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🍿 Today's Snack 🍦
Pipeline Coverage: How To Get Started Quickly
If you only report on leads and opportunities, you'll miss an important step of understanding how well marketing's work is turning into revenue.
Pipeline is a very important leading indicator of opportunity quality, and whether or not you're on track to hit goals later down the funnel.
A lot of companies wait too long to start using pipeline. But you can (read: should) start as soon as you're driving leads/sending them to sales/owning a rev number.
A simple model looks like this:
How much revenue do we need to drive?
$1,000,000
What's your close rate?
If 25%, then you'll need 4x pipe coverage to hit $1,000,000
If you don't have good data, use 3-5x as a first pass and adjust over time
What's your ACV?
If it's $100,000, you need 10 deals closed-won, and 40 legit opps (sometimes it pays to inflate coverage here)
What % of revenue are marketing/sales agreeing to drive separately?
If it's a 50:50 split, marketing needs to source 20 opps
What is your lead to opp conversion rate?
If 25% of leads become opps, you need to drive 80 leads
If this^ is for a quarter, divide into monthly goals:
These are all fake numbers of course, and each business will be different, but hopefully you can see here that it's not so hard to back into a model that will work.
I know the argument against this: We don't have the data. Great - start collecting it today and you'll have enough information very soon to have a good handle on this stuff.
In my experience, you can get a starting point with a month or a quarter's worth of data...and if you have to build your first systems in google sheets, it still works.
It can be infinitely more complicated: factoring in time-to-close, different close rates of different channels, etc etc.
The main point is, just start somewhere. It's a new year, let it rip.
