Building & tracking your sales funnel

Understanding and monitoring conversion metrics in the sales funnel is an often-overlooked task in many early-stage firms that we come across. The sales and marketing funnel still receives relatively little attention, despite the fact that the majority of entrepreneurs are already familiar with important metrics like MRR, LTV, and CAC.

An underrated point here is that a fast sales cycle is a competitive advantage. For one thing, sales cycles are typically longer when dealing with things like B2B products or services because it takes time to create a relationship with the customer and understand their needs. So, if you can shorten your sales cycle by 30%, you'll increase revenue by 30%!

Tomaz Tunguz provides a good funnel tracking mechanism here with a sales sandwich.

Note that every startup defines will have its own way of categorizing leads, typically in the following manner: visitor/ demo done/ trial accessed/ proposal sent. These are classified into stages as per the above funnel. The estimated sales dollar value of accounts at each stage is divided by the planned quota (target) for the month to understand. 

Tracking the sales sandwich over a period of time enables a sales leader to understand three things:

• Likelihood of achieving targets
• Tracking conversion ratios across stages
• Forecasting and managing ‘Top-of-funnel’ for the planned growth

A report over time will likely look like this:

This First Page Sage blog provides a great set of B2B SaaS Funnel Conversion Benchmarks by Target Audience Company Size

In our experience, it is clear that a company in control of its sales funnel and conversion metrics can outperform other companies. Here at Malpani Ventures, we firmly believe that your success starts with a good understanding of your customers' needs and wants. How well you truly understand them can be determined with the aid of a sales and marketing funnel.

You can more effectively plan your sales and marketing efforts with a well-considered sales conversion tracker, and when you do this successfully, you can sell well and sell quickly! Contrarily, businesses that lack control over their sales funnel (or are unaware of what's happening) frequently err when it comes to product development and marketing tactics, which causes them to lose clients.

Have any ideas for a sales funnel tracker? Do share them with us at pitch@malpaniventures.com