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Adapting Your Sales Models in a Crisis: Pipeline Coverage & Ratios
varicent.com
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Consistency vs Volatility “If you have a consistent funnel (month over month or quarter over quarter performance) in terms of deal size, velocity, and conversion rates, it's fairly straightforward.” If you have inconsistent funnel performance (deal sizes swing wildly, conversion rates are unpredictable) you're not going to be able to create an accurate coverage model. Aim for 4x, and then drill into why your funnel is inconsistent to create your company's sales pipeline coverage model.
How do you model your revenue plan during a global crisis? “Your sales forecast and previous funnel models are going to be wrong.” How do you plan for next quarter? In normal times, you’ll hear sales leaders talk about needing 4X sales pipeline coverage, or is it 3X coverage, or is it 2X coverage for just the gap? The question is, how much pipeline coverage is actually needed?
How do you model your revenue plan during a global crisis? “You need to pressure test every deal in your CRM.” How do you plan for next quarter? In normal times, you’ll hear sales leaders talk about needing 4X sales pipeline coverage, or is it 3X coverage, or is it 2X coverage for just the gap? The question is, how much pipeline coverage is actually needed?
Deal Hygiene and Pressure Tests “Here's the thing, CRM hygiene – deal hygiene to be specific – is the number one thing that will make or break your model.” If your reps aren't keeping Salesforce up to date, how do you know what's real or what's fake? Your sales pipeline coverage number could balloon by 30-50% because of zombie pipeline. Over the long term, requiring a high sales pipeline coverage ratio to make your number indicates bad system design and bad process enforcement.
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