Rule of 15
- Sep 19
- 2 min read
Sales professionals can use the "Rule of 15" to set pipeline goals and forecast sales conversions.
For SaaS sales leaders, the 'Rule of 15' offers a reliable way to set pipeline and conversion goals for scaling Annual Recurring Revenue (ARR). If a company improves three core metrics - qualified leads (opportunities), win rate (conversion rate), and average ARR per customer - by 14.5% each, total ARR increases by approximately 50%.
The Premise is Simple
If you increase three key metrics—qualified leads (opportunities), conversion rate, and average deal size — each by 14.5%, overall revenue increases by approximately 50%.
Let’s dive into how this works and check the math.
Setting the Growth Target
Suppose the starting annual revenue is $1,000,000. A 50% growth target lifts that to $1,500,000 — a $500,000 increase.
Calculating Required Improvements
Your revenue formula is:
Revenue = Opportunities × Conversion Rate × Average Deal Size
Assume current values:
Opportunities: 100 qualified leads
Conversion Rate: 10% (0.10)
Average Deal Size: $100,000
Initial Revenue: 10 × 0.10 ×100,000 = $1,000,000
To Grow Revenue by 50%
Increase each metric by 14.5%
New Opportunities: 114.5 (100 x 1.145)
New Conversion Rate: 11.45% (10% x 1.145)
New Deal Size: $114,500 (100,000 x 1.145)
New Revenue: 114.5 x 11.45% x $114,500 = $1,501,123
In Formula Terms
Old Revenue × (1.145)3 or 1.145 x 1.145 x 1.145
This compounds the gains from a modest 14.5% improvement across all three levers with an impact of 50% growth.
$1,000,000 to $1,501,1234
When Rule of 15 Isn’t Enough
If only one factor is improved, or some metrics fall short, you might miss your growth goal. You can use the math below to check what combination gets you to $1,500,000.
Why This Works
The Rule of 15 relies on the power of compounding multiple improvements — making your pipeline more reliable, and growth more achievable than trying to double any single metric.
Focus on systematic gains in all three areas for greater impact.
The 14.5% increase is often easier to understand and communicate when rounded to a 'Rule of 15%' — a simple benchmark that approximates the impact of a 14.5% uplift for clarity and quick reference.
By targeting a 14.5% improvement in leads, conversion rate, and average deal value, sales leaders create a clear, math-driven path to 50% revenue growth — without chasing unrealistic targets or overloading their teams.
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