This is the magic number for SaaS Sales and Marketing teams.
Why? SaaS money is compounded from the time you sign and take payment till when they churn… the magic number to hit your revenue goals year on year.
The Magic Number
The magic number is 78
Now remember the opposite effect of this works if the deals are not won in the earlier months… it makes the revenue target a little harder to hit…
Depending on your reporting periods depends on when you will need to ramp up the sales team.
Say you have a business target of 1,000,000 (a nice round million) for they year in revenue growth.
1,000,000 / 78 = 12,820 – rounded up to 13,000
Let say you sell a product that is 100 bucks a user… and your average users per account is 5 – that’s 500 per account.
13,000 / 500 is = 26 sales every single month to make your magic 1 mill in ARR.
So ideally marketing need to do some work to get the leads in the door, but how many?
What is the sales conversion rate from lead to sale? Lets say 20%
100 x 26 (number of sales) = 2600
2600 / 20 (Sales win % conversion rate) = 130
So the marketing team need to generate 130 SQLs per month for the sales guys and girls to hit their respective targets.
And here is a handy calculator: www.skillsyouneed.com/num/percent-calculators.html
If you are converting traffic at 2% on your website landing pages then you’ll need a fair amount of traffic that’s ready to buy hitting your website.
100 x 130 (SQLs) = 13,000
13,000 / 2 (2 percent landing page conversion traffic, not login traffic) = 6,500 visits per month to get this many SQLs for the sales team.