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Building a Growth Model

Growth modeling is the key to building your plan to hit your targets each year. Poor planning is the #1 mistake companies make regardless of their stage.

Key Inputs​

The model requires foundational company data:

  • Current ARR (annual recurring revenue)
  • Growth targets
  • SQL to close conversion rates
  • Sales cycle length (in days)
  • SQL to MQL conversion rates
  • Pipeline to SQL conversion metrics
  • Customer success carry ratios

Key Outputs​

The framework generates high-level goals including:

  • Total bookings projections
  • Required MQLs and created pipeline volumes
  • Logo growth targets
  • CSM staffing requirements

Three Planning Approaches​

Bottom-Up Sales Capacity Plan​

Calculates per-rep productivity and required headcount using the formula:

Number of Reps = Total Bookings / (Rep Productivity x Sales Cycle)

See Sales Capacity Plan for detailed guidance.

Bottom-Up Created Pipeline Plan​

Determines pipeline needs and funding-to-production ratios through conversion rate analysis.

See Marketing Plan for detailed guidance.

Customer Success Carry Plan​

Forecasts customer bookings, new logos, and CSM requirements based on conversion and carry ratios.

See Customer Success Plan for detailed guidance.

Next Steps​

Continue to Growth Model Assumptions to learn about the foundational assumptions that drive your growth model.