If your company is mid-year and hasn’t hit its stride yet, now is the time to diagnose what’s holding you back. Before you recommit to your H2 plan, make sure your sales and marketing operations are actually set up to win. Here are 10 signs you might be hitting headwinds.
10) Your Gross Retention Rate is lower than 90%
If you’re losing 10% of existing recurring revenue, something is off. Could be expectations setting in the sales process, issues in your project delivery, or how you are managing customer support. At this stage, it’s probably not the product.
9) Your Net Retention Rate is less than 105%
You’ll want net retention closer to 110%. This is the retention rate that includes upsells and cross-sells from your attrition number. Do you have the right sales and marketing programs in place to increase your footprint with customers?
8) Win Rate is lower than 25%
If you’re not scoring a 25% win rate on new customer opportunities, there’s significant room for improvement. Improving this number alone will have the biggest impact on your H2 booking number.
7) Sales Velocity is less than your booking target
If your bookings target is $1M in new ARR, your sales velocity should be $2,800 per day. Miss this and you risk committing to a number you can’t hit — and a double whammy if hiring follows the miss.
6) Sales Magic Number is less than $0.75
For every dollar you invest sales and marketing, you are only getting back $0.75 or less. Its okay for big vendors like Salesforce and HubSpot to outspend on sales, but the rest of us can’t. We should be shooting closer to $1.50 or greater (you can calculate your sales magic number here).
5) Your sellers are complaining about lead volume and quality
You could have a volume and quality issue, but the team shouldn’t be squawking about it. They need to work together to solve the problem and removing barriers to progress. The fastest way to fix this is align targets and compensation to the same metric you are paid on.
4) You have too much dependency on one demand channel
You should have a solid split of demand coming from customer referrals, partner referrals, inbound, outbound, and events.
3) Your sellers need you to close deals
If your sellers are dependent on you to get deals closed, have a look and see if its because you can’t relinquish controls, you have a lack of trust, or they lack the skills. Not saying you should bow out of deals, but to become efficient, you need to graduate your sellers.
2) You’re over-invested in sellers and under-invested in selling units of production
Gone are the days where the spreadsheet math assumes adding one seller bags you an extra million in bookings. The median quota attainment is now 54%. The median quota is now $700K in ARR, not $1M. That means each rep is closing $350K on average. That’s not high enough. The likely reason is that we are all carrying too many underperforming reps. You might be better off with one ruthless killer and supporting them with everything they need which includes data researchers, dedicated marketers, BDR, pre-sales, and marketing spend. That’s a unit of production.
1) You don’t trust your funnel to drive an accurate sales forecast
If you can’t trust the quality of your funnel, it becomes hard to make investment or hiring decisions, and just generally makes you look bad in front of your team and with your investors. Confidence and trust is established when you outperform expectations.
How can TekStack help?
TekStack is built around one idea: B2B tech companies should be growing and making money. Getting there is harder than it sounds, which is why we work alongside your team to make it happen. Here’s what that looks like in practice:
- Sales coaching to identify where your process is breaking down and build in continuous improvement
- Marketing services to make sure you’re driving the right demand through the right channels
- Operational support across outbound prospecting, sales, and customer success, so the behind-the-scenes runs as well as the front-of-house
- A Microsoft-based technology stack that includes marketing automation, outbound sequencing, CRM, customer success, and more
We have decades of experience growing technology companies from pre-revenue to $50M+. And we know how to do it profitably. Interested in a conversation? Let’s Grow →
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