Anyone who has ever been in a Sales role will tell you, that pipeline is king above all else. It is the ultimate metric for many sales leaders, CROs, and Board members alike. It is seen as the strongest indication of how your business will perform over the next fiscal period. There is a constant anxiety that purveys across revenue organizations about not just the state of the pipeline itself, but specifically the coverage.

The value of your pipeline as compared to your budgetary target. Where you have a target of $1m for the fiscal year there is a push to have between $3m-$4m worth of opportunities in your pipeline at any time, across all stages of the buying process.

The emphasis that this desire to be able to report optimum coverage; by converting enough leads into “qualified” leads can be a driver of practices that subsequently cause pain further down the line; specifically when it comes to engaging Presales.

How we get to poor pipeline

The metrics of different parts of the revenue team are specific to their function; SDRs are measured on calls made and meetings booked, AEs measured on pipeline generated and deals closed, Presales on the impact they have on deals and things such as the amount of time they spent on a particular deal which was won, versus one that was lost.

As the numbers get harder to hit there is a natural sense of desperation that sets in and this is where we start to see behavior that can lead to poor pipeline.

It’s often not deliberate and it would be wrong to place the blame at the feet of any one individual or team. It is ingrained in the mentality of revenue organizations in all types of companies across the world. When a car showroom runs a ‘VIP’ event it will measure the number of registrations and attendees to determine the number of cars that it will expect to sell. When they need to demonstrate that there is a strong pipeline the definition of ‘VIP’ becomes increasingly loose to the point where a ‘VIP’ simply means ‘a person who once bought a car or showed interest in possibly buying one day even if they didn’t buy it’.

It is no different in software sales.

The Problem with bad qualification

Any lead that is converted automatically moves to the “qualify” stage in the sales process - and for the buyer, they are heavily in the “evaluation” stage. Sales qualification is a fairly straightforward process or at least it should be; budget, authority, need, and timeline. All of these are crucial aspects in determining whether or not the opportunity is ”real” and this is the first stage at which the process can fail.

The rigor with which sales organizations conduct qualification will inevitably be led to some degree by their need to qualify. Leading to deals that use valuable time from the revenue organization and don’t close.

Diagram/graph showing inverse proportionality of quality of qualification

The nature of a sales cycle is such that any action taken early on will have a knock-on impact in the later stages. This can be anything; from commitments on price, functionality or crucially the strength of qualification.

There is a level of comfort that anyone in a Sales position; IC or leader, will get from seeing a strong degree of pipeline coverage as in theory, the higher the volume and value of deals in the pipe - the lower the percentage that actually needs to be closed. There is certainly truth in the theory, but in a modern, buyer-led world it is a blunt instrument that forgoes the wide variety of tools now available to selling teams which can drive a focus on quality over quantity.

When a deal moves from “Qualify” to “Discovery” it is typical that Presales will become actively engaged and the customer will expect a demo if they’ve not already had one.

Poorly qualified deals land on the desk of the Presales team, who are then called upon to prepare and deliver multiple demos. Not to mention the time spent on discovery calls, internal preparation, research, and the impact that this might have on closing activities for deals that are actually real.

What to do about bad pipeline

There is, I would argue, a not insignificant number of people for whom a notable percentage of their pipeline is there as a buffer and has little to no chance of closing, but there is a reluctance to remove it right now as it would potentially send their coverage the way of Wile E Coyote.

I think it’s worth stating at this point that I’m not advocating for an evisceration of all pipeline. As there clearly is value in it, and there will always be an extent to which having greater pipeline coverage will increase your chance of success in hitting your quota. There are, after all, going to be certain occasions when you will find yourself in a situation of ‘right product, right time, right price’ and the deal will close.

What this doesn’t address, however, is the impact on the wider team who are aiding in the process of pushing the deal forwards. The Sales Engineers who find themselves burnt out by the sheer volume of demos they’re giving each week, the RFP teams who are drowning in questionnaires. Whilst pipeline coverage is a tool for helping us reach our goals it should not be the only one that we consider.

How can we improve pipeline?

Speak to any Sales Engineer about their number 1 challenge in executing effectively and most if not all will tell you some of “I need more discovery”. The increase in the number of “Disco/Demos” whereby you give a high-level demo whilst also doing discovery, has grown exponentially in the last few years. I’m not going to interrogate the merits of that particular approach here, but rather point to something that is often not mentioned.

As you’ve probably realised by now. That thing is qualification. It is inexorably intertwined with the discovery process but is also distinct from it. If we are going to improve the quality of the pipeline, we need to evaluate how we are even getting opportunities into there in the first place.

Alongside applying a greater degree of scrutiny to the deals that are currently in the pipeline it is also a useful experience to review how we qualified deals that were qualified well, versus those that were pushed forward on a “wing and a prayer”.

Getting your product in front of your potential buyers at the earliest possible opportunity is crucial to effective qualification. It is not only about ensuring that you have a good fit with the problem they’re trying to solve, but remembering that they are qualifying you - as much if not more than - you’re qualifying them.

This is where an early-stage interactive demo can have an immediate impact. It solves several pain points for both buyers and sellers; and can be the key to unlocking better qualification. Let’s return to the example of buying a car. If you were prevented from seeing the cars on offer before you’d spent 2 hours with the receptionist, the salesman, and possibly their manager - you might well find yourself in a situation where the vehicles on offer were totally unsuited to your needs, and you actually leave before you’ve even sat in one.

If instead, you were given the chance to explore the options, have a brief conversation with the salesperson, and then test drive a few before you sat down to talk about your preferences in detail - you’d be making a far more informed choice. 

For the seller, they would know that they were now talking to a buyer who a) had clarity about what they needed b) understood what was on offer to them and c) felt that their needs had been met early on in the process. 

If we apply this methodology to our own qualification processes - we can build a stronger pipeline, with better-qualified opportunities and happier, more engaged prospects.