A simple funnel planning model

funnelI’ve been talking to many early stage Enterprise SaaS companies recently and talked to them about their sales and marketing funnel. For many B2B SaaS companies it takes 3-12 months, depending on their ACV and other factors, to convert a lead to a paying customer.

For many SaaS companies, conversion rates change depending on the age of the prospect at every stage in the funnel. For example, they may close only 5% of their opportunities the same month they were created, but close an additional 10% the following month and 5% additional conversions 2 months after the opportunity is created.

The same applies to other stages in the funnel, for example:

Funnel Conversion over Time

With such variable conversion rates, how do you know how many leads you need marketing to create, how many new MQLs, SQLs and Opportunities you need in your pipeline such that you will achieve your business goals?

I took a stab at creating a simple model allowing you to calculate just that based on your new MRR goals and your conversion rates at every stage in the funnel. The model is available as an Excel File.

I hope you’ll find this useful and would appreciate your comments and feedback.


 

Update (June 22, 2014): I received some comments from @alonnir and updated the model to be more accurate.

 

One thought on “A simple funnel planning model

  1. Thanks for sharing. I like the “working backwards” approach because it let’s you to not focus on coming up with assumptions as the first step (corporate goals are a lot easier to define than abstract assumptions, which can lead to excessive tweaking to make the right story “fit”, at any cost.

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