The Sales Development Conference Oct. 27, 2021

1. Understanding Your
Business Algebra
Joseph Lee, VP Growth Marketing @ People.ai

2. ©2020 All Rights Reserved
Who am I? Joseph Lee, VP Growth Marketing @ People.ai
joe.lee@people.ai

3. ©2021 All Rights Reserved

4. ©2021 All Rights Reserved
Business Algebra 101
The variables that go into hitting your
goal AND how your goal impacts
business revenue.
(Activities → Pipeline → Revenue)

5. ©2020 All Rights Reserved
Why is
Business
Algebra
Important?
1. Demonstrates Command of YOUR
Business

6. ©2021 All Rights Reserved
Dazzle Them With Data

7. ©2021 All Rights Reserved
Dazzle Them With Data

8. ©2020 All Rights Reserved
Why is
Business
Algebra
Important?
1. Demonstrates Command of YOUR
Business
2. Provides Quantifiable Leverage to
Ask for More Resources

9. ©2021 All Rights Reserved
“If I give you a dollar, what can I expect in return?”

10. ©2020 All Rights Reserved
Why is
Business
Algebra
Important?
1. Demonstrates Command of YOUR
Business
2. Provides Quantifiable Leverage to Ask
for More Resources
3. Validates Goals and Maps Out How
You Will Reach It

11. ©2021 All Rights Reserved

12. ©2020 All Rights Reserved
What’s the
Equation to
Success?
1. Start with Revenue

13. ©2020 All Rights Reserved
Always Connect Your Work to Revenue
Marketing + Sales Development Sourced ARR Target:
$3,920,000
*40% of New Business ARR Target
Company Gross ARR Target: $14,000,000

14. ©2020 All Rights Reserved
What’s the
Equation to
Success?
1. Start with Revenue
2. Calculate Pipeline Goal...
CORRECTLY

15. ©2020 All Rights Reserved
How NOT to Calculate Pipeline Goals
Q1-FY22 Q2-FY22 Q3-FY22 Q4-FY22 FY22 TOTAL
Gross ARR Target $2,000,000 $3,000,000 $4,000,000 $5,000,000 $14,000,000
Total Pipe Coverage Goal (3x) $6,000,000 $9,000,000 $12,000,000 $15,000,000 $42,000,000
When deal cycles are longer than a quarter, the pipeline you generate today
won’t impact your ARR goal this quarter.

16. ©2020 All Rights Reserved
Variables to Consider for Pipeline Model
Basic
• Pipeline Coverage Target (Calculated by Win Rate)
• Average Deal Cycle
• Average Selling Price (ASP)
• Attribution Targets (Marketing, Sales, Customer Success, Partner, etc.)
• Current Open Pipe by Close Date
Intermediate
• Deal Type (New Business, Upsell/Cross Sell, Renewal)
• Segment (Mid-Market, Enterprise, Strategic)
• Average Pipeline Pushed
• Product Line
Advanced
• Weighting by Opportunity Stage

17. ©2020 All Rights Reserved
Calculate Pipeline Goals
Q1-FY22 Q2-FY22 Q3-FY22 Q4-FY22 FY22 TOTAL
Gross ARR Target $2,000,000 $3,000,000 $4,000,000 $5,000,000 $14,000,000
Total Pipe Coverage Goal $6,000,000 $9,000,000 $12,000,000 $15,000,000 $42,000,000
Total Pipeline Generation Goal $7,850,000 $11,750,000 $14,700,000 $17,850,000 $52,150,001
Variables:
● Target Coverage: 3x coverage (assumes 33% Win Rate)
● Average Deal Cycle: 1 quarter
● Avg. Push: 15% 1 quarter, 10% 2 quarter, 5% 3+ quarters
Marketing Pipe Goal $1,648,500 $2,467,500 $3,087,000 $3,748,500 $10,951,500
Marketing SQO Goal 21 31 39 47 137
Variables:
● Deal Type: 67% new business, 33% upsell
● Marketing Contribution: 40% of new business
● Segment: 75% Enterprise, 25% Mid-Market
● ASP: Ent: $85k, MM: $20k

18. ©2021 All Rights Reserved
Sample Pipeline Model Template
Link to Template

19. ©2020 All Rights Reserved
What’s the
Equation to
Success?
1. Start with Revenue
2. Calculate Pipeline Goal...
CORRECTLY
3. Model Activities Needed to Succeed

20. ©2020 All Rights Reserved
Break Out Your Various Demand Funnels
OPPORTUNITIES
Qualified Pipeline
CLOSED WON
LEADS
Contacts generated through marketing
activities.
MQLS
Filled out demo form.
OPPORTUNITIES
Qualified Pipeline
CLOSED WON
USERS
Users in free version of the product.
PQLS
Users who’ve indicated interest in
upgrade product.
Inbound Funnel PLG Funnel
OPPORTUNITIES
Qualified Pipeline
CLOSED WON
CONTACTS
Contacts from database or generated
through 3rd party.
MEETINGS SET
Meeting set by the xDR.
xDR Outbound Funnel

21. Inbound Funnel
Target
PLG Funnel
Target
SDR Outbound
Target
Inbound Conv.
Rate
PLG Conv. Rate SDR Outbound
Conv. Rate
Leads/User
/Contacts
26% 10% 5%
MQLs/PQLs
/Meetings
2% 13% 33%
Stage 1 51% 68% 55%
Stage 2 25% 53% 25%
Closed Won 10 20 20
ASP $100k $50k $100k
ARR $980k $980k $1.96m
% 25% 25% 50%
Start from Revenue And Work Your Way Up
1. Lock in your assumptions: Conversion
Rates and ASPs
2. Break up ARR goal into target
contributions - ARR goal was $3,920,000
3. Use historical conversion rates to calculate
each of the funnel metrics required to
meet your goal

22. Inbound Funnel
Target
PLG Funnel
Target
SDR Outbound
Target
Inbound Conv.
Rate
PLG Conv. Rate SDR Outbound
Conv. Rate
Leads/User
/Contacts
15000 4300 8780 26% 10% 5%
MQLs/PQLs
/Meetings
3900 430 439 2% 13% 33%
Stage 1 78 56 145 51% 68% 55%
Stage 2 40 38 80 25% 53% 25%
Closed Won 10 20 20
ASP $100k $50k $100k
ARR $980k $980k $1.96m
% 25% 25% 50%
Start from Revenue And Work Your Way Up
1. Lock in your assumptions: Conversion
Rates and ASPs
2. Break up ARR goal into target
contributions - ARR goal was $3,920,000
3. Use historical conversion rates to calculate
each of the funnel metrics required to
meet your goal

23. Inbound Funnel
Target
PLG Funnel
Target
SDR Outbound
Target
Inbound Conv.
Rate
PLG Conv. Rate SDR Outbound
Conv. Rate
Leads/User
/Contacts
15000 4300 8780 26% 10% 5%
MQLs/PQLs
/Meetings
3900 430 439 2% 13% 33%
Stage 1 78 56 145 51% 68% 55%
Stage 2 40 38 80 25% 53% 25%
Closed Won 10 20 20
ASP $100k $50k $100k
ARR $980k $980k $1.96m
% 25% 25% 50%
Business Algebra Shows How Attainable Your Goal Is
Notes:
● Key: Risk, Strength
● Low MQL CVR in Funnel #1 makes Leads
and MQL goal unattainable
● Opportunity to invest in Funnel #2 due to
high MQL and S2 CVR rate
● Need to dig into low win-rate of Funnel #1
and Funnel #2

24. Inbound Funnel
Target
PLG Funnel Target
Budget Needed $900k $430k
Cost per
Lead/User/Contact
$60 $100
Leads/User/Contacts 15000 4300
MQLs/PQLs/Meetings 3900 430
Stage 1 78 56
Stage 2 40 38
ARR $980k $980k
Business Algebra Shows How Much Budget You Need

25. ©2020 All Rights Reserved
What’s the
Equation to
Success?
1. Start with Revenue
2. Calculate Pipeline Goal...
CORRECTLY
3. Model Activities Needed to Succeed
4. Utilize Key Metrics from the Algebra
to Report Success

26. ©2021 All Rights Reserved
Dashboards - Are you a profit center or a cost center?
• Line 1: Revenue
• Line 2: Marketing
Engagements & MQLs
• Line 3: Opportunities By
Source (Marketing, Sales, etc.)
• Line 4: SQOs (Pipeline) By
Source

27. $1.1m $1.1M
0%
Marketing
Generated Pipe
Q4
Q3
Department QBRs - What is your North Star Metric?
Q1
+127%
$2.5M
$171
$310
+81%
Feb
Cost Per Lead (CPL)
-32%
$211
Mar Apr
9,500
10,100
+7%
Feb
Marketing Engaged
Database
+9%
Mar Apr
11,100
5,207
5,5,500
+6%
Feb
Organic Web Traffic
(Sessions)
+1%
Mar
114
125
+10%
Feb
MQLs Generated
+26%
Mar Apr
157
Apr
5,600
3 3
+0%
Feb
Number of Enterprise
BDRs
+0%
Mar Apr
3
Inbound Leading Indicators
Outbound Leading Indicators
8 12
+50%
Feb
Number of NBMs
Sourced By BDRs
+8%
Mar Apr
13

28. ©2021 All Rights Reserved
Weekly Activity Reporting - What does your boss care
most about?

29. ©2020 All Rights Reserved
Ending
Where We
Started
Why is Business
Algebra Important?
1. Demonstrates Command of YOUR
Business
2. Provides Quantifiable Leverage to Ask
for More Resources
3. Validates Goals and Maps Out How
You Will Reach It

30. ©2020 All Rights Reserved
Questions? Joseph Lee, VP Growth Marketing @ People.ai
joe.lee@people.ai

31. ©2021 All Rights Reserved
Enjoy a coffee
on us!
Save 2-5 hours/week with
PeopleGlass a free app that
lets you update Salesforce
like a spreadsheet.
Sign up for PeopleGlass
today and get a $5
Starbucks gift card. Visit our
booth to learn more!
Try PeopleGlass free

32. ©2021 All Rights Reserved
C
l
o
s
i
n
g
t
i
t
l
e
s
l
i
d
e
R
e
m
o
v
e
t
r
i
a
n
g
l
e
b
e
f
o
r
e
u
s
e