Joe Galvin discusses key findings from a SiriusDecisions/Cloud9 study on linking pipeline analysis to sales productivity. The study found that companies with a pipeline-to-quota ratio of 3x or less had higher close rates and more reps meeting quota than those with ratios over 4x. Maintaining a qualified pipeline focused only on winnable opportunities, rather than artificially inflating pipeline values, leads to better sales performance. Measuring the opportunity lifecycle through factors like conversion rates, cycle length, and revenue provides insights to target sales enablement initiatives for greatest impact.

1. SOLVING FOR ‘X’:Pursuit of the Perfect PipelineJoe Galvin, Vice President and Service DirectorSales Optimization Strategies December 7, 2010

2. Executive SummaryKey issuesA focus away from pure demand creation and toward sales execution is neededWithout the right data, diagnosing sales enablement gaps is guessworkThe art of the possible has been replaced with the science of the possible – we need to changeWhat you will walk away withResults from SiriusDecisions/Cloud9 groundbreaking study on linking pipeline analysis with sales productivityIdeas, tactics and action items you can use to better enable sales productivity in your organizationNew ways to measure sales productivity Source: SiriusDecisions2

3. AgendaSiriusDecisionsBrief IntroductionPipeline DynamicsThe Concept of the “Perfect Pipeline”Pipeline Survey DataWhen Less is MoreMeasuring Sales ProductivityUsing Pipeline Analytics to Target and Measure Sales Enablement Initiatives 3Joe GalvinVP & Service Director SiriusDecisions, Inc. Tel: (203) 665-4018Twitter: @JoeGalvin

4. Effective decision making today requires…Demand Creation ProcessSales and Marketing IntegrationNew IdeasNew TrendsBudget ComparisonInside Sales StructureMarketing PerformanceSales OptimizationSales TrainingChannel ManagementChannel MarketingOrganization StructureReputation BuildingMeasurementMarket Requirements

5. SiriusDecisions Offering Architecture5

6. Advisory ServicesExecutive EdgeCMODemand CreationStrategiesProgram DeliverablesReputation ManagementStrategiesInterfaces Receive:Access to benchmark data

7. Analyst inquiry

8. Monthly research briefs

9. Core Strategy Reports

10. Executive peer roundtables

11. Monthly research webcasts

12. Annual assessment

13. Research portal accessAdvisory ServicesSales OptimizationStrategiesChannelManagementStrategiesMarketingOperationsStrategiesProduct Marketing /Management Strategies6

14. Sales Optimization Strategies: 2010Research TopicsSales Strategy and StructuresSales Coverage ModelsInside SalesResource Allocation/CostSales ManagementSales OperationsPlanning and AnalyticsQuota AllocationSales CompensationTerritory ManagementSales MetricsSales ProductivityPipelines/ForecastExpense/RevenueSales Cycle/Deal sizeSales and Marketing AlignmentLead ManagementSales ReadinessSales CommunicationsSales TechnologySales Force AutomationProductivity ApplicationsCRM VendorsDeployment/AdoptionSales BenchmarksSales OperationsCost of SalesInside SalesSales TrainingSales Skills/ProcessOpportunity ManagementSales Methodology VendorsSales Competency ModelSales EnablementKnowledge ManagementMeasuring EnablementCollaborationCustomer CommunicationsReadiness ApplicationsVendor Profiles

15. iCentera

16. Sant/Kadient

17. SAVO Group

18. ZoomInfo

19. Cloud9

20. ValueVision

21. Infomentis

22. Corporate Visions

23. InsideView

24. Xactly

25. Callidus

26. Alinean

27. Genius

28. Brainshark

29. Benchmark

30. Sales Operations Audit

31. Sales Pipeline BenchmarkLocation: The Fairmont Scottsdale Princess in Scottsdale, ArizonaDate: May 4-6, 20116th Annual Summit575-675 B-to-B Sales and Marketing ProfessionalsFor more information and to register please visit www.siriusdecisions.com or call Rebecca Barber at (203) 665-4003Save the Date!8

32. AgendaSiriusDecisionsBrief IntroductionPipeline DynamicsThe Concept of the “Perfect Pipeline”Pipeline Survey DataWhen Less is MoreMeasuring Sales ProductivityUsing Pipeline Analytics to Target and Measure Sales Enablement Initiatives 9Joe GalvinVP & Service Director SiriusDecisions, Inc. Tel: (203) 665-4018Twitter: @JoeGalvin

33. SiriusPerspective: A popular strategy for selling in the down economy was to increase the pipeline revenue value to goal ratio SuspectQualifiedSolutionCloseNegotiate10%25%50%99%75%Selling in Down Economy: The Great RecessionForecastPipeline: Quota3:1, 4:1 5:1 or N:1?$1.273$987$632$256$125PipelineSource: SiriusDecisionsSiriusDecisions Research Brief: “Pipeline to Quota: Is Three-to-One Done?”1010

34. SiriusPerspective: The disconnect between sales and marketing is exacerbated by their very different measurement approaches.SpctQlfyPropSolDemoSelling Cycle10%20%33%75%50%Sales and Marketing Disconnect: Pipelines and WaterfallsInquiriesSalesMarketing Contribution? Original Demand Gen?Quality of Pipeline?Where to Help?MQLSALSQLMarketingContribution to Pipeline?Revenue Contribution?Targeting Enablement?Pipeline Acceleration?ClosedSource: SiriusDecisionsSiriusDecisions Research Brief: “The Facets of Forecast Management”11

35. SiriusPerspective: To drive collaboration, sales and marketing need a common, integrated view of opportunities and their attributes.SpctQlfyPropSolDemoSelling Cycle10%20%33%75%50%Opportunity Lifecycle ManagementDemand CreationIntegrated PipelineInquiriesQualified Opportunity (SQL)SalesProductive ProspectingTargeted Marketing Enablement AlignmentLifecycle TransparencyMQLDevelop SolutionSALDemonstrate ValueSQLMarketingMeasured ContributionMQL RevenueClosed LoopTargeted EnablementProposeClosedCloseSource: SiriusDecisionsSiriusDecisions Research Brief: “The Case for Building a Productivity Pipeline”12

36. X-Ray vs. MRISiriusPerspective: Sales and marketing need a more complete view to diagnose what’s really happening in the opportunity pipeline.Traditional PipelineOne-dimensional view Conversion rates - Mkt Projected Revenue - SlsOpportunity Lifecycle PipelineMulti-dimensional view – by phase RevenueConversion ratesSales cycle lengthSuccess profilesSource: SiriusDecisions13

37. SiriusPerspective: The opportunity lifecycle is measured by volume, revenue, conversion rates, sales cycle and buying phase length.Pipeline Dynamics: Opportunity Lifecycle Visibility14Top of the PipelineIdentifies sources of opportunityConversion RatesMeasures quality (effectiveness)Cycle LengthMeasures effort (efficiency) Closed Loop RevenueProvides opportunity lifecycletransparencySource: SiriusDecisionsSiriusDecisions Research Brief: “Leveraging Pipeline Milestones to Drive Productivity”

38. SiriusPerspective: Increasing the number/value of pipeline opportunities does not have a linear effect on decisions won.Solving for “X”4, 5 or 6:13:1X = (C x C) x V X X Capacity: Number of active opportunitiesConversion: Percentage of active opportunities that closeVelocity: Sales Cycle LengthSource: SiriusDecisionsSiriusDecisions Research Brief: Harnessing the Power of the Pipeline15

39. SiriusPerspective: Intense adherence to the success criteria and qualification phase means only winnable opportunities are pursued.Pursue the Perfect PipelineQualified Opportunity (SQL)2. QualificationAdvance only the opportunities that align with the success profileDevelop Solution3. ExecutionNo time, energy or resources wasted on unwinnable opportunities that artificially inflate pipeline values to satisfy arbitrary 3:1 ratiosDemo ValuePropose1. AnalysisEstablish “Success Profile”: the DNA of Wins: demographics, source, value, activities and velocity4. New Metrics for a New Age CloseSales Capacity: Number of active dealsSales Productivity: Net new active opportunities Average deal size Average sales cycle lengthPipeline Benchmarks: How well you sellSource: SiriusDecisionsSiriusDecisions Research Brief: “The Pursuit of the Perfect Pipeline”16

40. SiriusDecisions/Cloud9 Survey on Forecasting/Pipeline Best PracticesBusiness-to-Business Sales OrganizationsLooking to what, why and how companies measure their pipelineSplit findings into two groups: those that manage pipeline to quota of 3X or less, and those that manage 4X or higherWave II survey is still active:www.siriusdecisions.comInitial phase of the Pipeline Genome Project17

41. 2010 Pipeline/Forecast Best Practices SurveyCompanies that manage a pipeline of 3X or less had a32% better close rate. 18Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010

42. 2010 Pipeline/Forecast Best Practices SurveyWe asked what percentage of your reps were at quota or better?1957% of companies at3X or less had 60% or more of their reps at quotacompared to only 36%for4X or higher.Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010

43. 2010 Pipeline/Forecast Best Practices SurveyCompanies that manage a 3X pipeline or lesswere more than twice as likely to use a third-party pipeline analytic tool 20Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010

44. 2010 Pipeline/Forecast Best Practices SurveyOver 20% of companies that manage a 3X or less pipeline reported that they had the ability to report on their pipeline with flexibility.21None of the companies managing a 4X or higher pipeline reported they had flexibility in managing their pipelines.Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010

45. Sales Productivity: At the Top of Leaders’ MindsSiriusPerspective: Sales and marketing leaders have recognized that what got them here won’t get them “there.”ActivitiesProductivityPipelineSalesProductivityOpportunity BreakpointEfficiency(time & energy) How do I get there?How do I do that?Effectiveness (quality & results)22

46. SiriusPerspective: Increasing the productivity of salespeople results in more high-quality customer interactions. ActivitiesHow much time and effort does it take to…Find a prospect Create a solution Craft a proposalIncreased ProductivityMore OpportunitiesShorter Sales CyclesLarger Deal SizeHigher Win RatesProductivityProcessSkillsToolsEfficiency (time & energy)What is the quality and customer relevance of…Suspect touches Prospect interactions Client relationshipsKnowledgeEffectiveness (quality & results)Optimizing Sales Productivity23Source: SiriusDecisionsSiriusDecisions Research Brief: “Productivity: More Than Just the Topline”

47. Power of Pipeline Dynamics: Pipeline Intelligence24SiriusPerspective: Identifying an “opportunity breakpoint” targets sales and marketing initiatives where they will have the most impact.Demand CreationMarketingSales EnablementSales PlaybooksSME ResourceMessagesSales QualifiedOpportunitySolutionOpportunity BreakpointDemoSalesSales ActivitiesSkill DevelopmentProduct TrainingSpecialistsProposeCloseSource: SiriusDecisionsSiriusDecisions Research Brief: “ Productivity Benchmarking: Measuring How Well You Sell”

48. Pipeline Velocity is Really Decision VelocitySiriusPerspective: Look at what is happening with your Buyers’ Journey to understand where deals get stalled. SiriusDecisions Buying CycleDemandCreationSales QualifiedOpportunityOne: Loosening of the Status QuoTwo: Committing to ChangeSolutionThree: Exploring Possible SolutionsFour: Committing to a SolutionDemoFive: Justifying the DecisionSix: Making the SelectionProposeCloseSource: SiriusDecisions

49. Measure Sales ProductivitySiriusPerspective: A unified productivity pipeline measures effort and quality to establish productivity benchmarks and define action.26Recycle ZoneStall ZoneDays to ConvertQualifiedSolutionDemoClosePropose2828Selling Cycle252221SellingZoneOrderConvert Rate70%86%67%63%80%20%28.5%33.3%63%50%Close RateSource: SiriusDecisionsSiriusDecisions Research Brief: “Better Forecasting Through Factual Factoring”

50. Thank YouSiriusDecisionsBrief IntroductionPipeline DynamicsThe Concept of the “Perfect Pipeline”Pipeline Survey DataWhen Less is MoreMeasuring Sales ProductivityUsing Pipeline Analytics to Target and Measure Sales Enablement Initiatives 27Joe GalvinVP & Service Director SiriusDecisions, Inc. Tel: (203) 665-4018Twitter: @JoeGalvin

51. Recommended ResearchPipeline to Quota: Is Three-to-One Done?The Facets of Forecast ManagementThe Case for Building a Productivity PipelineLeveraging Pipeline Milestones to Drive ProductivityHarnessing the Power of the PipelineThe Pursuit of the Perfect PipelineBetter Forecasting Through Factual FactoringProductivity: More than Just the ToplineProductivity Benchmarking: Measuring How Well You SellBetter Forecasting Through Factual Factoring28Source: SiriusDecisions

52. SOLVING FOR ‘X’:Pursuit of the Perfect PipelineJoe Galvin, Vice President and Service DirectorSales Optimization Strategies December 8, 2010