Reality of Sales Closed Won rates

Hi,

My name is Nadir Mansor and i have been a sales professional within the SaaS space for the past 5+ years working across different sectors mostly in startup environment and with different buyer personas both as a SDR and AE (SME & Enterprise).

On avg the top line conversion rate (this is your initial outreach to any prospect to schedule a call and potentially create an opportunity) sits anywhere between 0% and 5%. Bottom line conversion rate on the other hand (Anything that progresses from opportunity created all the way to deal closed won) the ideal expected avg by management is 20%-30% which fits the overall SaaS market average. Anything above that is considered excellent conversion for an account executive (closer).

The rule of 10 says that for any startup to prove product market fit they need to acquire their first 10 cuatomers. These early adopters may then pave the way to a better product lead development strategy. This is to also say that the first 10 customers and they way you sold them onto your product will not necessarily be the same approach as you aspire to grow and acquire more customers.

Questions I have learned to ask to better forecast sales numbers are:

1. How many touch points are required to land the first meeting in the schedule with a prospect? (usually many SDRs/BDRs and founders take an omni channel strategy of cold calls, emails and social selling). this conversion ratio in particular really varries as some may have a 250 touch points to get a meeting scheduled vs others that require only 10-20 interactions per meeting scheduled. This is only to schedule the meeting, hence not yet a meeting deemed as Opportunity.
2. What is expected sales life cycle? (this usually falls into 2 categories transactional offering usually anything below 1--3 months with a ticket price size between $1k to $30k ARR and Enterprise offering which is usally 3+ month and above sametime even year long sales lifecycle if not longer).
3. What is the average contract/order value? this is important so as to sell in line with the competition's pricing and thus promote a fair price to value ratio for buyers to consider. It is also improtant for forecasting quarterly and annual revenue as most management have a 3.5x pipeline of open opportunities to close available for close. Some have a much higher one that can go into 5 times and above.

Sales is indeed an art and a science. your forecass will never be perfect but having an understanding of historical performence and tracking the above various metrics, will not only allow you to assess the weak points and improve those as well as the strong point and maximize those. Thus ultimately improving on the conversation rates for more wins for your business and keeping a cleaner. and healthier pipleine of opportunites forecasted to close.

Thank you for reading this far. Hope this helps. Wish you the best for this year.