Bottom Up by David Sacks

In a previous post, we defined The SaaS Metrics That Matter to explain the growth, retention, and efficiency metrics that every SaaS company should be tracking. This post expands on that topic by breaking down the most important sales pipeline metrics to add to your reporting stack.

Analyzing sales pipeline is vital for forecasting future growth and learning where your product and GTM process needs to improve, but too often we see startups turn to unreliable heuristics like top-down growth goals or how the sales team “feels” when making key decisions. Below, we detail the key pipeline metrics you should start tracking in order to make data-driven decisions.

For most SaaS companies, pipeline generation is the rate-limiting factor on growth, so this is the most important place to start. 

When a sales rep talks to a lead and determines they are qualified to buy the product, an opportunity is created. If the number of new opportunities is growing month-over-month, growth will be greater than linear, and the company should hire more sales reps. Conversely, if new opportunities are flat there is a demand generation problem, and more resources need to be put into marketing. Breaking down opportunities created by the marketing channel they came from can help focus the business on the highest ROI channels.

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