Preparing your SaaS business for next year by leveraging your B2B sales funnel metrics
In this article, I want to present a straightforward yet powerful tool designed for SaaS founders to effectively plan and reach their business objectives for 2024. Following the interest generated by my previous piece, this article focuses on employing forecasting techniques based on the key performance indicators (KPIs) of your sales funnel.
Understanding these metrics is crucial in setting realistic targets for your teams and provides a reliable framework for tracking your business’s main KPIs through your sales funnel.
A Template for Growth Projection
To ensure your business is on the right trajectory towards your 2024 goals, this template will help you understand the necessary monthly growth required. You’ll learn to calculate the number of customers needed to meet your targets and determine the volume of leads essential for reaching your goals.
This process involves setting specific targets for different teams within your organization. The marketing team, for instance, will have goals related to lead generation and converting these leads to Marketing Qualified Leads (MQLs).
Simultaneously, the pre-sales team will have targets for converting these MQLs to Sales Qualified Leads (SQLs). Additionally, the template guides on the ideal timing for hiring additional resources, such as expanding marketing, pre-sales, and sales teams, including the addition of Business Development Representatives (BDRs), Sales Development Representatives (SDRs), and Account Executives, to ensure the achievement of these targets.
Essential Inputs for Forecasting
To create an effective and realistic forecast, you will need to consider several key factors. These include your goal for the next year, your current Monthly Recurring Revenue (MRR), and the net churn rate. A critical part of this process involves analyzing the average conversion rates of funnel metrics from the previous year, encompassing the transition of Trials to MQLs and their subsequent conversion to closed deals, whether from MQLs or SQLs. Additionally, the Average Monthly Sales Price plays a vital role in this analysis. For more detailed guidance on tracking these metrics, you can refer back to the insights provided in the previous article.
The Template
… and also a quick video on how the template works:
This strategic approach to leveraging sales funnel metrics is essential for SaaS founders who aim to make informed decisions and align their teams toward achieving key business goals. By applying this model, you can gain a clearer perspective on your growth trajectory, preparing your company for a successful 2024.
If you need to understand how to track your B2B Sales funnel metrics, please check my previous piece on that topic: Setting up your first B2B sales funnel.
If you are interested in discussing your business idea or your scaling challenges, don’t hesitate to reach out directly to petar@launchub.com
While this model is a useful tool, it’s important to note its limitations. The model does not account for potential improvements in the Average Sales Price (ASP) throughout the year. It operates under the assumption of a negative net churn, without considering the upselling of existing customers. The model also does not factor in the need for additional budget allocations to meet your targets or the potential impact of releasing new features or products. Also, it uses a very simple Sales funnel structure (Trials, MQLs, SQLs, Closes), however, if that doesn’t correspond to your reality, reach out and I can help with creating a model for your own GTM motion.
