Pipeline Management

You’re reading an excerpt of Founding Sales: The Early-Stage Go-To-Market Handbook, a book by Pete Kazanjy. The most in-depth, tactical handbook ever written for early-stage B2B sales, it distills early sales first principles and teaches the skills required, from being a founder selling to being an early salesperson and a sales leader. Purchase the book to support the author and the ad-free Holloway reading experience. You get instant digital access, commentary and future updates, and a high-quality PDF download.

Now that we’ve talked about what a trip through the funnel looks like for any given opportunity, how do you manage a few dozen of them at once? Depending on the length of your deal cycle, and your average contract value, you can imagine working between a dozen, 50, even up to 100 deals concurrently, each spanning 30, 45, 60, or maybe even 180 days from beginning to end. This goes back to one of the most jarring things about selling for the first time: trying to manage that many concurrent threads, and herd those cats toward a finish line, is a shockingly large adjustment from non-sales work.

And while a holistic rundown of how best to manage a pipeline could be a chapter unto itself, these are some general guidelines.

Pipeline Staging

One of the most important things in enterprise sales is having control of the deal and knowing, truthfully, the state of the opp. The first step here is obtaining the information by asking good, direct questions, whether at the top of the funnel in qualification, or further down the funnel as you’re pushing an opportunity toward completion. But the second step is ensuring that you’ve recorded that information in a way that lets you easily report and act on it. One of the most important parts of pipeline management is deal stages—making sure each opportunity is tagged with the specific step it’s currently in. That will signify to you how far a deal is from the finish line and, relatedly, how likely it is to get across it.

As your go-to-market evolves, you’ll start figuring out the specific steps that are required in your sales process. For example, your product may require a security review that comes after getting all the sign-offs necessary from the relevant stakeholders. So that would be a stage. Or you might need to do stakeholder interviews with others who are impacted by your solution, even if they are not responsible for the decision. That would be a stage too.

​caution​The important thing is that your stages have crisp definitions and always mean the same thing to you and to anyone else who is using them (our eventual sales reps). Be careful if your CRM, like Salesforce, comes with a generic set of stages (for example, Needs Analysis, and so on) and associated close percentages (which, at your stage of selling, are pretty silly). Those aren’t super helpful and could distract you from defining your own solution-specific stages.

Each stage was associated with specific criteria. Seeking Approval was used when pain was validated, and the stakeholder that we were engaged with was interested in proceeding, but there was another stakeholder whose permission or involvement was needed and was being sought. Sent Proposal meant that the prospect had specifically requested a proposal to consider pricing options and that the next step was an up or down decision (or negotiation).

Negotiation meant that we were negotiating price, but that all other hurdles had been passed. The relevant stakeholders had bought in, and it was just a question of agreeing on a price and terms.

Verbal Agreement meant that the prospect had agreed on a pricing option, and that we needed to send a contract. Things should not have been in this stage for long. But it was useful when an agreement showed up in the rep’s email, and he didn’t have the 15 minutes to send off a contract just then because it was the weekend and he was away from his laptop, he was about to hop into a demo, and so on.

Contract Sent is pretty damn clear, but it also meant that those opportunities should be watched like a hawk. The prospect had agreed to a price, we’d sent them a contract to sign, and now it was a matter of crossing our fingers and toes that they signed it.

And of course Closed-Won meant that the contract had been signed and that prospect was now a customer for the term of the contract. Closed-Lost meant that we’d decided the sale was not going to happen on that pass through the funnel.

Closed-Unqualified was a special case for opportunities where we should never have done a demo to begin with, because it turned out that the account didn’t have the need for our solution. We would pay close attention to these to figure out what we’d done wrong to end up doing a demo for an account that could never buy—which of course is a terrible waste of sales time and cause of prospect irritation!

Qualified was for opportunities where the demo had been done, and there was some indeterminate next step that wasn’t better captured by any of the other stages (Seeking Approval, Sent Proposal, and so on), like when the prospect needed to “think about it” or “talk with my team.” This stage usually was a catchment basin of cats and dogs that needed better next steps and that I should have done a better job with specific modeling criteria.

Across the board, these probably could have been better, but they were a good start. As noted, your go-to-market may have more involved, or maybe less involved, stages, and you’ll tune them over time. But the important thing is to have stages and to make sure your opps are tagged as best they can be—not only because this allows you to quickly scan them, and remind yourself which needs what action, but because it’s crucial for your reporting. CRMs have helpful features like Time in Current Stage, so in your pipeline report you can see, for instance, opps that have been in Contract Sent for nine days. WTH? Better see what’s going on there, because there’s no reason a contract should be hung up that long!

While stages are important, one of the best ways to make sure that a pipeline doesn’t go sideways is to follow the approach documented previously regarding explicit next steps. At each stage, there should be an explicit next step, it should be captured in your CRM (“Reconnect with Brian on his team’s feedback” or, “Do group demo for Susan’s reports”), and, most importantly, there should be a calendared time for that action to happen. Pipelines get out of control when there’s no explicit next step, and also when there are specific next steps but no clear time and date for when to complete them.

Pipeline Cadencing

Successful selling is managing a rolling set of opportunities, each at a different stage and out of sequence with the others, with some dropping out of the funnel as won and others as lost, all while adding more to the top. It’s a lot of moving parts. So making sure you have a recurring cadence by which to loop across your pipeline and avoid dropped balls is key. This is why in more mature sales organizations you have recurring weekly meetings like a pipeline review or forecast call (the bane of many reps’ existences) as a forcing function to make sure that deals are not going sideways and that reps are on top of them.

When it’s just you, this is a two-edged sword. On the one hand, you want to make sure that you are on top of the deals that you’re working—you’ve spent so much time and energy getting them on the calendar, demoing them, and so on, squandering that investment would be terrible. On the other hand, you don’t want to create unnecessary overhead for yourself. This is why calendaring next actions can be so helpful. If you have meetings set to discuss the outcome of a prospect’s consideration of your materials, or to do a demo with her broader team, the good news is, they’re right there on your calendar—kind of hard to mess that up. Past-you compels future-you to have good pipeline follow-up by putting it on the calendar.

But for when you can’t do this, making sure that you have a set amount of time calendared for pipeline review is good. At TalentBin, I used to set two hours for the whole team in the later afternoon every Wednesday. Later, as you become more familiar with your go-to-market, you’ll start getting a sense of your natural carrying load—the number of opportunities you can support before you start dropping balls (which is not good, and typically signaled by a fall in close rates). At that point, you can start constraining the number of new opportunities you add to the top of your funnel. Maybe you decide that you’ll only do three net-new demos a day, bumping up to four if there’s something particularly exciting, to leave three or four other hours in the day for down-funnel follow-up meetings. Or maybe you’ll have a floating hour a day for pipeline execution, which you can move within the day or to the next day (adding it to the hour you had blocked for pipeline follow-up that day). But the point is, you need to block the time to do the work, or it won’t get done. And if it doesn’t get done, you’ll be wasting perfectly good opportunities.

Pipeline Prioritization and Cleaning

While allocating proper time for pipeline execution is a minimum requirement, there are definitely things you can do to make this time more effective. Generally speaking, it’s always better to work “close to the money.” When you’re reviewing your pipeline, start at the bottom, where you have contracts, verbal agreements (why haven’t you sent the contract yet!?!), or proposals out. Those have more invested in them and are further along and thus more likely to close; focus your time there first and foremost to make sure they’re in the state they need to be. Do you need to dash off a check-in email? Something else? Even among these opportunities, prioritize by the magnitude of the sale, crossed with the ease of closing. Sending emails and following up with a ~$10K deal may take the same amount of time as doing the same for a ~$30K deal. So make sure that you’re happy with the state of the ~$30K deal first, because it’s three times as valuable!

Once all those deals are in a clean state, start moving up your funnel. Are there any opportunities that don’t have a calendared next action? That aren’t “backstopped” with some sort of meeting? Fix those. Again, prioritize by value, focusing on whatever action will drive them to the next stage in the pipeline.

When it comes to cleaning your pipeline, it’s okay to be ruthless. Are there opps that are clearly stuck and need to be cleaned out? Can you send them a final breakup email (as discussed above), and see if they come back with a “No! No! We’re still good!” or otherwise kick them out? If you are honest about only having 40–50 hours a week for selling, the opp that’s sitting mid-funnel—with no future meeting on it, and a couple unanswered emails—is just taking up space for a juicy new deal waiting to enter your funnel. Don’t think of it from the standpoint of “But, but, but, I don’t want to lose it!” but instead “That little bugger is taking up room for a much more deserving opp. Out you go!”

There are a number of ways you can be more efficient in prioritizing and managing your pipeline. Reporting that ranks the opportunities by stage, and then projected revenue within those stages, can be good. You can also set up reporting that helps with error checking, like down-funnel opps (those in stages Seeking Approval, Proposal Sent, and below) that haven’t seen activity in seven days (for example, an inbound or outbound email, or a call over a certain amount of time). You want to also catch opportunities that have been stuck in a certain stage for more than, say, two weeks (these time intervals may change depending on the nature of your go-to-market) or opps that don’t have a future meeting calendared (or uncovered opps, as I like to call them). But these are all more advanced concepts. At bottom, if you have set time to review your pipe, and clean it in a prioritized, rigorous fashion, you’ll already be miles ahead of purely reactive salespeople.

Calendar Management and Early Role Specialization

Up until this point, we’ve been largely assuming that all of this work would be done by you, as an individual seller. We’ve occasionally referred to the notion of sales development reps who can help set appointments on your calendar, or a customer success function that takes a closed deal from you and runs with implementation. Even before you have a proper team, though, you can and need to be segmenting the work you’re doing into different roles and allocating your time accordingly.

As you’ve seen from all the various actions described above and, moreover, all the activities described in Early Prospecting and then Prospect Outreach and Demo Appointment Setting, this is a lot of stuff to do, and you only have those 40–60 hours in a week. How can you get leverage? Well, the first way is to make sure that you focus on good accounts with great qualification criteria, and to always ask them good qualification questions so you never let sludge into your pipe.

Calendar Management

But even if you’re being vigilant about only spending good time on good targets, and later good opportunities, how can you best allocate that time? Well, when starting out, before role specialization, a great way to make yourself more impactful is to split your calendar time into blocks and spend each one focused on a particular role. Allocate time in two-hour chunks to do prospecting—to find the 50 or 100 or 200 points of contact that you want to engage with—and another block of two hours to execute your initial outreach to those folks. Then block another two hours over here to follow up with those prospects. If you’re successful, you’ll likely have demo calls, follow-up meetings, and closing calls peppered throughout the week. In addition to making sure that you have sufficient prep and follow-up time blocked immediately before and after those meetings, make sure you have enough time set aside for top-of-funnel activity. And, of course, don’t forget to leave time for your pipeline cleaning and to follow up on opportunities that are already in flight.

As you organize your calendar, be mindful of what times are good for what activities. First thing in the morning is probably good for prospecting and initial outreach (or at least staging emails to send later for maximal open and response rates), as your prospects are just getting settled into their days. Whereas planning calls and demos for mid-day and early afternoon is typically a good bet, in that prospects allocate that part of the day to meetings. Lastly, the end of the day can be good for summary and wrap-up items, email follow-ups, sending deliverables that weren’t sent immediately after a call, and such. Be thoughtful about intra-week time management too. Mondays and Fridays seem to have high cancel rates for demos; people agree to a Monday call a few weeks out, then realize they’re slammed and cancel on you Sunday or Monday morning. Or they cut out early on Friday. Consider doubling up on prospecting and pipeline management on Monday and Friday instead. This is why field reps often push all their admin work out to Friday, when they’re back in the home office, so they can use the rest of the week for customer-facing engagement. This, of course, is naughty from a CRM-excellence standpoint, but potentially good from a time-management standpoint—assuming every single hour the rest of the week was used for customer-facing activity.

Early Role Specialization: Your First SDR

If you’re feeding your own pipeline with your own prospecting and appointment setting (in addition to doing all your own demos and down-funnel activity), that could absorb something like half of your time. So now instead of doing two or three demos a day, 15 a week, and 60 a month, maybe you’re doing just one or two demos a day. That means that instead of winning, say, ~$60K of ARR a month—20% of 60 opps at an average contract value of ~$5K—you’re at just ~$30K a month—20% of 30 opps. Wow, that really changes your economics. You’re not paying for as many engineers with that revenue anymore.

In this fashion, using the metrics above, a ~$50K sales development rep plus a ~$120K total cost account executive can drive something like ~$650K in revenue a year, while costing ~$170K—a 26% cost of sales. Or better, if it’s a ratio of one SDR to two AEs, you’re looking at ~$1.3M a year off of ~$290K in salary expense, or 22% cost of sales. This might be compared to a full-cycle rep that costs ~$100K driving ~$325K a year, a 30% cost of sales.

These examples start to reflect the language of scaling sales organizations (more on this later). I’m rehearsing it for you, though, so you can understand the power of making a “pitch and close” rep more effective by adding a wingman. In addition to making yourself more efficient now, you’re also starting to build a bench of talent to become AEs in the future. This upwelling strategy—hiring SDRs who pump opportunities onto the calendar of AEs, and who then become AEs themselves, while pulling their friends and colleagues into the org as new SDRs—can become an extremely powerful virtuous cycle.

For the purposes of early specialization, I always recommend that founders or single sellers get an SDR wingman as soon as possible. Once you can reliably set appointments for yourself, you’ve proved that it can be done. Get someone else doing the labor, using the materials you’ve built for yourself and your list of targets. Moreover, you can have her both doing the outbound and being much more immediately responsive to inbound lead response than you were able to be. Obviously this adds the complexity of now having to manage someone else’s performance, but this is probably a good thing. You’ll need to get your hands dirty with sales management sooner or later.

Managing the complexity of down-funnel opportunities is hard enough on its own. Add in the fact that you’re managing a few dozen of them, and it can feel completely overwhelming. Behind the mindset change to raw directness that sales begets, this multi-threaded project management is one of the hardest skill profiles to master. Even seasoned reps drop balls left, right, and center. However, if you’re able to be intentional and mindful about your down-funnel cadence following the advice above, you’ll be extremely well positioned to make the most of the opportunities that you’ve gotten this far and to get a good chunk of them over the finish line.

Once you’ve done that, you’ll have a whole new challenge to contend with: customer success. Thanks to the nature of SaaS, you can’t just sell a deal, send the prospect their login credentials, and touch base with them in a year to renew the contract. Instead, you’re going to be responsible for setting them up for success and then monitoring the achievement of that success over the length of the contract. We’ll cover more on this in the next chapter.

Further Reading on Pipeline Management

• The Transparency Sale (Todd Caponi)

• The Challenger Sale (Matthew Dixon and Brent Adamson)

• Triangle Selling (Hilmon Sorey and Cory Bray)