The Simplest Initial Diagnosis of a PE Portfolio Company’s Sales Performance
If a portfolio company has stalled growth, a simple initial (Phase 1) data-driven diagnosis of plateauing or declining sales at a middle-market PE backed portfolio company begins by breaking sales bookings into its fundamental equation and isolating which inputs have shifted relative to history and benchmarks.
By tracing each variable across sales motions, you can pinpoint where performance is diverging and quantify the exact levers that will restore momentum.
Start with the most basic formula and then decouple and analyze each key component: $ Sales = # Opportunities Closed x % Win Rate & $ Average Deal Size
- The key is to decouple and analyze each input
- Then, compare each input to historical trends and benchmarks to see which variable changed and by how much
- After that, diagnose and segment each input independently by ICP (customer segment), product, region, team, even individual sales reps, and lead or opportunity sources, etc. to isolate where the pattern sits
- For Opportunities that were lost (i.e. lost deals), analyze both pipeline creation and closure discipline to determine whether the issue is top of funnel volume or pipeline health/integrity or relates to funnel stages and conversions
- For $ Average Deal Sizes, compare won deal values to created opportunity size to see whether the issue is pipeline mix, discounting, or deal qualification, etc.
- For % Win Rate, analyze funnel stage conversion, lead source performance, and process compliance to pinpoint qualification or late stage issues
- Extend the same logic across the full sales engine: new logo vs. expansion (for any declines in total revenue, also analyze renewals and churn)
- For expansion sales, assess customer segmentation or assignments, and various customer cohorts to understand the trends
- For renewals and churn, review customer health, adoption patterns, NPS, and customer support metrics to identify trends and risks
- Quantify the impact of each variable across both sales motions (New Customer Acquisition + Expansion Sales to Existing Customers) so the diagnosis is grounded in math
- Finally, tie findings to clear levers in pipeline generation, sales process execution, customer success and support performance, and rep capability improvement