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​Pipeline Analysis Playbook​

In many board rooms, the most important go-to-market number this quarter is pipeline health.

For some companies, the pipeline may be less clear than a quarter or two ago. Summer seasonality may play a role. Macroeconomics might also be lurking within the numbers.

Pipeline fluctuations are normal. But any meaningful & unexpected surprise warrants introspection. Pipeline analysis often has four parts:

1. Craft the sales sandwich to predict your GTM conversion rates & determine if close rates have changed in parallel. Sales cycle plays an important role: if conversion rates remain the same, but if sales cycles double, the pipeline initially thought to be for this quarter isn’t ready to close for a half-year.
2. Build a lead generation calculator for your business using those conversion rates to understand how much lead volume the GTM engine requires to attain plan.
3. Employ Bill Binch’s Mojo Metric as a daily measure of pipeline health for the sales team. The mojo metric captures the net daily change in pipeline across new deals, expansions, & sales cycle changes.
4. Perform a second order pipeline analysis to understand where pipeline deviations start. A single pipeline number, say $7m doesn’t mean much. But $7m ready-to-close this quartery with 80% belonging to the ideal customer profile on a $1.5m bookings number means the company is about to crush its target.

Pipeline segments across five dimensions:

• Origin: marketing, product, or sales
• Product: freemium, mid-market, enterprise, other SKUs
• Stage: unqualified, aware, exploring, engaged, converted
• Sales motion: unassisted or sales assisted
• Customer segment: industry or business size

Not every company will have each pipeline permutation, but most companies will have some combination. Understanding trends in those time series should shed light on variances in lead volumes.

For example, a drop in product-qualified leads suggests a recent new onboarding flow filters traffic more aggressively, but the downstream conversion rates indicate higher proclivity to pay. Is the net outcome superior? Sales cycle delays shift pipeline the business may face headwinds closing this quarter’s number. A spike of mid-market leads because a competitor has sunsetted their product raises the question of whether to grow the mid-market AE headcount.

Pipeline is prologue. It’s worth paying attention to.

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