Show Me Your Technical Funnel
Every business wants to be more predictable when it comes to bookings and revenue. So why do so many companies consistently miss their forecast? It’s because they’re overlooking their most insightful data.
Sales leaders will often talk about the importance of pipeline distribution. In other words, does the business have enough opportunity at each stage of the funnel to ensure the business hits their numbers. This tried and true approach is a good starting point, but unfortunately leaves companies coming up short time and time again, scratching their heads to understand why.
A big part of this is due to the fact that a typical funnel is time independent. This means you understand the number and amount of opportunities at each stage of the funnel, but there is no ability to understand how and why opportunities progress through the funnel at different rates.
In the sample below, we see a standard sales funnel at a given point in time. Most sales teams are trained to use crude ratios to attempt to project bookings through the funnel. Phrases such as “we need to maintain a 5x coverage ratio” are common. This means if the business wants to book $10M in ACV for the quarter they need $50M in ACV at the top of the funnel.