With half of the selling days behind us in the year, it’s time to do a quick checkup and get a gauge on whether you need to rethink your Execution or troubleshoot your SaaS Sales Strategy. This is primarily about the “New Business” sales rather than Customer Success and existing business renewals or upsells & cross-sells – and of course many of the below early indicators are equally applicable in CS as well. Here are some things that may give you early indicators that you need to consider adjustments:
- Your “New Business” sales team has missed their quota target for 2 consecutive quarters (or 6 months, as many B2B SaaS companies have monthly MRR targets).
- Your team’s % Win Rate has dropped substantially over the past few quarters.
- Your Sales Cycle has been increasing.
- Your average sale (ASP) or aka Average Selling Price as used as a traditional sales term in software (and for the SaaS gurus, you this should be the same as the average Annual Contact Value or ACV from new business, or an annual Average Revenue per Account or ARPA.
- Your Sales Development Reps (SDRs) are not hitting their Meetings Completed or Opps targets. And Their “Effectiveness Rate” is low – the conversion of their Sales activity : Meetings (i.e. frequently referred to as “Demos” in SaaS) and especially their Meetings Completed : Opportunities is low.
- Wide band of Productivity per Rep (PPR) for your Account Execs is varying significantly from one sales rep to another and there is no consistency.
- Average Quota Attainment is declining from month to month or quarter to quarter – the percent of you organization attaining quota is low.
- You don’t have enough reps on your Prospecting team to help schedule first meetings for your Account Execs (i.e. as we sometimes refer to as “closers” in sales).
- You don’t have enough capacity or “quota coverage” – i.e. not enough sales reps (specifically Account Execs who manage Opportunities and close deals) to cover the quota target based on the quota per rep in your sales model.
- You don’t have enough or the quality of Sales Managers on your team that you need to succeed.
- Your pipeline is always behind in terms of the number of Opportunities created or the number of Opportunities per your sales reps to help them hit their quota (this is based on your team’s % Win Rate)
- The product team is not aligned with sales or the product is lagging on features or usability or in other ways and is not differentiated enough in the market.
- Marketing is not generating enough qualified leads to help you hit the Pipeline goals.
- The CEO doesn’t fully understand all the challenges experienced in sales.
- You do some basic competitive research and your back of the envelope estimates suggest that the sales of key competitors in your market segment are growing faster.
- You are seeing signals from your prospects that they are now buying differently, perhaps requesting things that they have not done previously.
At this point, it’s important to understand if your issues stem from your Sales Strategy or from your sales force’s execution. I’ll leave that for another article and another day.
What else? What are some more thoughts on what else to look for that is easy enough to spot and is applicable to the vast majority of B2B SaaS?