When I first started in GTM, it seemed to be the cardinal rule to have 3x coverage. But 3x guidance doesn’t work. If you’re an insurgent tech company or in a hyper competitive market, you know this all too well. But we have the data and we know the math to answer this question.
Creating the pipeline now helps you predict how much potential ACV pipeline to hit your annual sales targets. For Sales Reps, it’s a biproduct of win rate (how much you expect to close in pipeline) and the sales cycle length (how long it takes to close deals).
For RevOps working with CRO and other GTM leaders to answer this question, you have to understand the pipeline at a deeper level. I’ve decoded some of the modeling that I’ve done to answer this critical question for reps and for a company.
In one of my past companies, we were challenged by this approach. We found that types of our ICP behaved very differently from a deal process. Therefore, we started segmenting by the piece of our ICP and the results were dramatic. Segment by route to market, segment, sales motions or geography. It truly depends on where you see the more significant differences in your close rates and deal cycles.
I’ve also seen the flip side, in that the modeling is so detailed that breaking it by geo, route to market, and segment results in erratic results and poor assumptions. Strike that right balance.
Understanding pipeline is essential for forecasting the health of the business and enabling confident sales teams.
Once you get this. You start going further upstream. How many meetings? Deal registrations? Ah, a topic for another day…