Anyone who leads a sales organisation knows how frustrating predicting revenue is and how that can lead to scrambles end of each quarter rolling out unreasonable price discount based offers to make the ends meet.
Jason Lemkin talks how monthly sales figures are about the ‘past’ and pipelines are generally useless in terms of predicting future sales. It is heavily dependent on the Sales reps doing their jobs right. Actual sales numbers are always lagging indicators.
What makes sense however, are the ‘Qualified Lead Velocity Rate’ or LVR. He recommends (with a generous example from Echo Sign of which he was the CEO til it was acquired) setting the LVR growth 10-20% above the MRR growth desired. Done right and with a consistent Sales team – you will hit the revenue growth.
Why doesn’t more people do it? Are you using LVR as a measure to predict revenue?
Where I learnt it #239
Why Lead Velocity Rate Is The Most Important Metric in SaaS https://www.saastr.com/why-lead-velocity-rate-lvr-is-the-most-important-metric-in-saas/