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Pipeline Generation - SaaS Barometer Newsletter
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Inbound leads efficiency should be measured by a Marketing CAC Ratio which can include % xDR time/expenses invested in managing inbound leads to get a holistic picture. “This makes planning and budget decisions on how much to invest in pipeline development by xDRs outbound activity vs Inbound Marketing leads a subjective decision and far too often based upon which GTM leader has a more convincing story or more political capital.” If you are in a GTM function and you do not have a pipeline goal - ask yourself who owns the pipeline at your company. If you cannot answer the question "whose job is on the line for pipeline generation" if pipeline ($) goals are unmet, you may have a problem.
Calculate, communicate, and publish "pipeline coverage ratio" for every rep, team, and “source” of opportunities for both New ARR and Expansion ARR at the beginning and end of every month or quarter. Have a dashboard that shows every AE what their next "month/quarter" projected new bookings will be based upon their specific, and current pipeline coverage ratio (makes pipeline development more relevant when translated into projected bookings and quota achievement). Measure the % of Closed-Won revenue from pipeline developed in the same period (month or quarter) and factor that into the pipeline coverage ratio and current period pipeline development goals. “Every dollar of new pipeline required to hit the revenue number should be allocated down to the organization, team, and individual level, by having a well communicated and understood pipeline quota that is a primary variable for bonus and/or incentive compensation.” Every dollar of pipeline generated should be measured to understand the "cost" to generate $1 of pipeline and ultimately $1 of New ARR by pipeline source.
I have been discussing pipeline generation and management with industry thought leaders, revenue practitioners and calling upon my own experiences. I am pleased to share the following ideas and best practices. The pipeline “momentum” dashboard shared byBill Binchon an episode of theMetrics that Measure Up Podcastestablishes pipeline specific objectives for AEs and SDRs. Let’s take a look. “It is important to establish pipeline specific objectives for AEs, SDRs, and Marketing.” Additionally, a majority of AE's do not have a specific measurable objective for self-directed pipeline generation. One novel concept is to consider paying a different commission rate for opportunities created and closed from self-directed AE generated pipeline, versus those generated by Sales Development and/or inbound Marketing leads.
I have been discussing pipeline generation and management with industry thought leaders, revenue practitioners and calling upon my own experiences. I am pleased to share the following ideas and best practices. The pipeline “momentum” dashboard shared byBill Binchon an episode of theMetrics that Measure Up Podcastestablishes pipeline specific objectives for AEs and SDRs. Let’s take a look. “Moreover, they are most often incented by meetings scheduled, meetings held, and less commonly, Sales Qualified Leads (SQL) or Sales Accepted Leads (SAL).” Additionally, a majority of AE's do not have a specific measurable objective for self-directed pipeline generation. One novel concept is to consider paying a different commission rate for opportunities created and closed from self-directed AE generated pipeline, versus those generated by Sales Development and/or inbound Marketing leads.
I have been discussing pipeline generation and management with industry thought leaders, revenue practitioners and calling upon my own experiences. I am pleased to share the following ideas and best practices. The pipeline “momentum” dashboard shared byBill Binchon an episode of theMetrics that Measure Up Podcastestablishes pipeline specific objectives for AEs and SDRs. Let’s take a look. “In order to align the event-based measurements with the desired outcome of revenue growth, consider adding both a qualified pipeline ($) and Closed-Won ($) incentive compensation variable to SDRs.” Additionally, a majority of AE's do not have a specific measurable objective for self-directed pipeline generation. One novel concept is to consider paying a different commission rate for opportunities created and closed from self-directed AE generated pipeline, versus those generated by Sales Development and/or inbound Marketing leads.
Inbound leads efficiency should be measured by a Marketing CAC Ratio which can include % xDR time/expenses invested in managing inbound leads to get a holistic picture. “Cost per Sales Qualified Lead, Cost per $ of qualified pipeline, and Cost per $ of New Revenue from xDR outbound activity needs to become a TOP revenue growth efficiency metric…” If you are in a GTM function and you do not have a pipeline goal - ask yourself who owns the pipeline at your company. If you cannot answer the question "whose job is on the line for pipeline generation" if pipeline ($) goals are unmet, you may have a problem.
Establish line item quota elements for New revenue vs Expansion revenue for AEs and SDRs - the result will be an increased pipeline focus on each type of ARR. “Calculate, communicate, and publish "pipeline coverage ratio" for every rep, team, and “source” of opportunities for both New ARR and Expansion ARR at the beginning and end of every month or quarter.” Pipeline generation should be the number one measurable objective for the head of Marketing, and the head of Sales Development. This objective should cascade down to every Marketing and Sales Development resource involved in pipeline generation and pipeline capture. Every dollar of new pipeline required to hit the revenue number should be allocated down to the organization, team, and individual level, by having a well communicated and understood pipeline quota that is a primary variable for bonus and/or incentive compensation. This means that everyone in Sales Development and Marketing should own a portion of the pipeline goal. And if existing customer expansion is part of the revenue growth strategy, Customer Success should have an expansion pipeline goal in concert with a Customer Success Qualified Lead (CSQL) goal.
Establish line item quota elements for New revenue vs Expansion revenue for AEs and SDRs - the result will be an increased pipeline focus on each type of ARR. “Measure the % of Closed-Won revenue from pipeline developed in the same period (month or quarter) and factor that into the pipeline coverage ratio and current period pipeline development goals.” Pipeline generation should be the number one measurable objective for the head of Marketing, and the head of Sales Development. This objective should cascade down to every Marketing and Sales Development resource involved in pipeline generation and pipeline capture. Every dollar of new pipeline required to hit the revenue number should be allocated down to the organization, team, and individual level, by having a well communicated and understood pipeline quota that is a primary variable for bonus and/or incentive compensation. This means that everyone in Sales Development and Marketing should own a portion of the pipeline goal. And if existing customer expansion is part of the revenue growth strategy, Customer Success should have an expansion pipeline goal in concert with a Customer Success Qualified Lead (CSQL) goal.
I have been discussing pipeline generation and management with industry thought leaders, revenue practitioners and calling upon my own experiences. I am pleased to share the following ideas and best practices. The pipeline “momentum” dashboard shared byBill Binchon an episode of theMetrics that Measure Up Podcastestablishes pipeline specific objectives for AEs and SDRs. Let’s take a look. “In order to align the event-based measurements with the desired outcome of revenue growth, consider adding both a qualified pipeline ($) and Closed-Won ($) incentive compensation variable to SDRs.” Additionally, a majority of AE's do not have a specific measurable objective for self-directed pipeline generation. One novel concept is to consider paying a different commission rate for opportunities created and closed from self-directed AE generated pipeline, versus those generated by Sales Development and/or inbound Marketing leads.
Pipeline contribution from xDR teams needs to be measured not only from an outcome perspective ($ of qualified pipeline) but also from an expense perspective (SDR CAC Ratio). “Pipeline coverage ratio for xDR outbound generated pipeline vs xDR supported inbound leads needs to be measured- benchmarks show inbound leads result in a 2x - 3.2x higher win rate.” Inbound leads efficiency should be measured by a Marketing CAC Ratio which can include % xDR time/expenses invested in managing inbound leads to get a holistic picture.
Marketing CAC Ratio, Sales Development CAC Ratio, and Account-Based Program CAC Ratio should be calculated. “Each dollar of pipeline generated should be measured by pipeline source to calculate the conversion rate from qualified opportunity to Closed-Won.” 𝐼𝑛𝑏𝑜𝑢𝑛𝑑 Marketing 𝑙𝑒𝑎𝑑 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑟𝑎𝑡𝑒 (𝑏𝑦 𝑠𝑡𝑎𝑔𝑒)
In Win rates