Does the 5X pipeline mean a lack of trust in your deals?

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- September 7, 2019

Pipeline conversion is a recurring topic in revenue meetings at growing companies. It is a number used to determine various go-to-market programs, sales hiring, and business plans for the year. Nowadays, many sales leaders prefer to see a 5X pipeline, which means if the revenue goal is $20 Million, they want to see opportunities worth at least $100 Million in the pipeline.

Why the emphasis on a 5X pipeline?

Let’s say the sales process is an engine that takes “pipeline” as an input and produces “closed-won deals” as an output. The issue is that this engine can still be a black box for most growing companies. So the only way for companies to increase their output (closed-won deals) is by increasing their input (pipeline).

Sales engines usually resemble a black box at growth companies due to —

  • Varying degrees of win-rates in the past: Inaccurate or incomplete CRM data does not provide the right insights and trends required to focus on pipeline quality. With limited confidence in historical data, the priority instead is on building pipeline volume to achieve revenue numbers.
  • Focus on an activity-driven culture: Executive/sales leaders derive comfort when they see more actions and activities from their team. Reps then believe a massive pipeline —even if filled with unqualified or dormant opportunities— is positive, and this perpetuates the culture of stuffing the pipeline without worrying about its quality.
  • Unclear pipeline review process: Undercoached reps cannot differentiate or in worse cases intentionally misrepresent the deals to include in the pipeline. Managers are stretched thin due to lack of time and with limited insights, conduct inefficient reviews maintaining an opaque pipeline.  

The problem with creating a 5X pipeline

Rather than solving the inefficiencies in the sales processes (engine), the focus shifts to generating additional inputs. However, over time, these inefficiencies lead to a significant issue choking the entire sales process (engine), thus continuing the vicious cycle between an inflated pipeline and missing forecasts. Common inefficiencies that exist in such 5X pipelines are—

  • Lack of CRM hygiene which hides the reasons why we are losing deals and therefore takes away the focus on winning every deal.
  • Unclear sales progression process— when to do what? Lack of deal reviews leads to a lack of understanding of the nuances of sales progression. Things like security review, ensuring the project is budgeted, involving secondary decision-making teams, etc. get ignored.
  • Lack of efficient qualification process leading to junk pipeline creation and wasted resources.

How can growth companies improve the efficiency of their sales engine?

By using a sales intelligence platform like BoostUp.ai, sales teams can focus and overcome the above inefficiencies by bringing out actionable intelligence out of their sales data. BoostUp.ai collects information from CRM, emails, calendars, zoom meetings, LinkedIn, etc. and uses AI/ML technologies to mine and communicate the right signals. These communications get delivered via email alerts, slack messages, voice alerts like Alexa skills, and an intuitive web app that is perfect for field teams.

Sales and sales operations leaders love BoostUp.ai because they find actionable intelligence in their current deals within 24 hours of using it.

If you would like to see a quick demo or do a trial using your existing data, please reach out at demo@boostup.ai.