6 Core Principles for revenue leaders to build a world class pipeline, and take the stress out of pipeline reviews, forecasting and QBRs

Cedric Royer

Founder @ Jump Foundation

Is your Pipeline a Wishlist, or do you consistently reach your forecast within a 5% margin? Literally 90% of the revenue leaders I talk to tell me their pipeline sucks.

Not at first. First they are confident. Then, they start to open up, and we all know what they have to work with: opportunities that slip quarter after quarter, not enough opportunities, prayportunities, sales reps that call in sick the day of their pipeline reviews, sales reps that commit a deal without having spoken to any decision maker or budget owner, stress that kicks in in the weekend by just thinking about the coming week…

But it can be different. Looking at my experience, and having spoken with many tech sales leaders, those 6 principles keep returning.

“There are pipelines with 11 stages and above, but the consensus here is that 4, maximum 5 stages is enough. When people use more stages, I see there is some confusion between an activity and a stage.”

In this article we won’t cover reverse engineering, managing activity level, gap planning, data driven behaviour or other operational aspects. This article covers the principles of a world class pipeline.

Let’s start with the basics. How do world class pipelines look like? I used to think that the key was to have a pipeline of 3-4 times the size of the quota, but there are other elements. While a pipeline should be a multiple of the quota, quality trumps quantity, and this translates in the following quality principles.

4 Quality Principles of world class Pipelines

1. The Right Customer with the Right Opportunities

Building a world class pipeline means working with the right customers, and contacts within these customers.

The best solution is to create ideal customer profiles, and then relentlessly execute on generating leads and opportunities with them.

Working on a focused list comes with many advantages:

Your pitch and use cases match the challenges of your ideal customer profiles,
you know their challenges,
you know you can help them, and
you know there is a more than reasonable chance to close them

Compare this with a random call list where you have different roles, different sectors and different use cases. This random activity leads to a number of lucky shots at best.

In other words, by focusing on the right customers, you will also optimise how you use your time, by narrowing down to a set of prospects that fits your customer profile, rather than mindlessly dialling out to try to get an appointment with a random prospect.

IDENTIFY YOUR IDEAL CUSTOMER
CREATE A CUSTOMER PROFILE
MAKE A CORE TARGET LIST
FOCUS

2. Spotless Documentation

A quality principle we all hear in admin is “if it is not documented, it didn’t happen.” Documenting your progress is crucial and matches exactly what you are reporting.

World class pipelines have all their opportunities in the right stages, and it is clear that during pipeline reviews the sales rep has control over the opportunities, understands the next steps and has documented in the CRM what she is now reporting.

For example, you will only find opportunities in the final stages (like negotiation or commit) with proposals connected to them.

3. Movement of the Opportunities

Within movement we are looking at the activity level and control of the sales rep on the opportunity. In other words, this principle answers the question: “Is the sales rep working on the deal, and is the deal progressing through the sales stages in a timely manner.”

In a world class pipeline, you see that the sales rep controls her pipeline and opportunities, and has built momentum with her pipeline: she is actively working her opportunities, with the result that she moves her opportunities regularly through the pipeline, and either closes the opportunities as lost and drops them, or she wins the deals.

This also means that you won’t see opportunities that are widely outside the average sales cycle, or unworked (or inactive) opportunities, or other anomalies.

4. Balance in the Sales Stages

Finally, we are also looking at the general balance in the sales stages. With this, I mean the following:

Do you have a healthy stream of new opportunities entering your pipeline? (the amount depends on your environment, and should in any case be enough to replenish your closed opportunities. If you close 1 per month, and lose 3 others, then you’d need to add at least 4 new opportunities during that month, to maintain a healthy level of opportunities.
Do you have a regular amount of opportunities that you win (is your conversion rate equal or higher than your organisation’s or better, than similar market players?)

Now that we have covered the quality principles, let us take a look at the implementation principles.

2 Implementation Principles

Before we go deeper in the implementation principles, let us look at the number of sales stages. There are pipelines with 11 stages and above, but the consensus here is that 4, maximum 5 stages is enough. When people use more stages, I see there is some confusion between an activity and a stage.

Uniform Methodology

As long as the opportunity or deal is in the pipeline, we are qualifying. And for this we need a qualification methodology.

The use of qualification methodologies is crucial to make sure you keep on qualifying in a consistent way your opportunities or deals, and this across your entire organisation. It will also help you to conclude whether you are adding value to your customer, or if you are wasting your time. Best practice is to have 1, maximum 2 different methodologies.

Why not 1?

If you sell to 1 market segment, then use 1, however, when you have multiple segments, like mid market and enterprise, then you will have different complexities, sales cycles and approaches, and it makes sense to use a more lightweight qualification methodology for your mid market, and then more thorough methodologies for your enterprise deals.

PACT, BANT or even the 3 Why’s are good mid market methodologies, and MEDDPICC is a brilliant enterprise grade qualification methodology.

Implementing the 3 Gs

This principle is without any doubt the most impactful of all the principles. Every company that implements this, routinely improves their forecasting accuracy from 30 to 95% within 3 to 6 months. And this is very closely related to the 3d and 4th quality principle outlined above.

When we have our sales stages created, and defined what every stage means, we still have inconsistency, because some people interpret a definition in one or the other way. Besides this, many sales reps give to the customer, but forget to define what they need to get in order to move a deal or opportunity forward.

You will solve this by implementing the following 3 Gs: the gives, the gets and the gates, for every sales stage.

Gives

Identify what information, tool, component you will give to your prospect at the current stage.

For example: case studies, price, story to solve the pain, …

Gets

Identify what you need to get from your prospect at the current stage. For example: commitment, agreement on the scope, a start date, a signed PO, …

Gates

Identify the condition to move the opportunity to the next stage. As long as these conditions have not been met, then you cannot move this opportunity forward.

For example: knowing the priorities of the budget owner, prospect agrees with scope, decision maker confirms budget, …

A word of caution: this only works when the team or organisation implements and manages those 3 Gs, during company communications, QBRs, deal reviews, pipeline reviews… and showcase the successes of these implementations widely.

It makes your pipeline much more solid. No second guessing why a certain opportunity is in a certain stage.
It creates a consistent way across your organisation to work opportunities.
It helps you covering all the bases in the opportunity, on all the different levels, ranging from time, to scope, to contact people, to expectations, processes and price,
It helps you even more in building the right cadence, by better understanding why certain sales stages takes a certain amount of time, and when you need to spend more attention to certain stages to coach your sales reps on, or to investigate what is creating bottlenecks in what stages and how you can remove those,
It prevents you from rushing the opportunity through the different sales stages since you need time to collect the gets, and share the gives. Short cuts don’t help!

These are the 6 core principles… To be frank, don’t implement those at your own risk. Change is always risky, and nevertheless you will be surprised by how quickly people start to work in that way.

Share: