Sales Growth Trajectory for SaaS Founder-led Sales

“Without continual growth and progress, such words as improvement, achievement,

and success has no meaning.”
Benjamin Franklin

LET'S DEFINE!

Sales Growth Trajectory is a metric that measures your sales team’s ability to increase revenue over a fixed period.

There’s a risk of being overtaken by your competitors if we will not include revenue growth when measuring your sales growth.

This metric will be your strategic indicator when making wise decisions, formulas, and business strategies as a founder.

Your sales growth metrics should be parallel to your revenue and profits growth, hence reflecting performance not just of the sales team but also your company’s core decision-makers.

Conversely, high percentage growth in sales is cause for optimism for all stakeholders such as executives, the board of directors, and shareholders.

Benefits of Calculating and Analyzing Sales Growth Trajectory:

To understand your periodic financial performance.

To learn whether sales between two periods and, if so, by how much.

To adjust your future sales strategy if the trajectory has stagnated over time.

To see your profitability, hence being able to consider to shareholders' dividends or your upcoming sales hire/s.

To understand the economy's state. A high percentage of sales growth can sign that the consumers in the economy are confident.

Steps to Calculate and Stages of Implementing Data:

STEP 1: Gathering information.

Collect and register sales data in quantitative and value terms at specific time intervals (at least once a month).

STEP 2: Organize

Organize sales data in the order in the periods compared (e.g., monthly, bimonthly, seasonal, annual data).

STEP 3: Compare

Compare data accordingly in corresponding time intervals.

Example:
Month: January – April | Introductory period of analysis.

Therefore, we need to compare them with previous years’ corresponding period.

There’s also seasonality among different economic sectors; comparing month-to-month only provides a false sales dynamic image. Hence, we can see the importance of creating long-term sales trends or including the sales in the previous year when calculating the trajectory.

Another reason is when a business sells services with different margins, prices, and costs, any changes in your product/services can affect the results, which is worth understanding.

UNDERSTAND > DIAGNOSE > RECALIBRATE > COLLABORATE > TARGET > BULLSEYE!

To start:

Firstly, subtract the prior period’s net sales from that of the current period. Then you should divide the result (of the first step) by the net sales of the preceding relevant period. Lastly, multiply the result by 100 to develop a percentage of your sales growth trajectory.

FORMULA:

SALES GROWTH TRAJECTORY = (NET SALES FOR THE CURRENT PERIOD – NET SALES FOR THE PRIOR PERIOD)/ NET SALES FOR THE PRIOR PERIOD * 100

What's a Good Sales Growth Rate?

Being the founder and through your stakeholders, determine a reasonable growth rate for your business as it can vary from year to year. It will be best to track the trajectory alongside the history you have been operating, the economy, and your competitor’s growth.

> HOW TO ONBOARD YOUR FIRST SALES HIRE.

"I just wanted to drop you a note to say thank you, for sharing your templates with me. I have 2 new Enterprise Sales Managers (AE’s) staring on Monday, and I have used them to great effect. The playbook will be a living breathing document that will constantly evolve. The template and the headings that you shared, provided a great starting point!"