In this series of blog posts I write about our mission to run the highest performing revenue engine in the SaaS industry. This mission started with one simple question, “Why are the demand generation results running 23 percentage points higher than revenue production?” My last post was about setting pipeline targets and how our CMO, Brian Kardon, did not want me to feel all alone in the sport of management “bomb dropping” so he proposed everyone in marketing be paid on our Sales Qualified Lead (SQL) target. Now, inside Eloqua, there is one corporate pipeline with agreed-upon metrics that the entire revenue engine is gunning for. And it is a key expectation – not delivering is not an option.
With the pipeline targets set we were off like Doc and Happy, a couple of the Seven Dwarfs, singing Whistle While You Work as we set about cajoling the sales force to own their forward pipeline – Oh snap…
I don’t know about your sales organization, but ours is great at owning the forecast. We can describe it in all sorts of ways – we compare it historically, evaluate the personality of each sales rep (who has happy ears?), stare at the position of Mercury in the night sky (is it in retrograde?) and even decompose it using the Fibonacci sequence. We look at so many reports and pieces of paper we could soak them in vinegar, pulverize them and feed Ms. Simpson’s third-grade science class all the fiber they need for a week. We know the forecast and we have a religious conviction that if we look at it more closely it will go up. “What? Not forecasting your plan? Let’s have another forecast call!”
But the pipeline? Look beyond this quarter? Plan for the future? Take action today for a result next quarter? This was a non-sequitur. One of the toughest parts of making the number on a continuous basis is that you must know how you will make the number today and tomorrow. We started with the simplest of steps. We established a cadence that separates the pipeline from the forecast. Why? There is no good news in a forecast meeting. If your forecast falls apart I look at you like, “Have you always been stupid or did you take a stupid pill on the way to work today?” If you close something you forecast – well I might forget to thank you – heck you were just doing your job. No coaching happens in a forecast call. But pipe saves lives.
So we set up pipeline reviews. Between sales and marketing we established a reporting mechanism that, at any point in time, gives us a view of the value of the forward pipeline – at a territory level. But even more important than value is quality or movement through the pipeline. Oh yeah, and shape. One view of the truth … one view of size, shape and speed is the holy grail of the combined sales and marketing pipeline. In other words: that thing called Revenue Performance Management.
The cadence was in place, the meetings were happening and folks started seeing into the future like the Amazing Kreskin. That is when the dam burst with the plaintive cry of the Tribe of the Small Pipeline, “Hey! Who is going to build my pipe?”