Pursuit of the Perfect Pipeline
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Transcript of 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
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
9
Joe GalvinVP & Service DirectorSiriusDecisions, Inc.
Tel: (203) 665-4018Twitter: @JoeGalvin
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
Source: SiriusDecisions
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?”
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
Source: SiriusDecisions
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
Source: SiriusDecisions
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
Source: SiriusDecisions
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
Source: SiriusDecisions
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
Source: SiriusDecisions
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
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
2010 Pipeline/Forecast Best Practices Survey
We asked what percentage of your reps
were at quota or better?
19Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010
57% of companies at 3X or less
had 60% or more of their reps at
quota compared to only 36% for
4X or higher.
2010 Pipeline/Forecast Best Practices Survey
Companies that manage a
3X pipeline or less
were more than twice as likely to use a third-party
pipeline analytic tool
20Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010
2010 Pipeline/Forecast Best Practices Survey
Over 20% of companies that manage a 3X or less pipeline reported that they had the ability to report on their pipeline
with flexibility.
21Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010
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
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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
Source: SiriusDecisions
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.
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MarketingSales EnablementSales PlaybooksSME Resource
Messages
SalesSales Activities
Skill DevelopmentProduct Training
Specialists
Opportunity Breakpoint
Sales QualifiedOpportunity
Demand Creation
Solution
Demo
Propose
Close
Source: SiriusDecisions
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
Source: SiriusDecisions
Measure Sales Productivity
SiriusPerspective: A unified productivity pipeline measures effort and quality to establish productivity benchmarks and define action.
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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
Source: SiriusDecisions
SiriusDecisions Research Brief: “Better Forecasting Through Factual Factoring”
Thank You
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
27
Joe GalvinVP & Service DirectorSiriusDecisions, Inc.
Tel: (203) 665-4018Twitter: @JoeGalvin
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
Source: SiriusDecisions
SOLVING FOR ‘X’:Pursuit of the Perfect PipelineJoe Galvin, Vice President and
Service DirectorSales Optimization Strategies
December 8, 2010