Lesson 15: Leveraging Small Gains vs. Big Wins
This past quarter, I sat down with my leadership team in eager anticipation of Q1 2019. We had learned a tremendous amount in 2018, and it was exciting to think how we might apply those learnings to have a massively successful year.
I’ve found, however, that even seasoned leaders tend to be overly optimistic about the impact they can have on certain performance aspects of their team.
When you have tunnel vision around that which has gone well, you forget the day-to-day challenges, the surprises, the hard work. You can catch yourself living in a fantasy world for a few, brief moments, before you shake the cobwebs and come back to reality.
I found myself in this situation when thinking about the upcoming 2019 year. Could we move win rates from 25% to 35%, or maybe 40%?! Have everyone closing like our top guy? Stick rates from 65% to 75% like our best SDR? Increase our average deal size by 1.5x like a few of our most tenured reps?
We had trained our teams well, had a group of strong performers, and the team was bought in. Surely, this was our year to hit 110% of our goal!
The above scenario sounds amazing. Hell, maybe even a few companies have shown those type of improvements across several different metrics, all at the same time. Kudos to ‘em.
But do you need big wins across the board in SMB SaaS? No. You need to follow your system and make small improvements across the entire sales process which result in big gains. Let’s look at the math in the context of inbound sales:
Ex 1: 10,000 website visits, 10% MQL, 20% SQL, 65% SAL, 25% Commit, 90% Live = 29 live customers
Ex 2: 10,000 website visits, 12% MQL, 22% SQL, 67% SAL, 27% Commit, 92% Live = 44 live customers
Interesting, right? We’ve used a small, 2% improvement across five different stages in the sales cycle and we’ve 1.5x’ed our revenue! No big wins necessary.
I first noticed this when I plotted it on my whiteboard when trying to decide how to best divvy up SDR leads, and the bottom of funnel difference really surprised me when I applied just slight changes across the stages.
Listen, I understand that improving 2% across five different stages is no small feat, but don’t get caught up in how you can make everyone like your top salesperson, or your best SDR, or your best Implementation Manager. SaaS is a game of small wins. Go out there and get them.
P.S. We hit 106% to Q1 goal. Not too shabby.