The Top Three Questions Asked by SaaS Sales Leaders and Executives
May 10, 2021We talk to B2B SaaS companies sales leaders and executives all day long. We commonly ask them what their top priorities are for their company or what are the key questions they ask themselves every day?
Inevitably their answers can all be boiled down to the three key questions below:
- Do I have enough pipe?
- Where are we going to end up?
- Do I have the right people?
While not scientific, these anecdotal answers are probably not a big surprise to sales leaders or executives reading this.
But, while asking the right questions is essential, the question is only part of the solution. The answer to the question is the real key to success as are the methods and tools used to acquire the answers.
Let’s go through each of the questions listed above and take a closer look:
Do I Have Enough Pipe?
Fundamentally, sales leaders and companies are measured by the success of their sales. Leaders are hired and fired based on their performance and this is ultimately what drives the valuations and growth of the company. So it makes sense that leaders are primarily interested in generating leads and making sure that they have enough pipeline coverage to hit their targets.
Pipeline Coverage is a calculation that varies from company to company and can be sliced innumerable ways. Commonly, the right Pipeline Coverage depends on your Close Ratio and Win Rates. If your sales reps close 25% of all Opportunities generated in a quarter – then you typically need a pipeline that is 4x your Sales Target in order to hit your number. For example, if your quarterly sales target is 20 million in Closed Won Net New business, then your Pipeline Coverage needs to be at least 100 million in order for you to achieve your 20 million sales target (assuming you close 1 out of 4 opportunities generated).
This is an oversimplification since there are nuances around when the Opportunities are generated, length of Sales Cycles, etc. but the gist of the calculation is where your efforts need to be focused. We are always surprised at how fuzzy this simple metric is when we talk to sales leaders. This is mostly a result of unreliable reporting that is built on bad data that is incomplete or simply not there. In these cases, sales leaders end up guessing the Win Rates or going with their gut when it comes to estimating what they believe their Pipeline Coverage should be.
Understanding the behaviours to get to the right Pipeline Coverage is the REAL solution. If the Pipeline Coverage target is X then you should know exactly how many meetings are required to create a new Opportunity. Your revenue data analytics should be able to tell you what has historically worked in the past. By tracking your activities closer – your sales managers will know exactly how many calls to make in order to book a meeting and then how many meetings and demos it takes to generate an Opportunity (generate new pipeline).
The key to Pipeline Coverage is to understand the activities required to generate more opportunities (pipeline).
Where Are We Going To End Up?
Forecasting is the lifeblood of any sales organization. Understanding where the forecast stands for the given period is where the rubber meets with the road for most sales leaders. For the most part, they rely on Salesforce and revenue operations teams to generate reports for them that will forecast sales and revenue. But oftentimes the forecast process is filled with hunches, guts and feelings that generate unreliable forecasts.
Revenue intelligence platforms like SalesDirector.ai, Clari or Aviso all have different tools to help sales leaders manage their forecasts. The ability to manage team, territory, regional and product roll-ups are important – but even more important is whether or not the forecast is informed by the behaviour and activity of both the Seller and the Buyer.
There are innumerable aspects of an Opportunity that determine whether or not it is likely to close. The various factors to consider in a forecast include Company Win Rate, Rep Win Rate, Cycle Time, Stage, Company Size, Industry, Time of Year, Opportunity Stage, etc. Depending on the quality of your CRM data, you might be able to extract these details and have an informed forecast. But what is missing from the above list is Buyer and Seller activity (which is rarely considered in a forecast).
The level of engagement (# of meetings, emails, calls) should be informing the forecast as should an identification of WHO the reps are talking to (and their engagement levels!). Understanding the activity associated with an Opportunity will tell you if the rep is engaged with an economic buyer; whether or not they are engaged in a single-threaded relationship or if they are engaged in multi-threaded relationships across the company; the time and frequency of the meetings and email responses; and the sentiment of those emails and meetings.
Having an in-depth understanding of the activities associated with the Opportunities will give you an informed forecast that will give you a much more accurate picture of “where you will end up this quarter.”
Do I Have The Right People?
In addition to pipeline and forecasting – you want to make sure that your reps are doing the right things at the right time – and if they are not – then you need to train them or manage them out of the organization. Having a better understanding of their daily activities and how those activities relate to their pipeline, win rates and performance is key.
There is an ongoing debate among sales leaders about whether great salespeople are born or trained. The reality is that both “innately good” and “well trained” sales reps will always be part of your team – so establish systems that support both types of reps. The best way to do this is to rely on a revenue intelligence platform that integrates with Salesforce to track their emails, meetings, calls and activities as they relate to their Opportunities.
By understanding the behaviours of all of your reps you will be able to determine if you have the right people and if they are doing the right things. Solely evaluating your reps based on their likability, their gift of gab or even their product knowledge might be the wrong things to consider.
What matters is whether or not they are emulating the behaviours that create more pipeline, move the deals forward or increase win rates. If these are your top priorities then you will look at the number of touches required to generate a demo; the average number of meetings to close a deal; the minimum number of people engaged at the prospect, the minimum level of engagement from the Seller AND the Buyer, and measuring the time spent during each stage of the sales cycle.
Only by logging and monitoring the individual sales activities will you be able to understand which are the right behaviours to optimize your business. Relying on the sales reps to manually enter all of the contacts and emails and meetings that they hold is not reliable since they are often too busy, or too lazy, to enter all of the data into the CRM. To solve this problem, look to revenue intelligence platforms like SalesDirector.ai that can automatically log this information into the CRM without any sales rep intervention.
Once these three questions are asked – you can embark on the revenue operations journey to highlight the required behaviours that will inform your pipeline, your forecast and your sales rep performance. Getting to the core of the issue requires that you solve the foundational data issues that you can trust and rely on to extract the information you need.
As a modern sales leader, your ability to scale and grow your team and your business requires that you ask these questions on a regular basis and execute the outputs generated from having trusted activity data in your CRM.
Nicholas Jones is an author, speaker and business visionary. His work has been distributed in high-profile outlets like Forbes, Huffington Post, Fast Company, Huffington Post UK and then some. With a solid comprehension of business methodology, administration advancement and hierarchical change.
