Sales

Sales Math: Reverse Engineering Your Funnel

Sales Guy

Sales Guy

— 1 min read

What is Sales Math?
Sales math quantifies the relationship between inputs (cold calls, emails) and outputs (closed deals). It answers: How many calls do I need to hit my quota?

  • Key Metric: Conversion rates at each funnel stage.
  • Goal: Predictable revenue by controlling inputs, not just hoping for outputs.

Reverse Engineering: Start at the Finish Line
Begin with your goal and work backward to determine required activities.

Example: Closing 14 Deals/Month

  1. Closing Rate: 40% of proposals → 35 proposals needed.
  2. Proposal Rate: 50% of second meetings → 70 meetings.
  3. Second Meeting Rate: 35% of initial meetings → 200 meetings.
  4. Initial Meeting Rate: 10% of cold calls → 2,000 cold calls.

Result: To close 14 deals, make 2,000 calls.

Why It Works:

  • Focus on actionable metrics (calls made) vs. outcomes (deals closed).
  • Identifies bottlenecks (e.g., low proposal-to-close rates).

Benefits of Sales Math

  1. Predictability: Forecast revenue confidently.
    • Example: Knowing you need 2,000 calls/month eliminates surprises.
  2. Accountability: Track activities, not just results.
  3. Optimization: Improve weak spots (e.g., boost meeting-to-proposal rates).
  4. Data-Driven Decisions: Replace gut feelings with metrics.

5 Steps to Implement Sales Math

  1. Set Clear Goals:
    • Revenue targets → # of deals → average deal size.
  2. Map Your Funnel:
    • Define stages: Cold Call → Initial Meeting → Proposal → Close.
  3. Calculate Conversion Rates:
    • Use historical data.
  4. Work Backward:
    • Use the formula: Required Activity = Goal / (Conversion Rate 1 × Conversion Rate 2 × ...)
  5. Optimize & Adjust:
    • Improve weak conversion points.
    • Use CRM dashboards to track real-time metrics.

Pro Tips for Success

  • Customize Rates: Industry benchmarks vary. A SaaS startup’s 5% close rate ≠ a mature enterprise’s 25%.
  • Leverage CRM: Automate tracking and visualize funnel health.
  • Test & Iterate: Run A/B tests on email subject lines or call scripts to boost conversion rates.

Your Blueprint for Predictable Growth
Sales math isn’t about cold formulas—it’s about understanding your metrics.

By reverse engineering your funnel, you replace guesswork with an action plan.

Keep Crushing!
- Sales Guy

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