If you work in marketing or sales, you've probably heard the dreaded phrase, "We need pipeline now." It's a mantra that echoes through boardrooms and Slack channels alike, often igniting panic rather than productive action. But is chasing pipeline volume really the best strategy for sustainable growth? Let's dive into why focusing solely on pipeline quantity might be doing more harm than good and how you can steer your team towards more effective practices.
Marisa Kacary, a seasoned marketer in the B2B recruitment space, shares her insights:
“Pipeline is great, but quality pipeline and weighted pipeline is far more important than just pipeline as it stands.”
Marisa highlights a common misconception: bigger pipelines don’t always translate to better results. It's not just about having a lot of prospects in your pipeline, but ensuring those prospects are qualified and have a higher likelihood of converting into paying customers.
Ollie Sharpe, VP of Revenue at Abacom, adds:
“If you're filling your pipeline with things that you've got 0% of chance of closing, it's a vanity metric just to go, yeah, we've got five X, but really we could do the same amount of revenue with three X.”
Ollie emphasizes that blindly chasing pipeline volume can lead to wasted resources and missed opportunities. The focus should shift to generating quality leads that are more likely to convert, thereby making the pipeline more efficient and effective.
Many organizations operate under the assumption that they need a pipeline five times their revenue target to achieve success. However, Marisa points out:
“In my sector, deals can take up to 18 months to close and often cost up to half a million dollars worth of sales time. So, the idea of you've got to have five times revenue is a scary one.”
This industry norm doesn’t fit all sectors. In areas with long sales cycles and high deal values, the required pipeline multiplier can vary significantly. The key takeaway? Tailor your pipeline targets to your specific industry and sales cycle rather than adhering to a one-size-fits-all metric.
One of the root causes of the "We need pipeline now" pressure is misalignment between sales and marketing teams. Marisa explains:
“Sales teams are targeted on revenue, whereas the business is focused on profitability. That sort of metric isn't quite aligned.”
To bridge this gap, constant dialogue and collaboration between sales and marketing are essential. Ollie suggests:
“Sales and marketing should be working together. It is about making sure that sales and marketing are aligned and they're in this as one team.”
When both teams share common goals and communicate effectively, it’s easier to focus on quality leads that drive profitability rather than just increasing the number of prospects.
Leadership often drives the urgency for pipeline growth without fully understanding the underlying mechanics. Ollie advises:
“Educate them on how pipeline works, the lead time it takes to have an impact, and why we are measuring these leading indicators.”
By providing a clear picture of the sales funnel and the time it takes for leads to convert, marketing and sales leaders can help executives appreciate the importance of patience and strategic planning over immediate pipeline expansion.
Instead of reacting to pressure with frantic pipeline-building efforts, focus on strategic improvements. Ollie shares:
“If you can make marginal gains in your sales process, qualification frameworks, and market narratives, you can have a big impact on what pipeline you need.”
Small, consistent improvements in your sales and marketing processes can lead to significant long-term benefits, reducing the need for drastic pipeline inflations.
Both teams should strive to view pipeline-building as a collaborative effort rather than a transactional handoff.
The pressure to rapidly build a large pipeline can lead to misguided strategies and wasted resources. By focusing on pipeline quality, aligning sales and marketing efforts, and educating leadership on the nuances of pipeline dynamics, organizations can achieve more sustainable and profitable growth.
Remember Marisa's wise words:
“It's about the value of the activity and making sure that what you're doing is actually contributing to meaningful outcomes.”
So next time someone urges, "We need pipeline now," take a step back and evaluate whether quantity is truly serving your business goals or if quality and strategic alignment are the real keys to success.