Breaking down the sales funnel metrics of our early-stage SaaS company. Part 1 of 3

A look inside our outbound sales funnel at PhoneWagon (Techstars ‘17)

Ryan Shank
Aug 9, 2017 · 6 min read
Founder Ryan Shank breaking down PhoneWagon’s funnel metrics.

The First Sale

On Wednesday January 11th 2017 at 04:14 pm I closed the first sale in PhoneWagon history.

Our Outbound Sales Funnel

For the purpose of this article I’m going to simplify our model a bit and assume we are using 1 SDR making 100 dials a day and 1 AE (account executive) performing demos.

The Daily Funnel

100 Dials

First, we start off with outbound sales cold calls. To feed our sales funnel we have to make 100 dials a day.

14 Decision Makers

When we reach one of these 14 decision makers a day we are going to pitch them. We listen to their pain points and empathize with their problems. It is important for us, in a crowded marketplace, to address the competition and differentiate ourselves. Ultimately we want to build value for them around our product.

4 Demos Set

Out of those 14 decision makers we will be able to set 4 demos. This is when the DM agrees to a 10–15 minute demo of our product with one of our product specialist. We get them to agree to a specific time and date and we send these 4 people calendar invites and follow up confirmations. It is important to try and get them to agree to a time within the next couple of days. The sooner the demo, the higher the percentage chance they show up.

Follow our daily vlog for more sales insight.

3 Demos Show

Now of those 4 demos that got set, not all of them are going to show up. It is important to follow up with the person you set the demo with to confirm they are coming.

1 Sale

Right now our close-rate is about 30–35%. That’s generally considered about average for a SaaS company today. So of those 3 demos we perform, we will make 1 sale.

+$200 MRR

Our average revenue per sale is about $200. So that 1 sale leads to an additional $200 of new MRR. So that’s $200 new MRR per day from 100 dials.

The Monthly Funnel

There are roughly 20 working days in a month. Simply by multiplying all of the figures above by 20 you get this result: 2000 dials > 280 Decision makers > 80 Demos set > 60 Demos show > 20 Sales made > $4,000 new MRR each month. So with this model we will bring in $4,000 per month of new MRR with 1 SDR making 100 dials a day.

Making sales at PhoneWagon in our daily vlog!

Pay Back Period

The next thing you’ll want to figure out is what your pay back period looks like.

Math

Let’s start. The above model requires 2 different sales people; 1 SDR and 1 AE (account executive). So let’s assume that fully-baked we are paying out $150k in combined salary to the two sales reps it took to acquire that $4k in new MRR.

It is important to try and get that pay back period as short as possible. A smaller pay back period frees up cash to invest in other areas of the business and ultimately allows your company to grow faster.

Levers

So how do you get that pay back period shorter? Well you optimize your funnel. Some levers could be; increasing your average MRR per sale, improving your close-rate on demos or upping the amount of demos you set. Optimizing one part of the funnel could have a drastic effect on your pay back period.

Want to see more about our company?

Check out our daily Vlog as we go through Techstars NYC!! Click the Gif!

Click to check out our daily vlog building PhoneWagon.

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