B2B SaaS | Moving The Needle

In a typical B2B SaaS setup, the marketing is responsible for generating the pipeline, and the ‘sales’ is to close the deals. When it comes to the pipeline, there are multiple configurations specific to the company. The most popular definition considers only the ‘opportunities’ aka SQLs (Sales Qualified Leads) as the sales pipeline, a subset of the funnel – the MQL stack (Marketing Qualified Leads). Of the MQL bucket, those that meet the sales defined criteria are handed over to the sales to close. This helps sales keep its unwavering focus on closing the deals while the product marketing functions cook up interest and vet out flaky ones.

In popular setups, the lead qualification is done by the SDR (Sales Development Reps) – a type of inside sales function that calls out to prospects with a set of leading questions to qualify the leads and help with segregation (and or any segmentation for marketing to leverage).?

Moving the Needle

It’s simple, to move the needle, the sales need to close more deals. So, let’s say, that your sales teams' avg. close rate is 20%, so sales will win 2 out of every 10 opportunities. As you see, by increasing the SQLs by 10 the sales can bring home 2 more deals!

So clearly, the marketing function's responsibility towards the funnel does not stop at MQLs, the product marketing function now needs to ensure higher MQL to SQL conversion on a given funnel to move the needle! There are multiple instruments to do this – specific content formats and defined engagement channels. But the key metric is moving the needle!?

Here are some actionable hacks:

#1 SQL Conversion Rates by channel cohort

It is the number of SQLs generated per 100 MQLs for the given period. To optimize, break down the MQL stack by source and channel and measure the individual SQL conversion rates. It’s now easy to understand which channels (or sources) bring in more opportunity compared to the others. From a funnel point of view, the demand-gen function can now re-align its efforts and focus on channels to simply scale those that bring in the most SQLs.?

#2 Pipeline Dollar Value (PDV) by size cohort

It is a common practice to measure PDV by multiplying the number of opportunities times avg. deal size. Instead, create a pipeline cohort based on size (say small, mid, and big) and measure the dollar value. Next, map/find each cohort's – source, SQL conversion rate, close rate, sales cycle.,

Now moving the needle means ‘significant’ impact. So, with this insight (from the above cohort mapping exercise), the product marketing function can choose its optimization battles – say a lot of small deals, some of the mid deals, or a just handful of the big ones and align the tactics accordingly.

Bonus: The exercise above goes beyond just funnel optimization. This can help drive the business decisions, example: you now know the dollar value of the pipeline against each size, now compare this against close rates and sales rep’s quota, instantly you’ll not just know when to hire a new sales guy, and also, who you exactly need – an inside sales guy or an enterprise account manager!

#3 The Selling Process

Another little process hack that works for most B2b SaaS is re-aligning the sales process according to the funnel. The intention is to get automate closing all the small ones while the sales team only focuses on deals that move the needle. With this approach, the SDR or the inside sales can focus on closing small deals while the automation works towards closing micro deals (tending to zero-touch). This is especially important, especially for start-ups, even more so if you bootstrapped.?

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