Mastering your B2B SaaS Marketing funnel: Step-by-step guide to building & maintaining a high-converting funnel

To be able to win over the competition, SaaS Marketing teams have to deliver measurable results, and deliver them fast. 

Seems obvious, right?

Yet so many of us struggle to build and maintain the framework to support these mission-critical goals. Either because we’re not sure how to get it right and then just wing it. Or our existing funnel was not planned out well, lacks structure, is not up-to-date, or even worse — includes irrelevant / legacy data that has nothing to do with our efforts or KPIs.  

Ask any successful CMO what is the secret ingredient for a successful B2B SaaS Marketing organization, and they’re very likely to give you the same answer — a clearly defined and continuously optimized GTM funnel.

In its essence, a GTM funnel is a comprehensive framework that encompasses all customer interactions across all GTM departments — Sales, Marketing, Sales Development, and Customer Success.

But how do we plan and execute an airtight, fully aligned funnel that helps you push forward instead of getting pushed back?

To ensure our SaaS marketing funnel is properly set up, continuously optimized, and is strategically aligned with our growth targets — we first need to nail the basics. We’ll decode concepts like customer journeys and touch points, and then move on to cover the intricate elements that make up a successful B2B GTM strategy, including a workframe to help you build your funnel from scratch or optimize the existing one. 

So whether you’re a seasoned GTM fox or a complete Marketing newbie, this guide will equip you with the tools and know-how to ensure your GTM approach is airtight and your funnel becomes a well-oiled revenue generation machine. 

And when you’re ready to deep-dive into the micro components of building and honing your GTM funnel — check out our handy A-Z eBook.

Chapter 1 – The building blocks for a bullet-proof SaaS Marketing funnel

We all like to think we’re results-driven, but when it comes to defining effective Marketing goals — some of us get a little stuck. 

How do we set up goals that drive results while aligning with our company’s targets? How do we maintain such a pipeline to ensure it doesn’t fail to deliver? And even before that, how do we know what makes for an effective goal to begin with? 

Let’s unpack some of the heavy-weight concepts before diving into the practical stuff.

A solid funnel starts with smart goals

Goals that are S.M.A.R.T — Specific, Measurable, Attainable, Relevant, and Time-Based — are achievable goals. And that actually makes perfect sense when we give it some thought:

• If our goal is too broad, how can we define specific actions that will make an impact?
• If we can’t measure our goal, how will we know we’ve met it?
• If we can’t really make our goal happen, isn’t that setting ourselves up to fail?
• If our goal isn’t relevant to our company’s growth, what’s the point in setting it in the first place?
• If we don’t have a target date, when do we measure performance or outcomes?

1. Defining our business goals

Business goals are what our company aims to achieve during a predefined period of time, and are usually set on a quarterly and annual basis.

In most cases, our business goals are high-level and financial in essence, and can include total revenue, new bookings, annual recurring revenue (ARR) and monthly recurring revenue (MRR). 

A good example for a business goal would be hitting $15M in ARR by the end of next year.

2. Defining our Marketing goals

After our business goals are established, it’s up to the heads of each department to create their own independent goals that will help support the company’s business goals.

When creating our Marketing goals, we need to account for Sales & Marketing metrics — such as conversion rates, velocity between funnel stages, average sales cycles, etc. By mapping out our most important metrics, we can reverse engineer business goals and determine our Marketing objectives.

Then, to be able to pinpoint Marketing’s contribution towards a business goal, we’ll need to analyze current and historical performance, while taking into account a variety of external factors — such as events, seasonality, and market fluctuations.

Going back to our example of hitting $15M in ARR by the end of 2025, let’s assume our recent and historical metrics are as follows:

• Current ARR = $9M
• Avg. deal size = $100,000 ARR
• Avg. sales cycle = 60 Days
• Opportunity > closed won = 50%
• SQL > opportunity = 70%
• MQL > SQL = 60%
• Leads > MQL = 50%
• Website visitors > leads = 5%

Based on these metrics, Marketing and Sales would need to sign up 60 new deals with an average deal size of $100,000 by the end of 2025, which will then add $6M to our total ARR.

A 50% conversion rate from opportunity to closed-won would require Sales to have at least 120 opportunities in their pipeline, and baking in the average 60-day sales cycle, these closed-won deals would need to be generated by mid-October.

You can already see how working backward from our Marketing end-goal allows us to calculate the production levels our Marketing team needs to aim for during each step of the funnel.

• SQLs – With a 70% conversion rate from SQL to opportunity, Marketing would need to generate 171 SQLs in order to get to 120 opportunities.
• MQLs – With a 60% conversion rate from MQLs to SQLs, Marketing would need to generate 285 MQLS in order to get to 171 SQLs.
• Leads – With a 50% conversion rate from leads to MQLs, Marketing would need to generate 570 leads in order to get to 285 MQLs.
• Website visitors – With a 5% conversion from website visitors to leads, Marketing would need to generate 11,400 website visitors in order to get to 570 leads.

Remember, we started this example with the end-goal of 120 opportunities. So, to help us reach our target — we’ll need to land:

• 171 SQLs
• 285 MQLs
• 570 leads
• 1,400 website visitors

Need a helping hand in setting up your revenue goals? Check out our guide on how to build your revenue model the right way.

3. Defining your channel-specific goals

Creating goals for each Marketing channel aligns our entire Marketing team with the department’s primary goals, but also with our team’s individual goals.

By identifying channel goals, we’ll be able to figure out which initiatives can be handled in-house, which call for outsourced efforts (such as agencies or consultants), and which will require us to hire a designated workforce.

Similarly to our Marketing goals, we can analyze our current and historical channel performance data, to understand the contribution of each spent dollar towards new deals generation.

Let’s say our channel is Content Marketing and our historical performance data is as follows:

• Cost per SQL = $10,000
• SQL > opportunity = 60%
• MQL > SQL = 40%
• Lead > MQL = 30%
• New website visitors > leads = 3%

A budget of $100K allocated to content creation should then result in:

• 6 opportunities
• 10 SQLs
• 25 MQLs
• 83 leads
• 2,767 new website visitors

Based on our current conversion rates and a budget of $100K, we can determine the individual goals of the team members responsible for creating and promoting content.

When setting up these individual goals, it’s important to bear in mind that lots of external factors can affect our content performance, including seasonality, competitive activities, channel relations, and company announcements.

Chapter 2 – Understanding our GTM funnel

A GTM funnel is a holistic view of our customers’ journey from initial awareness to purchase and beyond. Unlike traditional Marketing or Sales funnels, a GTM funnel encompasses all GTM functions within a company, like Customer Success, Retention, and Partnerships.

What are its main characteristics?

1. Comprehensive – A GTM funnel considers all touchpoints and interactions a lead or contact has with our brand, products, or services.
2. Cross-functional – It involves multiple departments, ensuring a cohesive strategy across the entire customer experience.
3. B2B focus – The B2B customer journey is exceptionally lengthy and often involves multiple personas within a single account, reflecting the complexity of B2B buying committees.
4. Data-reliant – It draws heavily from data and analytics, enabling us to continuously monitor and optimize the customer journey.
5. Requiring continuous optimization – It’s anything but static, and because of that — calls for ongoing refinement based on changing customer intent and fluctuating market dynamics.

Touch points – How we track, measure & optimize customer journeys

Touch points are the fundamental elements that make up a customer journey, and can include any instance where a person engages with our brand, whether through outbound efforts or inbound engagement.

An average customer or account journey can consist of 100+ touch points, depending on the length and complexity of our buying cycle.

Why it’s important to keep track of touch points

• Helping us identify areas for improvement in our GTM strategy
• Offering opportunities to influence the customer’s decision-making process
• Providing valuable data on customer behavior and intent

What exactly do we mean by touch points? Let’s explore the six major ones to understand better:

Six key types of touch points

1. Website touch points 

These online interactions include page visits, content downloads, form submissions, and any other online interactions with our brand’s digital presence.

2. Product touch points 

These take place when a user interacts directly with our product, typically during a trial period or after purchase. They include feature usage, in-app messages, and product-related support interactions.

3. External touch points 

These happen outside of our owned properties, and can include mentions on social media, third-party review sites, industry forums, or partner domains.

4. Offline touch points 

These are physical, real-world interactions with our brand, and can include trade shows, direct mail, or sponsored events.

5. Sales touch points 

These are direct interactions with potential customers held by our Sales team, and can include phone calls, demos, email exchanges, and in-person meetings.

6. Dark funnel touch points

The trickiest of the bunch, dark funnel touch points take place outside of our measurable channels, often in places where we have limited visibility or control. They can include word-of-mouth recommendations, private forum discussions, chats on messaging app, untracked ad impressions, or content consumption on third-party platforms.

Bonus round – Inbound vs. outbound touch points

Many companies divide inbound and outbound responsibilities between Marketing (inbound) and Sales (outbound). However, this approach often holds back GTM strategies from hitting their full potential. 

You can read more about the inbound vs. outbound debate here.

Chapter 3 – Top metrics for effective funnel performance measurement

While funnel stages can vary from one company to another depending on their specific GTM strategy, there are five very common stages we need to be crystal clear on in terms of their defining criteria:

1. Lead

Definition: An individual who has shown initial interest in our brand or product.

Common criteria: 

• Provided contact information
• Downloaded content
• Signed up for a webinar

2. Marketing Qualified Lead (MQL)

Definition: A lead that Marketing has identified as more likely to become a customer based on various buying signals.

Common criteria:

• Meets ideal customer profile (ICP)
• Consumed multiple pieces of content
• Visited high-intent pages (e.g. pricing page)

3. Sales Qualified Lead (SQL)

Definition: An MQL that Sales has qualified as a potential opportunity.

Common criteria:

• Expressed direct interest in the product
• Meets budget and authority requirements
• Has a clear use case or pain point

4. Opportunity

Definition: A qualified prospect in active sales discussions.

Common criteria:

• Engaged in a Sales demo or presentation
• Deal reached a certain maturity stage such as “received a proposal”
• In the process of internal evaluation

5. Customer

Definition: A closed-won deal resulting in a paying customer.

Criteria: Signed contract and an active user of the product or service.

6. Pipeline and revenue 

Once a prospect reaches the opportunity stage, this would be a good time to set up a pipeline KPI that measures the value of the opportunity in progress. 

Taking this one step further, we can also define a forecasted revenue metric that factors in the relevant ratio between the value of the opportunity and the progress of the deal stage. Then, when an opportunity becomes a customer, the associated opportunity value becomes revenue KPI. 

When measuring pipeline and revenue, we need to ensure we connect our measurements to our cost data — to be able to track ROI, ROAS, and cost per funnel stage (cost per lead, cost per MQL, etc.).

Make it your own – Customizing the funnel stages

Depending on our GTM strategy, let’s make sure we adapt the funnel stages to our specific needs. Here are a few examples:

• Product-led growth – Could include additional stages like “Free Trial User” or “Product Qualified Lead (PQL)”
• Enterprise Sales – Could include additional stages like “Technical Evaluation” or “Contract Negotiation”
• Channel Sales – Could include partner-specific stages like “Partner Qualified Lead”

The need for speed – Velocity metrics

When we talk about velocity, we’re aiming to measure the speed at which leads move through the funnel stages. Understanding these metrics will help us identify bottlenecks and opportunities to accelerate our funnel.

Key velocity metrics include:

1. Time to MQL – Average time from lead creation to MQL status
2. Time to SQL – Average time from MQL to SQL status
3. Sales Cycle Length – Average time from SQL to a closed-won deal

Show me the money! – Conversion rates 

Here, we’ll measure the percentage of leads that successfully move from one stage to the next. In most cases, that would be from a prospect to an opportunity or from an opportunity to a closed-won deal, although you can definitely get more granular than that to gain more visibility into the performance of your funnel. 

Key conversion rates metrics include:

1. Lead to MQL
2. MQL to SQL
3. SQL to Opportunity
4. Opportunity to Customer
5. Overall Funnel conversion rate (Lead to Customer)

The three key methods to measure conversion rates

1. Running conversion rate – This method reflects the ongoing rate of conversion within a specified time window. It paints a real-time picture of how effectively your leads are converting at any given moment. 
2. Cohort conversion rate – This measurement is based on a group of leads generated within a specific time period. For example, when measuring cohort conversion rates, we’ll consider the velocity between stages because of time delays that can improve the conversion rate over time.
3. Snapshot (simple) conversion rate – This method provides a “rearview mirror” analysis of a specific timeframe. For example, to determine the conversion rate from MQL to SQL during Q2, we’ll divide the total SQLs by total MQLs within that quarter. 

The relativity theory – Industry benchmarks

Although benchmarks can vary widely from one industry to another, product complexity, business models, GTM strategy, and target market — here are some general B2B SaaS benchmarks for you to consider as general guidelines:

• Lead to MQL: 10-15%
• MQL to SQL: 15-20%
• SQL to Opportunity: 20-30%
• Opportunity to Customer: 20-30%
• Overall Funnel (Lead to Customer): 1-2%

Velocity benchmarks:

• Time to MQL: 1-2 weeks
• Time to SQL: 1-3 weeks
• Sales Cycle Length: 3-6 months (might be longer for Enterprise deals)

Jumping ship – Drop-off points

Every GTM funnel has its drop-off points, or instances where prospects end their journey by opting out of communication or becoming non-responsive to your initiated touchpoints.

Nothing much we can do when prospects choose to end all communication with us, but if they’ve simply stopped responding (and fit into your ICP criteria) — consider a suitable nurture plan. To increase the likelihood of your prospect regaining interest, it’s highly recommended to ditch aggressive tactics or cheap clickbaits in favor of providing value-packed content.

Chapter 4 – All done with setup. Now what? – Optimizing our funnel performance

A successful B2B funnel is a well-maintained one. So, now that our funnel strategy is clearly defined, our metrics are set up, and we have a good understanding of what we need to measure and why — it’s time to ensure optimal funnel performance. Here’s how:

1. Sometimes GTM strategies pivot. So, regularly review and refine your stage definitions to ensure full alignment with your strategy.
2. Not all leads were created equal. Use lead scoring models to improve the quality of your leads at each stage of your funnel.
3. Analyze conversion rates and velocity metrics to identify bottlenecks and opportunities for optimization.
4. Develop carefully-targeted content and well-planned nurturing strategies for each stage of your funnel.
5. Streamline the funnel flow. Ensure Sales and Marketing alignment on funnel definitions and handoff processes.
6. Test, measure, and repeat. Continuously optimize your approach based on data-driven insights, which will enable you to identify red flags or areas that could be honed.

TLDR

• Clearly defined funnel stages are crucial for effective measurement and optimization. Your goals need to be S.M.A.R.T — Specific, Measurable, Attainable, Relevant, and Time-Based.

• Get your data in order: Be sure to customize your funnel stages to align with your specific GTM strategy.

• Monitor both conversion rates and velocity metrics to get a complete picture of your funnel performance.

• Use industry benchmarks as a starting point, but develop your own benchmarks based on your historical and current performance.

• Regularly review and optimize your funnel definitions and processes to improve overall GTM effectiveness: Gain valuable insights into your GTM performance, see what works and what needs to be fixed.

• Identify opportunities for improvement across the entire customer journey.