If your company is based on a calendar year, you probably busy planning for 2025. Before you sign up for your new year plan, you’ll want to make sure you’ve got your sales and marketing operations all squared away. Here are 10 signs you might be hitting head winds in the new year.

10) Your Gross Retention Rate is lower than 90%.

If you are losing 10% of your existing recurring revenue, there is something off. Could be expectations setting in the sales process, issues in your project delivery, or how you are managing customer support. At this stage of the game in your business, it’s probably not the product.

9) Your Net Retention Rate is less than 105%

You’ll want net retention closer to 110%. This is the retention rate that includes upsells and cross-sells from your attrition number. Do you have the right sales and marketing programs in place to increase your footprint with customers?

8) Win Rate is lower than 25%

If you’re not scoring a 25% win rate on new customer opportunities, there is a lot of room for improvement. Improving this number alone will have the biggest impact on your booking number in 2025.

7) Sales Velocity is less than your booking target

If your bookings target is $1M in new ARR than your sales velocity should be $2800 per day. That is, you should be adding this value in new ARR each day. If it’s less than this, be careful not to sign up for a number you can’t hit. No doubt your sales booking target is also driving hiring decisions. It becomes a double whammy if you hit your hiring forecast but miss your sales number: higher expenses, no revenue to pay for it.

6) Sales Magic Number is less than $0.75

For every dollar you invest sales and marketing, you are only getting back $0.75 or less. Its okay for big vendors like Salesforce and HubSpot to outspend on sales, but the rest of us can’t. We should be shooting closer to $1.50 or greater (you can calculate your sales magic number here).

5) Your sellers are complaining about the number and quality of leads

You could have a volume and quality issue, but the team shouldn’t be squawking about it. They need to work together to solve the problem and removing barriers to progress. The fastest way to fix this is align targets and compensation to the same metric you are paid on.

4) You have too much dependency on one demand channel

You should have a solid split of demand coming from customer referrals, partner referrals, inbound, outbound, and events.

3) Your sellers need you to close deals

If your sellers are dependent on you to get deals closed, have a look and see if its because you can’t relinquish controls, you have a lack of trust, or they lack the skills. Not saying you should bow out of deals, but to become efficient, you need to graduate your sellers.

2) You’re over invested in sellers and under invested in selling units of production

Gone are the days where the spreadsheet math assumes adding one seller bags you an extra million in bookings. The median quota attainment is now 54%. The median quota is now $700K in ARR, not $1M. That means each rep is closing $350K on average. That’s not high enough. The likely reason is that we are all carrying too many underperforming reps. You might be better off with one ruthless killer and supporting them with everything they need which includes data researchers, dedicated marketers, BDR, pre-sales, and marketing spend.  That’s a unit of production.

1) You don’t trust your funnel to drive an accurate sales forecast

If you can’t trust the quality of your funnel, it becomes hard to make investment or hiring decisions, and just generally makes you look bad in front of your team and with your investors. Confidence and trust is established when you outperform expectations.

How can R40 Performance help?

R40 Performance is based on the concept of ‘Rule of 40’.  The highest valued software companies are operating on some mix of Y/Y growth and EBITDA % that totals 40 or more.  Basically they are growing and making money.  Getting there can be a challenge.  That’s why R40 Performance provides our customers with:

  • Sales Coaching to blueprint your current process shortcomings and build in continuous improvements.
  • Operational Support to help you move to best practices in marketing, outbound prospecting, sales, and customer success.  Making sure your behind the scenes is running smoothly.
  • Marketing Services to make sure you are driving demand for your products and services
  • Microsoft-based technology stack that includes marketing automation, outbound sequencing, CRM, customer success, and more.

We have decades of experience growing technology companies from pre-revenue to $50M+. And we know how to grow profitably. A collection of sales and marketing experts who fill in those voids in process, operations, and tools. Interested in a conversation? Let’s Grow.