to close 1000 deals in order to hit our revenue target. But since not every opportunity will turn into a deal, we need to have more opportunities than we have deals. To find out just how many opportunities we need to work on in order to close 1000 deals, we can factor in our presales conversion rate.

Let’s say that on average, we close 25% of opportunities that reach the presales phase. Then we can divide 1000 deals by 0.25 and get our total number of opportunities needed.

Number of deals / Presales Close Ratio = Number of opportunities needed

**1000 deals / 0.25 = 4000 opportunities needed**

This means that we need to work on 4000 opportunities, and close 25% of them in order to reach out quota. Now we can do the final calculations to determine our presales headcount needs!

Now that we have both our presales capacity as well as the number of opportunities we need in order to hit quota, it’s simple math to determine our presales headcount.

Presales Opportunities Needed / Presales Capacity = Presales Headcount Needed

**4000 opportunities per year / 120 opportunities per SE per year =~ 33 SEs needed**

And there you have it!

We need approximately 33 Presales professionals to handle the amount of opportunities that we may face this year. The unique thing about this number is that it is independent of the number of AEs needed. We will explore this more later, but we now have a data-driven approach to headcount planning, rather than one that relies on arbitrary ratios.

You may find that using the “Sales Approach” and the “Presales Approach” yield the same number of presales professionals. That’s a good thing because it probably means that your current AE:SE ratio is still accurate. When each approach produces wildly different results however, then you may want to consider taking a closer look at your ratio to see if it’s still accurate.

We don’t recommend using exclusively one approach when doing headcount planning. If you do, you risk being too “top-heavy” (too many AEs) or too “bottom-heavy” (too many SEs). When you’re top-heavy, your pipeline looks healthy, but you can’t close anything because AEs don’t have enough support from Presales. When you’re “bottom-heavy” you have Presales people waiting around because there isn’t enough pipeline to keep them busy. In either case, you miss your revenue target.

Consider challenging “the ratio” method of headcount planning or, at the very least, check if the ratio is still accurate by using data about what your presales team can realistically support. Revisiting your presales planning is a good idea since products, buying patterns, and sales motions change regularly.

Unlike traditional presales training that teaches engineers how to give demos, Alpha Presales training teaches engineers how to be more efficient. Book a call with Alpha Presales and help your team get more done in less time by being more efficient.

Are you trying to determine your presales team headcount but are struggling to find the best ratio for your company? Do you ever wonder where that ratio came from in the first place? Is it even still accurate?

Most companies tend to underinvest in presales while in the growth phase because they are so focused on revenue. After they reach maturity, however, if they don’t re-evaluate that ratio, they may be overstaffed. This happens for a variety of reasons including the fact that during high growth, it is often the presales team that becomes the de facto sales enablement team for their Account Executives (AEs).

Sales and Solutions Engineers tend to do a little bit of everything, which often makes it hard to plan how many of them you need. Before you set an arbitrary number, consider your options.

Most companies take a top-down or “sales approach” to headcount planning. In other words, they look at their revenue target and they base how many AEs they need off of that number. Next, they factor in how many SDRs and Sales Engineers (SEs) they need to support those AEs. This is normally based on a ratio that is set by the CFO/CRO. For example you may have 2 AEs for every 1 SE (2:1 ratio).

This type of top-down headcount planning can work fine for companies that sell simple products that are non-technical. But it falls apart for complex products where the presales team is doing most of the heavy lifting. If you don’t have enough Presales/Solutions people, your AEs will watch their deals die a slow death.

For companies that sell platforms and other highly technical products, it may be worth running a data-driven analysis using the “Presales Approach” to headcount planning. Here’s how to do it in three easy steps…

First, we need to figure out what our presales capacity is. In other words, we need to figure out how many opportunities a presales engineer can work on over a given period of time. We can set the time period for the analysis to be weekly, monthly, quarterly, or yearly.

Let’s take an example and say that the average SE is capable of working on 3 opportunities per week. However once per month, that SE will get pulled into a POC and it will take them the whole week. If we do the math, we will find that in any given month, that SE works on about 10 opportunities:

3 weeks where they work 3 opportunities per week = 9 opportunities

1 week where they work 1 opportunity (a POC) = 1 opportunity

—

**Total = 10 opportunities per SE per month. **

We can convert our monthly capacity to yearly capacity by simply multiplying by 12.

**10 opportunities per SE per month x 12 months = 120 opportunities per SE per year**

There we have it! Our Presales Capacity is:

**Presales Capacity = 120 opportunities per SE per year**

Next we must calculate the number of presales opportunities we will need to work on in order to reach quota.

To calculate how many presales opportunities we will need in order to reach our quota, we need to look at 3 numbers:

- New Business Revenue Target
- Average Deal Size
- Presales Close Ratio

Let’s take an example using these numbers:

- New Business Revenue Target =
**$100,000,000** - Average Deal Size =
**$100,000** - Presales Close Ratio =
**25%**

First, we need to look at our new business revenue target and divide it by our average deal size to get the total number of DEALS we need to close this year in order to hit our target.

New Business Revenue Target / Average Deal Size = Number of deals needed

**$100,000,000 / $100,000 per deal = 1000 deals needed**

This means that we need to close 1000 deals in order to hit our revenue target. But since not every opportunity will turn into a deal, we need to have more opportunities than we have deals. To find out just how many opportunities we need to work on in order to close 1000 deals, we can factor in our presales conversion rate.

Let’s say that on average, we close 25% of opportunities that reach the presales phase. Then we can divide 1000 deals by 0.25 and get our total number of opportunities needed.

Number of deals / Presales Close Ratio = Number of opportunities needed

**1000 deals / 0.25 = 4000 opportunities needed**

This means that we need to work on 4000 opportunities, and close 25% of them in order to reach out quota. Now we can do the final calculations to determine our presales headcount needs!

Now that we have both our presales capacity as well as the number of opportunities we need in order to hit quota, it’s simple math to determine our presales headcount.

Presales Opportunities Needed / Presales Capacity = Presales Headcount Needed

**4000 opportunities per year / 120 opportunities per SE per year =~ 33 SEs needed**

And there you have it!

We need approximately 33 Presales professionals to handle the amount of opportunities that we may face this year. The unique thing about this number is that it is independent of the number of AEs needed. We will explore this more later, but we now have a data-driven approach to headcount planning, rather than one that relies on arbitrary ratios.

You may find that using the “Sales Approach” and the “Presales Approach” yield the same number of presales professionals. That’s a good thing because it probably means that your current AE:SE ratio is still accurate. When each approach produces wildly different results however, then you may want to consider taking a closer look at your ratio to see if it’s still accurate.

We don’t recommend using exclusively one approach when doing headcount planning. If you do, you risk being too “top-heavy” (too many AEs) or too “bottom-heavy” (too many SEs). When you’re top-heavy, your pipeline looks healthy, but you can’t close anything because AEs don’t have enough support from Presales. When you’re “bottom-heavy” you have Presales people waiting around because there isn’t enough pipeline to keep them busy. In either case, you miss your revenue target.

Consider challenging “the ratio” method of headcount planning or, at the very least, check if the ratio is still accurate by using data about what your presales team can realistically support. Revisiting your presales planning is a good idea since products, buying patterns, and sales motions change regularly.

Unlike traditional presales training that teaches engineers how to give demos, Alpha Presales training teaches engineers how to be more efficient. Book a call with Alpha Presales and help your team get more done in less time by being more efficient.

Tired of people complaining that you don't tell enough stories? It's never too late to start. Use this simple 3 step formula to get started without having to memorize pages of information.

READ MOREWATCH THE VIDEO

In Episode 24.2 of the SE to -> CEO Podcast, we interviewed Frank Shultz, CEO, Infinite Blue.

READ MOREWATCH THE VIDEO

PreSales teams are frequently understaffed because they rely on ratios that are wrong. Learn how to take control of your headcount using a data-driven approach.

READ MOREWATCH THE VIDEO