“Do I have enough pipeline? No, you can never have too much pipeline.” At least I didn’t think so until a few years ago when my entire approach to pipeline changed.

We are always told to create as much pipeline as possible and set the success metrics for year-over-year growth. One year our team had a particularly high compare or baseline, as we say, of pipeline generated. On every report and dashboard, our region would be in the red, and we just were not able to create the same amount of pipeline.  The normal motion when a region is in the red would be to “swarm programs, plays, and resources,” have multiple meetings to devise a plan, and try to measure it.

After too many years of seeing the same behavior, I decided to change the response.  Rather than doing more and having a bias for action, which we frequently reward, I decided not to do anything to drive the creation of more pipe. Instead, I started to look at the pipeline data in more detail. After running the analytics, what I found surprised me. I realized that looking at the open pipe year-over-year metric was actually misleading and possibly hurting us. The prior year we had created a lot of pipeline for various initiatives, but only 20% of the pipeline actually converted. So more was not more in this case. But by looking at only one data point, we had created behavior that was essentially equivalent to chasing a bouncing ball, and the wrong ball altogether. The team was spinning their wheels doing more and more, even duplicating efforts. They should have been focusing on the quality, and we could finally do that because we had the insights at our fingertips of what was great, good, or not-so-hot. It was time for a completely new approach to our pipeline. We redefined what success looked like, and now, it’s always quality over quantity.

Committing to quality is crucial because the tighter you manage it throughout the year — and even looking into the next year — the higher the close rate you’re going to get. It’s kind of like paying it forward. If your team is in the mindset of “let’s grow it at any cost,” it’s time to take a step back and look at what you really want out of your pipeline. Focusing on quality has to start with data, leading indicators, and analytics.

First of all, if you’re looking for quality, then you have to go to the source. We use historical conversion rates depending upon the source; we know that pipeline created by a core account executive (AE) has a high rate of closing. That's simply because they are probably closest to the account they created versus a business development rep (BDR) who is doing great work drumming up potential interest. We can take a look at the activity and see the quality of interactions.

We also view all of the pipeline by push count and weight it. For our business, if the deal is pushed three times or more, it’s 90% less likely to close. Rather than going through a list of 50 deals that have pushed three times or more, we can run a calculation and aggregate the deal size with the push count and other metrics, such as the number of activities related to the opportunity. The biggest deal we closed this year pushed 10 times, so we can’t just eliminate all of the deals that have pushed three times or more. In the end, the data and reporting make it so much easier to see the quality of the deal because we can score it and see all of the leading indicators simultaneously.

Data is your friend when it comes to pipeline quality — and truly justifying what is working (or not). With my own sales analytics dashboard, I can take a deeper look at the business by closed annual contract value and open pipeline for the year. Then we can quickly pivot if there are hotspots, helping to build a more sustainable model. Depending on the region, the pipeline may look good on the surface and reflect closing large deals. But the team may not have enough of a healthy run rate to help sustain them. By using the data and leading indicators, you can help to mitigate these situations in order to keep that optimum, quality pipeline.
Suffice to say, focusing on quality over quantity doesn’t mean you’re just kicking back and putting up your feet when it comes to filling the pipeline. That work does not disappear! But it’s much more beneficial when you can segment it appropriately. I’m also a huge advocate for finding the right timing when it comes to building the pipeline. I don’t want to distract my team from closing deals at the end of the quarter — that’s not the time for them to be worrying about pipeline. I want them closing those quality deals we have in the pipeline now. Knowing when to build and when to pause is a strategic way to keep your pipeline’s build-to-close ratio.

By looking at only one data point, we had created behavior that was essentially equivalent to chasing a bouncing ball, and the wrong ball altogether.”

Denise Dresser | SVP, Enterprise Cloud Sales, Salesforce
 
 
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