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Pipeline Coverage: How To Get Started Quickly

If you only report on leads and opportunities, you'll miss an important step of understanding how well marketing's work is turning into revenue.

Pipeline is a very important leading indicator of opportunity quality, and whether or not you're on track to hit goals later down the funnel. 

A lot of companies wait too long to start using pipeline. But you can (read: should) start as soon as you're driving leads/sending them to sales/owning a rev number. 

A simple model looks like this: 

• How much revenue do we need to drive?
  
  • $1,000,000
• What's your close rate?
  
  • If 25%, then you'll need 4x pipe coverage to hit $1,000,000 
  • If you don't have good data, use 3-5x as a first pass and adjust over time
• What's your ACV?
  
  • If it's $100,000, you need 10 deals closed-won, and 40 legit opps (sometimes it pays to inflate coverage here) 
• What % of revenue are marketing/sales agreeing to drive separately? 
  
  • If it's a 50:50 split, marketing needs to source 20 opps 
• What is your lead to opp conversion rate?
  • If 25% of leads become opps, you need to drive 80 leads

If this^ is for a quarter, divide into monthly goals:

These are all fake numbers of course, and each business will be different, but hopefully you can see here that it's not so hard to back into a model that will work. 

I know the argument against this: We don't have the data. Great - start collecting it today and you'll have enough information very soon to have a good handle on this stuff. 

In my experience, you can get a starting point with a month or a quarter's worth of data...and if you have to build your first systems in google sheets, it still works.

It can be infinitely more complicated: factoring in time-to-close, different close rates of different channels, etc etc. 

The main point is, just start somewhere. It's a new year, let it rip. 

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