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Customers

Customer count tracks a company’s total end customers. Customers can be broken down into 3 categories: 

  1. Retained customers: active customers who were also active in the previous period
  2. New customers: customers who are active for the first time
  3. Churned customers: customers who discontinued their subscription in a period

In SaaSGrid for a customer to be considered active, they must contribute revenue within the period.

Customers = the count of companies that contributed revenue in a period

While there aren’t defined success thresholds for number of customers, customer count is an important input for metrics like CAC and ACV. Customer count is essentially a proxy for what your ideal customer profile and business strategy are: you can service many SMB customers, try to build a repeatable mid-market sales motion, or go whale hunting for enterprise accounts. Serving smaller customers typically means having smaller ACVs, so it’s important to closely monitor CAC, gross margins, and retention to make sure you can serve high customer volumes profitably. Low touch sales, product-led growth, and automated customer support are common strategies for servicing high customer volumes. On the other end, true enterprise contracts can reach hundreds of thousands or even millions of dollars of annual revenue, justifying large investments in sales and customer success. Either are valid approaches: the main tradeoff is that it can be harder to make the unit economics work with many small customers, which for enterprise sales can lead to lumpy growth.

Growth Rates: Period over Period, Year over Year, CMGR

Settings: Segments, Date Range, Date Aggregation, Revenue Type

Stage Conversion Rate

Stage Conversion Rate is the While Pipeline Value sums the total ARR of active opportunities in pipeline, weighted pipeline is weighted based on the current deal stage. Weighted pipeline value is a more accurate estimate of Closed Won ARR based on the current pipeline value.

How do I calculate pipeline?

Let's assume we have the following list of opportunities currently active in our sales process:

Deal Name

Sales Owner

Stage

ARR

ACME Corp. - New Business
Bugs Bunny
Stage 1
$10,000
Bonner Books - Upsell
Bugs Bunny
Stage 2
$25,000
CHOAM - New Business
Daffy Duck
Stage 2
$15,000
Daedalus Research - Upsell
Daffy Duck
Stage 3
$30,000
Bugs Bunny
Electric Enterprise - New Business
Stage 3
$50,000
$20,000
Fabulous Factories - New Business
Daffy Duck
Closed Lost

The total pipeline for these opportunities is $130,000. Additionally, we can also get pipeline totals for our two sales reps: Bugs Bunny ($85,000) and Daffy Duck ($45,000).

Note that Fabulous Factories - New Business is omitted from this sum, as the stage is marked as "Closed Lost".

We can summarize our pipeline by Stage to understand how much ARR is in each step of the sales process. To summarize the Pipeline ARR by Stage, we generate the following ARR table:

Stage 1 Pipeline

Stage 2 Pipeline

Stage 3 Pipeline

Total Pipeline

$10,000
$40,000
$80,000
$130,000

While we have the total pipeline value here, we can apply the weightings to more accurately estimate how much of the pipeline ARR will be Closed Won.

What is probability to close?

Probability to Close is a percentage that estimates how much of the ARR that is in a particular stage of a pipeline is expected to be Closed Won. Typically, Probability to Close will be lower in earlier stages of the sales process and higher in later stages of the sales process.

If we multiply the probability to close by the Pipeline ARR, we'll get the Weighted Pipeline ARR value in each stage.

Stage 1

Stage 2

Stage 3

Pipeline ARR ($)

$10,000

$40,000
$80,000

Probability to Close (%)

25%
40%
65%
$2,500
$16,000
$52,000

Weighted Pipeline ARR ($)

Probability to Close assumptions for each stage assume that deals in different stages have a different chance of being won. Deals in Stage 1 are 25% likely to be won, while deals in Stage 2 are 40% likely to be won, and deals in Stage 3 are 65% likely to be won.

After applying the probability to close to the Pipeline ARR, we now have $2,500 in Stage 1, $16,000 in Stage 2, and $52,000 in stage 3, for a total weighted pipeline value of $70,500. This estimate is closer to the real value we expect to have in Closed Won ARR.