In the competitive world of B2B sales, especially within SaaS, tracking the right metrics is crucial for revenue growth and sales efficiency. While metrics like cost per SQL and CAC are insightful, they don’t provide a complete picture of your pipeline's true efficiency. Enter the game-changing metric: cost per $1 in pipeline.

This metric not only provides a clear view of how cost-effectively you're building your pipeline but also empowers you to optimize your sales strategy for better returns on investment.

For sales and revenue leaders using HubSpot Sales Hub, understanding and applying the cost per $1 in pipeline metric can revolutionize your approach to pipeline management and significantly boost sales efficiency. In this article, we'll explore how leveraging this metric can help you streamline costs, improve decision-making, and ultimately drive sustainable revenue growth.

What is the cost per one dollar in pipeline

Cost per $1 in the pipeline is a qualitative metric that is directly tied to your company’s number one goal: revenue. This metric measures how much your company spends to get $1 in your sales pipeline, and gives you a clear view of your demand generation efficiency.

Unlike other metrics that focus on specific stages of the sales funnel, cost per $1 in the pipeline gives you a view of your entire sales process. It includes all your demand generation efforts, from marketing to sales development, so you have a full view of your revenue generation efficiency. A well-managed pipeline infrastructure can enhance the efficiency and reliability of the sales process by reducing errors, eliminating manual tasks, and optimizing resource utilization.

How to calculate cost per $1 in pipeline

Cost per $1 in pipeline = Total demand generation costs / Total pipeline amount generated

This includes all lead generation methods, whether inbound or outbound. For B2B SaaS companies using a mix of approaches, the demand generation budget should include:

Monitoring and evaluating pipeline systems is crucial to ensure accurate calculation of the cost per $1 in the pipeline. Reliable and efficient pipeline systems help in assessing performance metrics and optimizing overall profitability.

1. Marketing expenses:

• Content creation costs (blog posts, whitepapers, case studies)

• Digital advertising spend (Google Ads, LinkedIn Ads, etc.)

• Event marketing expenses (webinars, trade shows, conferences)

• Marketing automation tools and platforms

2. Sales development costs:

• Sales Development Representative (SDR) salaries and commissions

• Training and onboarding expenses for sales team members

• Sales enablement tools and technologies

• CRM costs (e.g., HubSpot CRM subscription fees)

3. Management and overhead:

• Salaries for sales and marketing managers

• Analytics and reporting tools

• Administrative costs related to demand generation activities

4. Technology stack:

• Sales intelligence platforms

• Prospecting tools

• Email outreach software

• Call tracking and recording solutions

By including all these costs you’ll get a true view of your cost per $1 in pipeline metric.

Why cost per one dollar in the pipeline matters

Let’s see an example of two B2B SaaS companies:

Company A:

• Annual Recurring Revenue (ARR): $10 million

• Total Demand Generation Costs: $2 million

• Total Pipeline Generated: $20 million

• Cost per SQL: $150

• Cost per $1 in Pipeline: $0.10

Company B:

• Annual Recurring Revenue (ARR): $8 million

• Total Demand Generation Costs: $1.5 million

• Total Pipeline Generated: $30 million

• Cost per SQL: $500

• Cost per $1 in Pipeline: $0.05

At first glance, Company A looks better. But when we look at the cost per $1 in the pipeline, a different story unfolds. Company B is twice as efficient in generating revenue, spending 5 cents to get $1 in the pipeline vs Company A’s 10 cents.

This is especially important in today’s revenue-efficient world. By tracking cost per $1 in the pipeline, sales leaders and revenue operations professionals can:

1. Make data-driven decisions to optimize demand-generation strategies

2. Allocate resources across marketing and sales more effectively

3. Identify where the sales process is leaking costs

4. Maximize revenue growth by focusing on the most efficient lead gen channels

5. Improve sales rep performance by knowing which activities generate the most pipeline

Additionally, in B2B SaaS companies where customer lifetime value and long-term relationships matter, cost per $1 in the pipeline helps align short-term sales activities with long-term business goals.

How to track cost per $1 in the pipeline: A step-by-step guide

To get the most out of this game-changing metric follow these actionable steps:

Collaboration between development and operations teams is crucial in tracking and optimizing the cost per $1 in the pipeline.

1. Identify all demand generation costs

Start by conducting a full audit of all expenses related to the pipeline. This includes:

• Marketing expenses (content creation, advertising, events)

• Sales development costs (SDR salaries, commissions, training)

• Technology and tools (CRM, sales enablement platforms, analytics software)

• Management and overhead related to demand generation

Operations teams play a crucial role in evaluating the efficiency of the pipeline, ensuring that both development and operations are aligned to avoid communication issues and delays.

Pro tip: Use your HubSpot CRM to track and categorize these expenses accurately. Create custom properties to tag and report on different cost categories.

2. Calculate total the pipeline amount

• Sum the value of all opportunities added to your pipeline within a specific time frame (e.g. monthly, quarterly, annually)

• Ensure consistency across your organization in how you define and measure pipeline value

• Consider using weighted pipeline values based on the deal stage to account for the probability of closing

Pro tip: Use Forecastio pipeline analysis to automatically calculate and report on the total pipeline value. Set up custom deal stages in your CRM that align with your sales process for more accurate reporting.

3. Calculate cothe st per $1 in the pipeline

• Divide total demand generation costs by total pipeline generated

• Example: If you spent $500,000 on demand generation and generated $5,000,000 in the pipeline, your cost per $1 in the pipeline would be $0.10

Automation tip: Set up a custom report in HubSpot that automatically calculates this metric by pulling in your cost data and pipeline value data.

4. Track and analyze

• Monitor this metric over time to see trends and areas for improvement

• Compare across teams, channels, or campaigns

• Set benchmarks and goals based on industry standards and your company’s unique situation

Data visualization tip: Use HubSpot’s reporting tools to create dashboards that show cost per $1 in the pipeline over time, by segment (e.g. product lines, marketing channels, sales teams).

5. Optimize:

• Use the data to inform budget and resource allocation

• Experiment with different strategies and measure the impact on cost per $1 in the pipeline

• Continuously refine your approach to maximize revenue growth efficiency

Improvement tip: Implement a regular review process where sales and marketing teams review cost per $1 in pipeline data together, identifying opportunities for collaboration and improvement.

By following these steps and using Forecastio, and your HubSpot CRM you’ll be well on your way to mastering the cost per $1 in pipeline metric and driving growth for your B2B SaaS company.

Using cost per $1 in pipeline for advanced sales strategies

To really get the most out of this metric and drive continuous improvement in your sales process consider these advanced strategies:

Segment your analysis

Break down your cost per $1 in the pipeline by different factors to get granular insights:

• Lead source (e.g. content marketing, paid advertising, referrals)

• Product line or service offering

• Target industry or customer segment

• Sales team or individual rep performance

• Deal size or type (new business vs. upsell/cross-sell)

HubSpot CRM tip: Use HubSpot’s custom properties and reporting features to create segmented reports. This will allow you to see which segments are most efficient at generating pipeline value.

Integrate with other sales pipeline metrics

Combine cost per $1 in pipeline insights with other sales pipeline metrics for a full view of your sales efficiency:

• Win rates

• Average deal size

• Sales cycle length

• Customer lifetime value (CLV)

• Sales qualified leads (SQL) conversion rate

• Pipeline velocity

Sales pipeline velocity can be used to evaluate the efficiency of the sales process by measuring the rate at which prospects progress through the sales funnel.

By combining these metrics you can answer critical questions like:

• Which lead sources generate the most pipeline value at the lowest cost?

• How does cost per $1 in pipeline correlate with win rates across different segments?

• What’s the relationship between pipeline velocity and cost efficiency?

Data integration tip: Use HubSpot’s integration capabilities to pull in data from other tools and create dashboards that show the relationships between these metrics.

A/B testing in your sales process

Use cost per $1 in the pipeline as a key performance indicator when:

• Testing different marketing messages or content types

• Evaluating new lead generation channels

• Assessing the impact of sales enablement initiatives

• Comparing different sales methodologies or pitch strategies

For example, you might run an A/B test on two different cold email templates and measure not just open rates or response rates but also the cost per $1 in the pipeline generated by each template.

A/B testing tip: Use HubSpot’s A/B testing features for email campaigns and landing pages and then tie the results back to your pipeline metrics for a full picture of performance.

Align marketing and sales

Use this metric to bring marketing and sales teams together by:

• Setting shared goals based on cost per $1 in the pipeline

• Identifying which marketing initiatives generate the most pipeline

• Optimizing the hand-off process between marketing and sales to minimize leakage

• Creating service level agreements (SLAs) between marketing and sales based on pipeline efficiency

This will help reduce the age-old friction between sales and marketing teams and create a unified revenue generation engine.

Alignment tip: Use HubSpot’s lead scoring features to ensure marketing is passing high-quality leads to sales and improving overall pipeline efficiency.

Forecast and plan with precision

Use historical cost per $1 in pipeline data to:

• More accurately forecast future pipeline generation based on planned investments

• Make informed decisions about scaling your sales and marketing efforts

• Justify budget requests with concrete revenue-focused metrics

• Set realistic targets for new market expansions or product launches

Forecasting tip: Use the Forecastio platform along with your cost per $1 in pipeline data to create more accurate and actionable sales forecasts.

Overcoming common hurdles to cost per $1 in pipeline

While the benefits of cost per $1 in the pipeline are clear, implementation can be tough. Here’s how to overcome some common obstacles:

1. Data accuracy and consistency challenge: Ensuring all costs are tracked and pipeline values are calculated correctly.

Solution: Set up strict data entry protocols in your HubSpot CRM and do regular audits. Automate where possible to reduce human error.

2. Cross-departmental buy-in challenge: Getting marketing, sales, and finance to buy into this metric.

Solution: Show clear case studies and projections on the revenue impact. Use Forecastio or HubSpot’s reporting features to create easy-to-understand visualizations for stakeholders.

3. Short-term vs long-term challenge: Avoiding the temptation to focus only on short-term cost reduction at the expense of long-term growth.

Solution: Always view cost per $1 in the pipeline in conjunction with other metrics like customer lifetime value and market penetration. Set both short-term and long-term goals for pipeline efficiency.

4. Complex sales cycles challenge: Accurately attributing pipeline value in long, multi-touch sales processes.

Solution: Set up a multi-touch attribution model in HubSpot CRM to fairly distribute pipeline value across various marketing and sales touch points. A slow sales cycle can significantly impact the cost per $1 in the pipeline by delaying revenue recognition. To expedite deals, identify bottlenecks in the sales funnel and implement strategies such as prioritizing high-value leads and improving follow-up processes.

Get started to supercharge your sales pipeline

Cost per one dollar in the pipeline is a powerful way to look at and optimize your entire demand generation process. By implementing this metric and the strategies above you can:

• Allocate resources better across marketing and sales efforts

• Focus on your most efficient lead gen channels

• Simplify your sales process to reduce waste and increase conversions

• Get marketing and sales teams aligned

• Make data-driven decisions to continuously improve pipeline performance

• Future proof your business in a competitive B2B SaaS world

Remember in B2B sales every dollar counts. By focusing on and improving cost per $1 in the pipeline you’re not just optimizing a metric you’re building a more efficient, effective, and profitable revenue machine for your business.

Don’t let the insights slip through your fingers. Start tracking your cost per $1 in the pipeline today and get the most out of your sales and marketing.

Ready to take your pipeline analysis to the next level?

See how Forecastio can help you analyze your pipeline in real time to drive growth. Our platform integrates with HubSpot to give you powerful analytics and actionable insights to optimize your entire sales process.