Well, it’s that time of the quarter when you know that something is wrong. You woke up with a feeling of dread. But you decide to ignore it. You continue to make your morning coffee. You take your first sip and it doesn’t taste right—like sunshine and Christmas.
While wondering what is going on with today, you open your emails and well, lo and behold, you and your teams are not hitting their numbers—AGAIN!
Does this ring a bell?. Well, then this is the blog for you. Let’s dive in.
What should you do when you’re not hitting your numbers?
If every month was a green month, then life as a sales and marketing professional would be a breeze. But sadly, that’s not how sales always works. A variety of variables can be influencing it, such as:
- Decrease in the number of leads generated by marketing,
- Reduced number of meetings scheduled by sales development representatives,
- High churn rates, and other reasons
Therefore, if you want to keep up with your targets month after month, then you cannot rely on guesswork and intuition. You need to look at facts and figures. This is where your data is going to save you.
#1: Audit your funnel
Let’s consider a scenario we recently faced at Slintel. We rely on our superbly competent inbound marketing engine to generate leads. However, like all well-oiled engines, there comes a time when a performance dip occurs.
A few quarters ago, we experienced a situation where our sales and marketing teams were not able to hit their respective targets. When we encountered this situation, it was time for us to be brutally honest with ourselves and our team.
Without wasting any time, we set up a meeting to discuss with the sales and marketing teams respectively on what is working and what is not working for them. Communication is the best way to identify what the issues are.
The Marketing POV:
The team first started by checking to see if there were any problems in our marketing funnel. The following questions were asked:
- Are we generating enough lead volume when compared to the quarter where we were hitting our numbers?
- What number of leads that we generated got converted into opportunities?
- Were there any leads that are getting stuck at a particular stage of the funnel?
- Is there any dip in our conversion rates?
In the process, we were able to identify that there was a low influx of top-level leads generated. But the good news was that our conversion rates were still stable, i.e., the leads were getting converted from MQLs to opportunity, and so on.
Embracing this small win, we decided to identify ways on how to rectify the low lead volume problem. It was time to look at the campaigns we were running.
The marketing team worked on:
- Developing and starting new campaigns
- Increased budgets for existing campaigns
- Developing campaigns for users who previously had spoken to us but did not buy
- Initiating a campaign for users who previously signed up for a demo but did not show up for it
In the process of ensuring tweaks were made to increase the flow of leads, we also identified that there were issues that occurred at the other end—sales. It was time to check in with them to see if the leads generated were handled by the right people.
The Sales POV:
While our marketing team was on their journey to identify what was the cause for not hitting their targets, the sales team embarked on their own journey to figure out where the leakage was occurring.
Let’s take a look at the table below which looks at the hypothetical data of month-on-month analysis for both inbound sales.
This table shows the complete volume of inbound leads generated for each month (Aug, Sept and Oct). You can see that there is a fluctuation in the number of inbound leads. You can also see that the number of MQLs and the number of meetings completed also dropped.
Just by looking at this we know intuitively that there has been a drop. But what we need to identify is the drop in percentage i.e., by what percentage are the numbers dropping and who needs to be accountable for them. Let’s take a look at the image below—
There is a 15.96% dip in the number of MQLs and ~25% dip in the number of meetings completed, which was even lower than expected. Apart from this, two other metrics that need to be accounted for are sales accepted opportunity (SAO; for SDRs) and sales qualified opportunities (SQO; for AEs).
Before we move on, let’s understand what the acronyms SAO and SQO stand for.
Sales Accepted Opportunity or SAO is a prospective customer that has been vetted both by your sales (SDRs) and marketing teams. This customer is the right fit—they have shown their intent to buy your product or service and have an increased likelihood of closing.
Sales Qualified Opportunity or SQO is when the customer with a macro-level fit moves further down the sales funnel. This is when the customer and your account executives hash out all the fine details to close the deal.
Getting a hold of the data for SAO and SQO is the best way to identify if the number of opportunities getting converted to closure is increasing or decreasing.
Example: In the image above, you can see that in October, the number of SAO needed to close 22 deals was 193 while in September, it was 218 to close 21 deals. From this, you know that your SDRs are using a lesser number of SAO to close a higher number of deals. Similarly for SQO, you need to identify what the numbers look like to see how your account executives are doing.
The same can be done for outbound leads as well.
Finally, when you have all your numbers for the last few months in place to analyze, it is time to see which aspects of these numbers can be improved and who on your sales team is/can be responsible for it.
Pro Tip: Don’t wait for you and your team to stop hitting your numbers to do the aforementioned analysis and self regulation. In fact, do it even when you are hitting your numbers. Putting this kind of analysis into practice on a daily and monthly basis will help you track your numbers, help your team feel great about their performance and also help you to predict dips and leakages in the upcoming months.
The next type of analysis the sales team did was to understand closed-lost deals and why we lost them. Some of the questions to include in this type of analysis are listed below:
- Is it because of a particular product feature that was not released. Or is it lacking a product feature that the lead is looking for?
- Are your AEs losing a specific kind of deals, for e.g., one of your AEs losing way too many deals as opposed to other AEs?
- Was the deal lost because of our data quality?
Once all this has been identified, the next step is to schedule calls with the team to discuss what can be done to improve the numbers and generate better revenue.
Ideally, this should be a continuous practice during the entire process of chasing your numbers. With all the advancement B2B SaaS has made, if your teams continue to remain siloed, then mark my words, the problem lies with your modus operandi.
Each team in your business, be it sales, marketing, or customer success, collects massive amounts of data on a daily basis. The best way to look at all this data is to see it all in one place. By getting a comprehensive view of your data, you can quickly analyze what is going wrong, where the cracks are, and how to quickly fix all of it.
For this, you need your teams to be communicating with each other on a constant basis. As cumbersome as it may be, setting up recurring weekly and monthly meetings to look at all the numbers, to address what fixes can be made, what leakages can be found early and plugged will keep you floating.
When doing this, ensure that you are all working towards the same goal—revenue. This way all your teams are aligned and nobody is pointing fingers when things go wrong.
Another type of analysis the sales and marketing team does to set up the targets for the year is historical analysis. This is a method used to identify what your current target numbers should be to hit a certain $ figure in revenue.
Set up a dashboard with which you can perform a historical analysis of your past performance and the targets previously set. Look into the numbers of your last 18 months, if possible, to get an idea of what your current targets should look like.
Based on this historical analysis, set your targets and goals. This is applicable for all marketing-driven conversions.
Example: We want to identify how many leads a single AE needs. For this, let’s consider that the monthly quota for a single AE is $40,000. From this, we reverse-engineer to find out:
- How many opportunities did they need to hit this target in the last 18 months?
- What is the number of demos they need to complete?
- Finally, how many leads do they need from marketing to achieve their quota for the month?
After identifying how many leads a single AE needs, we then multiply that number with the number of AEs in the organization. This will be the number of leads that marketing needs to generate to hit the company goal of ‘X dollars’.
Based on the total revenue goal that the sales team needs to generate for the year, the team divides the leads accordingly within the team. One of the reasons we employ historical analysis is because we are still a small team.
Another way to hit the target revenue is to ensure that you bring in leads that have higher ACV. This will require your sales team to close a few deals to hit the ‘X dollar’ revenue mark.
On the contrary, large established companies perform prospective analyses since they have experts on the team that are solely responsible for this.
Once you have identified where the leakage is happening, the next step is to train your sales and marketing personnel in the areas they lack. However, be empathetic while doing so. Youcannot hit your team goals without a team that is motivated and content.
Training provides multiple advantages and is pivotal in ensuring your team can strive towards success. It instills confidence in your employees and also provides them with different opportunities to grow by outperforming their sales targets.
Don’t just take my word for it—this study shows that for every $1 invested in training, a company receives $4.53 in return. That’s a 353% ROI. Therefore, focus on training even when you are hitting your numbers.
Now that we have listed a few things to do, let’s dive in and see what you should not be doing when you are not hitting your numbers.
#5: Avoid Finger-pointing
A situation where your sales and marketing teams are not hitting their targets is not something that a business aspires for. However, the reality is that this situation does occur.
When faced with this situation, avoid pointing fingers. While we can harp about this all we want, we all know that’s easier said than done.
If you’re experiencing this at your organization, here are some things for you to keep in mind that can help your teams align:
- Be empathetic. Put yourself in each other’s shoes and remember that you’re both here to help the company scale and succeed, and you need to work with each other to make this happen.
- Assess, don’t accuse. Instead of blaming each other when a month goes poorly, or shifting the blame on the other team in discussions with your CRO/CEO, try to sit down together to understand what went wrong, and how you can collectively avoid this in the future. Remember, we all have good months and bad months.
- Keep each other in the loop. If you’re not on track to hit the targets in a certain month, or if you foresee that the next month might not be as good as this one, set the expectations with the other team well in advance. This helps avoid any unpleasant surprises that might cause squabbles between the teams.
Always say yes to working in tandem with your team as opposed to embracing drama and chaos. The best way to solve for when you are not hitting your numbers is by staying calm, analyzing your numbers, training your teams to take action to fix the leakage, and move forward. Simple as that.