Before I started FunnelWise, I was the president of a different SaaS company. My company had been acquired and I was running it as a division of a larger entity. I also had taken over responsibility for another business unit within the parent company that was experiencing challenges. I was focusing a lot of my time and attention on the new business unit, leaving my existing leadership team at my original company mostly on their own to continue to deliver on our aggressive growth goals.
During this time, the sales leadership at that first business was in the process of making organizational changes that were important and would better position the business for future growth. We also knew it was important for the business to continue delivering on our sales goals even in the midst of the organizational realignment. My leadership team had assured me they would remain on track with their sales goals even with the other distractions.
We ended up missing our sales goal by roughly 40 percent that month. This was a huge problem because our parent company was in the process of preparing for an initial public offering. While this business unit represented only a portion of the total revenue of the larger entity, we had ambitious growth goals and there was little margin for error.
I distinctly remember the situation because my boss, the CEO, called me at 8 a.m. the next morning (the day after month end) to ask me what was happening. He told me that my business’ failure to meet goals was damaging the work that other executives were putting forward to facilitate a successful public offering. He told me that I needed to fix it and he needed a clear answer on where the sales revenue for this business unit was going to head over the next several months to ensure the corporate team could confirm that their financial projections were accurate.
His response was reasonable for a CEO in that position and I said, “Yes, I will do whatever it takes.” I told him I would need several days to determine where our revenue was headed in the future. He told me I didn’t have several days but instead gave me 24 hours to provide him with the answer.
After that call, I spent the next 14 hours going through all of our sales and marketing funnel data trying to understand what was happening. I examined how many leads were coming in, who our sales reps were contacting, how many activities they were completing, what opportunities were in the pipeline, how they were converting and how long it was taking. During those 14 hours, I extracted data from our CRM and built a complicated spreadsheet to try to piece it all together into a bigger picture. I was surprised by what I found as I went through all the sales and marketing data, which was that our revenue shortfall was completely predictable. Two months prior, we had started to experience a drop-off in sales activities. As the team focused more on the organizational changes that were happening, they stopped making as many phone calls and sending as many emails to prospects, which was a key revenue driver for that business.
The data showed that a few weeks after the sales activities started to fall, the opportunity creation rate also began to decline. It was not instantaneous and the correlation was not precisely one-to-one, so it was not perfectly clear until you really examined the patterns in the data. For example, it was not as if the team made 10 percent fewer calls one week and, as a result, the opportunities declined by 10 percent. Rather, it took several weeks for the impact to materialize.
When I plotted a trend chart of sales activities and then placed a trend chart for opportunity creation next to it, they had essentially the same shape. The connection was clear. Our closed-won sales showed the same pattern also delayed by a few more weeks. If we had been watching more closely and looking at the data, we would have had two months advance warning of the missed sales goals, and we might have been able to make changes to avoid the disappointing outcome.
Unfortunately, we weren’t watching the way we should have been. My sales leadership was busy coaching their team, hiring new people and talking about organizational changes. My marketing leadership was focused on their lead generation goals, upcoming events and content management. Neither team was looking at the bigger picture. No one was watching, including myself.
Ultimately the situation was recoverable because we were able to turn the momentum around over the next few months, although it resulted in staff departures and other changes that were unpleasant but necessary. Overall it was a painful learning experience, but it taught me a key lesson: Your data always tells a story.
This experience was almost five years ago now, but I remember it clearly. I left my previous company and started FunnelWise in 2014. Today we work with clients across the country to help them understand the stories in their marketing and sales data. In 2016 I wrote a book, “Revenue Funnel Science: How to Optimize Your Marketing and Sales Funnel,” that describes a methodology for how to analyze the stories in your funnel data. Using this approach and our sophisticated software, we have seen stories that address questions such as:
- Are you on track to hit your future revenue goals? This was the story I was missing in my previous business, until I learned it the hard way.
- If you are not on track, where is the problem and what changes do you need to make?
- Which marketing programs and lead sources are driving the best results through your entire revenue funnel?
- Which sales team members are most likely to be under discussion for performance improvement plans six months from now?
- How does your funnel performance compare to other similar companies, and what does this tell you about where you should focus your attention?
Ultimately your marketing and sales data, even if imperfect, can tell a story that serves as an early warning system for future events and guides you as you grow your business.
Uncover the Story in Your Data
Learn how the Revenue Funnel Science methodology can help you find the story in your marketing and sales funnel data by downloading “The Ultimate Guide to Revenue Funnel Science.”