The Joy Of Weekly Pipeline Metrics

Besides closed sales, do you know weekly how well you’re tracking towards making the month or quarter? What kind of predictive progress metrics do you track? Will it be a total surprise at the end of the quarter if you hit a wall and miss your number?

I’m a fan of tracking weekly or monthly pipeline progress metrics (how much was created, how much do we have, what is the quality of it?) If you understand your sales model metrics, you can tell weekly whether or not you’re likely to make or break the quarter.

Example
let’s say you’re a $30 million company that’s growing quickly. You have 50 quota-carrying sales reps. It’s January 2nd, with 12 weeks to go in the quarter that ends March 31. Your sales goal is $12 million, which is $2 million higher than you’ve ever hit before. You hope you can do it – but want to replace “‘hope” with metrics and progress reports so that you know immediately if you get off track and can course-correct quickly.

Here’s an example of calculating a meaningful weekly progress metric:
1) If the sales goal is $10 million in sales bookings this quarter…
2) And your close rate is 33% of open pipeline [assume this is blended between new customers acquired and upsell bookings of existing customers]…
3) Thus you need $30 million in pipeline about a ‘sales cycle length’ prior to the closing period. For simplicity, let’s assume your cycle is 30 days (don’t we all wish!) so we need $36 million in pipeline by March 1…
4) Another assumption: today, as of January 2nd, you have $28 million in pipeline…
5) Which means that to have a total of $36 million in pipeline, your team needs another $8 million over 8 weeks (by March 1st, 30 days before the quarter close)…
6) Which is $1 million per week…
7) Divided across 50 sales reps, is $40,000 in new pipeline per week per sales rep. As long as the sales cycles are similar, it doesn’t matter whether it comes from marketing, inside sales teammates, channel partners or the moon.

Resulting Weekly Progress Metric
Now you have weekly visibility into your progress towards the quarter. If the company doesn’t add $1 million in new pipeline per week overall, or each rep doesn’t get $40,000, alarm bells should start going off.

“Progress Metrics” vs. “Activity Metrics”
Pipeline created per week is just one example. You might need to measure pipeline upgraded past a certain stage, or only new customer pipeline, or…whatever is most relevant to your model. I would pay attention to activity metrics as well (number of ‘call-connects’, appointments, quotes…), but those kinds of metrics don’t tell you whether or not you are making progress to your goal this quarter. They can complement, but do not replace, progress metrics.

Increasing Visibility Even Further
The better you understand the cause-and-effects of your model and progress metrics, the earlier you can begin to forecast and deal with issues. For example, let’s say you know that 20 new inbound leads in one week reliably leads to 4 opportunities worth a total of $100,000 each in the following week, and then two closed opportunities 30 days later for a total of $50,000.

Now assume the leads drop by 50% one week. You should see only half as much pipeline ($50,000) the following week as you would normally get, and half as much in sales 30 days later ($25,000 instead of $50,000).

Of course, people aren’t static, and if leads drop one week then salespeople will try to find a way to make up the difference, but you understand my point. The further in advance you can forecast and identify blips in your growth, the more time you get to try to deal with them before the end of the quarter or year.