Connect activities to Revenue with the Sales Funnel
How do I find each of these ratios for myself?
We have four important numbers on the righthand side of the sales funnel. If you don’t know these off the top of your head, that’s fine! We’ll show you below how to calculate each of them.
Keep in mind, if you’re using this funnel in an aspirational way, you can use any numbers you’d like in order to see whether your estimates will achieve the goals you’re setting.
Activities per meeting
Number of Activities ÷ Number of Meetings
In order to calculate activities per meeting you’ll first need to determine what will qualify as an activity. Start with the number of calls and emails over a certain period of time (say, the past 90 days). You can always modify it from there. Then, you’ll need to find the number of meetings in the same time period.
Once you have both of those numbers, divide the number of activies by the number of meetings. This should give you a number above 1. If it’s below 1 you probably did the wrong numerator/denominator (sorry, I know you weren’t expecting to go back to high school math here).
Number of Qualified Opportunities ÷ Number of Meetings
Good news, you already have half this equation already! Now, you’ll find the number of qualified opportunities that resulted from those meetings. There are a few different potential nuances to this number. If you want to get fancy, you can count only the closed (both won and lost) opportunities in both of these numbers. But if you want to go simple, just divide the number of qualified opportunities by the number of meetings. This should be a number between 0 and 1, which is your percentage. So if you had 68 qualified opps and 92 meetings, that would be .739 or 73.9%.
Qualified Close Rate
Number of Closed Won Deals ÷ Number of Qualified Opportunities
Notice a pattern here? Now we want to find the number of deals you won during that same period in order to find your qualified close rate. Take that number and divide it by the number of qualified opps you got above. Bingo, there’s your qualified close rate! In our example, if you had 30 closed won opps from your 68 qualified, you would have a .441 – or 44.1% – qualified close rate.
Revenue ÷ Number of Closed Won Deals
Okay, so for ACV, or average contract value, you will want to take the amount of revenue generated by those closed contracts and divide it by the number of closed deals. As an example, say you closed $585,000 of revenue from your 30 deals. That would mean your ACV is $19,500. Boom, just like that you have all the numbers you need to get going!