pursuit of the perfect pipeline

SOLVING FOR ‘X’:Pursuit of the Perfect PipelineJoe Galvin, Vice President and

Service DirectorSales Optimization Strategies

December 7, 2010

Executive Summary

Key issues A focus away from pure demand creation and toward sales

execution is needed Without the right data, diagnosing sales enablement gaps is

guesswork The art of the possible has been replaced with the science

of the possible – we need to change What you will walk away with

Results from SiriusDecisions/Cloud9 groundbreaking study on linking pipeline analysis with sales productivity

Ideas, tactics and action items you can use to better enable sales productivity in your organization

New ways to measure sales productivity

Source: SiriusDecisions

2

Agenda

SiriusDecisions Brief Introduction

Pipeline Dynamics The Concept of the “Perfect Pipeline”

Pipeline Survey Data When Less is More

Measuring Sales Productivity Using Pipeline Analytics to Target and Measure Sales

Enablement Initiatives

3

Joe GalvinVP & Service DirectorSiriusDecisions, Inc.

Tel: (203) 665-4018Twitter: @JoeGalvin

Sales Optimization

New Trends

Sales Training

Budget Comparison

Demand Creation Process

Channel Marketing

Marketing Performance

Sales and Marketing Integration

Channel Management

New Ideas

Organization Structure

Inside Sales Structure

Reputation Building Measurement

Effective decision making today requires…

Market Requirements

SiriusDecisions Offering Architecture

5

Advisory Services

6

Executive EdgeCMO

Demand CreationStrategies

Reputation Management

Strategies

Sales OptimizationStrategies

ChannelManagement

Strategies

MarketingOperationsStrategies

Product Marketing /Management

Strategies

Adv

isor

y S

ervi

ces Interfaces Receive:

• Access to benchmark data• Analyst inquiry• Monthly research briefs• Core Strategy Reports• Executive peer roundtables• Monthly research webcasts• Annual assessment• Research portal access

Program Deliverables

Sales Strategy and Structures Sales Coverage Models Inside Sales Resource Allocation/Cost Sales Management

Sales Operations Planning and Analytics Quota Allocation Sales Compensation Territory Management

Sales Metrics Sales Productivity Pipelines/Forecast Expense/Revenue Sales Cycle/Deal size

Sales and Marketing Alignment Lead Management Sales Readiness Sales Communications

Sales Technology Sales Force Automation Productivity Applications CRM Vendors Deployment/Adoption

Sales Benchmarks Sales Operations Cost of Sales Inside Sales

Sales Training Sales Skills/Process Opportunity Management Sales Methodology Vendors Sales Competency Model

Sales Enablement Knowledge Management Measuring Enablement Collaboration Customer Communications Readiness Applications

Sales Optimization Strategies: 2010

Research Topics

Vendor Profiles iCentera Sant/Kadient SAVO Group ZoomInfo Cloud9 ValueVision Infomentis Corporate Visions InsideView Xactly Callidus Alinean Genius Brainshark

Benchmark Sales Operations Audit Sales Pipeline

Benchmark

Location: The Fairmont Scottsdale Princess in Scottsdale, Arizona

Date: May 4-6, 2011 6th Annual Summit 575-675 B-to-B Sales and

Marketing Professionals For more information and to

register please visit www.siriusdecisions.com or call Rebecca Barber at (203) 665-4003

Save the Date!

8

http://www.siriusdecisions.com/

Agenda






9



Selling in Down Economy: The Great Recession

SiriusPerspective: A popular strategy for selling in the down economy was to increase the pipeline revenue value to goal ratio

1010


Close

SuspectQualified

SolutionNegotiate

10% 25% 50% 99%75%

$1.273 $987 $632 $256 $125

Forecast

Pipeline

Pipeline: Quota3:1, 4:1 5:1 or N:1?

SiriusDecisions Research Brief: “Pipeline to Quota: Is Three-to-One Done?”

http://images.google.com/imgres?imgurl=http://nymag.com/daily/intel/20061211grays.jpg&imgrefurl=http://nymag.com/daily/intel/tags/money&h=391&w=560&sz=79&hl=en&start=22&tbnid=z9HhIu46czqy8M:&tbnh=93&tbnw=133&prev=/images?q=recession+realities&start=20&gbv=2&ndsp=20&hl=en&sa=N

Sales and Marketing Disconnect: Pipelines and Waterfalls

SiriusPerspective: The disconnect between sales and marketing is exacerbated by their very different measurement approaches.

Inquiries

MQL

SAL

SQL

Closed

Selling Cycle

Prop

Spct

QlfySol

Demo

10% 20% 33% 75%50%

MarketingContribution to Pipeline?Revenue Contribution?Targeting Enablement?Pipeline Acceleration?

SalesMarketing Contribution? Original Demand Gen?

Quality of Pipeline?Where to Help?

11


SiriusDecisions Research Brief: “The Facets of Forecast Management”

Opportunity Lifecycle Management

SiriusPerspective: To drive collaboration, sales and marketing need a common, integrated view of opportunities and their attributes.

Inquiries

MQL

SAL

SQL

Closed

Selling Cycle

Prop

Spct

QlfySol

Demo

10% 20% 33% 75%50%

MarketingMeasured Contribution

MQL RevenueClosed Loop

Targeted Enablement

SalesProductive Prospecting

Targeted Marketing Enablement AlignmentLifecycle Transparency

Qualified Opportunity (SQL)

Demand Creation

Develop Solution

Demonstrate Value

Propose

Close

Integrated Pipeline

12


SiriusDecisions Research Brief: “The Case for Building a Productivity Pipeline”

X-Ray vs. MRI

SiriusPerspective: Sales and marketing need a more complete view to diagnose what’s really happening in the opportunity pipeline.

Traditional Pipeline One-dimensional view Conversion rates - Mkt

Projected Revenue - Sls

Opportunity Lifecycle Pipeline Multi-dimensional view – by phase

RevenueConversion ratesSales cycle lengthSuccess profiles

13


Pipeline Dynamics: Opportunity Lifecycle Visibility

SiriusPerspective: The opportunity lifecycle is measured by volume, revenue, conversion rates, sales cycle and buying phase length.

14

Top of the PipelineIdentifies sources of opportunity

Conversion RatesMeasures quality (effectiveness)

Cycle LengthMeasures effort (efficiency) Closed Loop Revenue

Provides opportunity lifecycletransparency

So

urc

e:

Siri

usD

eci

sio

ns

SiriusDecisions Research Brief: “Leveraging Pipeline Milestones to Drive Productivity”

Solving for “X”

SiriusPerspective: Increasing the number/value of pipeline opportunities does not have a linear effect on decisions won.

15


Capacity: Number of active opportunitiesConversion: Percentage of active opportunities that closeVelocity: Sales Cycle Length

3:1 4, 5 or 6:1

X = (C x C) x V

X X

SiriusDecisions Research Brief: Harnessing the Power of the Pipeline

Pursue the Perfect Pipeline

SiriusPerspective: Intense adherence to the success criteria and qualification phase means only winnable opportunities are pursued.

16


Qualified Opportunity (SQL)

Demo Value

Propose

Close

Develop Solution

Advance only the opportunities that align with the success profile

2. Qualification

No time, energy or resources wasted on unwinnable opportunities that artificially inflate pipeline values to satisfy arbitrary 3:1 ratios

3. Execution

Establish “Success Profile”: the DNA of Wins: demographics, source, value, activities and velocity

1. Analysis

Sales Capacity: Number of active dealsSales Productivity:

Net new active opportunitiesAverage deal sizeAverage sales cycle length

Pipeline Benchmarks: How well you sell

4. New Metrics for a New Age

SiriusDecisions Research Brief: “The Pursuit of the Perfect Pipeline”

SiriusDecisions/Cloud9 Survey on Forecasting/Pipeline Best Practices

Business-to-Business Sales Organizations Looking to what, why and how companies measure

their pipeline Split findings into two groups: those that manage

pipeline to quota of 3X or less, and those that manage 4X or higher

Wave II survey is still active: www.siriusdecisions.com Initial phase of the Pipeline Genome Project

17

http://www.siriusdecsions.com/

2010 Pipeline/Forecast Best Practices Survey

Companies that manage a

pipeline of 3X or less had a

32% better close rate.

18Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010


We asked what percentage of your reps

were at quota or better?


57% of companies at 3X or less

had 60% or more of their reps at

quota compared to only 36% for

4X or higher.


Companies that manage a

3X pipeline or less

were more than twice as likely to use a third-party

pipeline analytic tool



Over 20% of companies that manage a 3X or less pipeline reported that they had the ability to report on their pipeline

with flexibility.


None of the companies managing a

4X or higher pipeline reported they had flexibility in managing their pipelines.

Sales Productivity: At the Top of Leaders’ MindsSiriusPerspective: Sales and marketing leaders have recognized that what got them here won’t get them “there.”

Effectiveness (quality & results)E

ffic

ien

cy (

tim

e &

en

erg

y)

SalesProductivity

Activities

How do I get there? How do I do that?

Opportunity Breakpoint

22

ProductivityPipeline

SiriusPerspective: Increasing the productivity of salespeople results in more high-quality customer interactions.

Effectiveness (quality & results)

Eff

icie

ncy

(tim

e &

en

erg

y)

ProductivityProcessSkillsTools

Knowledge

How much time and effort does it take to…

Find a prospect Create a solution Craft a proposal

What is the quality and customer relevance of…

Suspect touches Prospect interactions Client relationships

Increased ProductivityMore Opportunities

Shorter Sales CyclesLarger Deal SizeHigher Win Rates

Activities

Optimizing Sales Productivity

23


SiriusDecisions Research Brief: “Productivity: More Than Just the Topline”

Power of Pipeline Dynamics: Pipeline Intelligence

SiriusPerspective: Identifying an “opportunity breakpoint” targets sales and marketing initiatives where they will have the most impact.

24

MarketingSales EnablementSales PlaybooksSME Resource

Messages

SalesSales Activities

Skill DevelopmentProduct Training

Specialists

Opportunity Breakpoint

Sales QualifiedOpportunity

Demand Creation

Solution

Demo

Propose

Close


SiriusDecisions Research Brief: “ Productivity Benchmarking: Measuring How Well You Sell”

Pipeline Velocity is Really Decision VelocitySiriusPerspective: Look at what is happening with your Buyers’ Journey to understand where deals get stalled.

One: Loosening of the Status Quo

Two: Committing to Change

Three: Exploring Possible Solutions

Four: Committing to a Solution

Five: Justifying the Decision

Six: Making the Selection

SiriusDecisions Buying Cycle

Solution

DemandCreation

Sales QualifiedOpportunity

Demo

Propose

Close


Measure Sales Productivity

SiriusPerspective: A unified productivity pipeline measures effort and quality to establish productivity benchmarks and define action.

26

Selling Cycle

Qualified Solution Demo CloseProposeOrder

Days to

Convert

28

21

2825

22

Stall Zone

70% 86% 67% 63%80%

20% 28.5% 33.3% 63%50%

Convert Rate

Close Rate

Recycle Zone

SellingZone


SiriusDecisions Research Brief: “Better Forecasting Through Factual Factoring”

Thank You






27



Recommended Research

Pipeline to Quota: Is Three-to-One Done? The Facets of Forecast Management The Case for Building a Productivity Pipeline Leveraging Pipeline Milestones to Drive Productivity Harnessing the Power of the Pipeline The Pursuit of the Perfect Pipeline Better Forecasting Through Factual Factoring Productivity: More than Just the Topline Productivity Benchmarking: Measuring How Well

You Sell Better Forecasting Through Factual Factoring

28


SOLVING FOR ‘X’:Pursuit of the Perfect PipelineJoe Galvin, Vice President and

Service DirectorSales Optimization Strategies

December 8, 2010

pursuit of the perfect pipeline

Business

sales execution

sales productivityideas

sales pipeline benchmark

sales enablement gaps

sales productivity source

sales operations audit

benchmark data

research topicssales