Why Your Top AE Might Be Your Worst AE
The dirty math behind sales nobody talks about
Your best rep closed $600K last year.
President’s Club. Standing ovation at the all-hands. Promoted to Senior AE. The whole team was told to study what they do.
Your “underperformer” closed $300K. Half the number. Got put on a PIP (performance improvement plan) in Q3. Skipped the team offsite. Started interviewing.
24 months down the line, nobody checked the math.
So I did.
The $600K rep closed 8 deals. Three were outside ICP (ideal customer profile). Two required 30% discounts to win. One churned at month 12 before implementation was even finished. Another downsized at renewal and killed the contract six months later.
By month 36, that $600K book was generating $340K in ARR (annual recurring revenue). Three of the eight logos were gone. Two more were at risk. The customer success (CS) team had spent more time rescuing those accounts than onboarding them.
The $300K rep closed 5 deals. All five were ICP-fit. No discounts. Smaller lands, but every single deal had an expansion path mapped before the contract was signed.
By month 36, that $300K book was generating $710K in ARR. Still growing. Zero churn. Five referenceable customers. CS barely touched them.
Read that again.
The rep you almost fired built a book that generates more revenue in Year 3 alone than your “star’s” book generates in Years 2 and 3 combined.
Here’s what nobody measured:
Cost to close. The $600K rep discounted to win. The actual contracted value was lower than the board deck suggested.
Cost to serve. Out-of-ICP deals need custom work, escalations, and a CSM (customer success manager) who spends 40% of their time on one account. That cost never shows up on the sales leaderboard.
Cost to lose. A churned deal isn’t zero. It’s negative. You spent the CAC (cost-to acquire-the customer). You spent the implementation hours. You burned a CS resource. And you have nothing to show for it at month 14.
Revenue that compounds vs. revenue that evaporates. One rep built an engine. The other built a bonfire.
Most startups measure, compensate, promote, and celebrates on Year 1 bookings.
Year 1 bookings are a signal. But they’re a signal of sales activity, not enterprise value. And most companies never measure the difference.
But you already knew that. You just haven’t changed what you measure.
I see this pattern in almost every B2B SaaS company between $1M and $10M ARR. It’s one of the most common forms of GTM Debt, and it’s invisible until you run the math.
If you ran this analysis on your own team, what do you think you’d find?
Most importantly, how would you course correct?
Wayne
Founder & CEO, RVNU
Concerned about your GTM Debt? Head over to GTMDebt.com a take the free assessment.
This analysis is just excellent. The cost of a ‘ Roman candle superstar’ can far exceed even their crappy retention rates. They cause reputational damage, have a negative influence on the team and contribute to manager burnout. These very real costs are even more difficult to measure.
IMHO, this happens and is enabled by a sales ‘process’ that doesn’t really understand how the customer really measures value. Retention is almost a ‘bonus’, few people actually understand what it really takes to develop a business case for a renewal and growth that captures the Customer Value Generated. So all new business is good business, and sales leaders hope to just outsell the losses, at least until the music stops. 🤮