Sales planning triangulation for SaaS.

Try saying that five times fast!

I’ve worked with a lot of SaaS companies in my time, and generally there’s a huge amount of focus put on forecasting sales (as there should be) - and of course revenue follows, but the revenue recognition is usually relatively straightforward.

What has often surprised me is how few organisations are combining the multiple data sources they already have to identify any problems, which I refer to as sales planning triangulation.

Because almost every SaaS business has four areas outputting sales forecast information:

1. Of course, everyone has top down targets; someone up top has said “We will sell £XXXX”, and the business has to deliver that.

2. The second port of call is often the CRM for pipeline deals. The data here is useful, but it normally has a useful horizon for net new that is quite short, for most it’s a quarter (if that). I often joke that if we just look at the CRM data we’ll all be rich on the last day of the financial year - because that’s where reps put close dates that they don’t know what else to do with.

3. Then many businesses want to look at sales capacity, ie what can we expect to sell with the sales reps we have and will hire - but this is often seen as too difficult. The tricky part of course is the new hires and modelling a ramping up period - very prone to horrible formula breakages as you roll forward in pure Excel, but actually pretty simple to do in Vena once you’ve modelled the workforce (which you will do anyway).

4. The last one that I think gets neglected most is looping in marketing, and modelling a marketing funnel. Most businesses have a good idea of how many marketing qualified leads (MQLs) they’ll get from a given class of activity, then conversion rates through sales qualified leads/SQLs, sales qualified opportunities/SQOs and of course ultimately deals, which we can then multiply by our known ACV.

Take these all together and you identify any gaps; do we need to revise our hiring cadence in the sales team, or move around marketing activity?

The absolute best part of this process, though, is it’s a great example of where finance can quickly and easily provide genuine strategic input. The business wants £XXXX of sales? Well, here’s a clear illustration of what might stop us getting there - and a clear path to resolving those issues and achieving our targets.

Many SaaS businesses I’ve spoken with have wanted to do this sort of planning, but have been held back by a spreadsheet based process. Northexis has built a demonstration illustrating how easy this approach is in Vena, which you can see in five minutes below (be sure to click full screen on the bottom right!).

And if you’d like to see more of how Vena can help SaaS companies plan, drop us a line.