We’ve all heard the truism “you can’t improve what you don’t measure”, from Peter Drucker riffing on a Lord Kelvin quote.

Pipe Dreams and Real Results: Using data to convert your pipeline

We’ve all heard the truism “you can’t improve what you don’t measure”, from Peter Drucker riffing on a Lord Kelvin quote.

We’ve all heard the truism “you can’t improve what you don’t measure”, from Peter Drucker riffing on a Lord Kelvin quote. So often, we’ll measure what we think we’re supposed to, put the data into a pretty chart for the weekly/quarterly update, present to the board, rinse, repeat. 

And yet, a year later there are still complaints that the deal cycle takes too long, the win rates are too low, the churn rate too high. 

There are a million blog posts about what to measure, how to measure and what they mean. And some fantastic tooling to automate and make easy. That was my first version of this post before I realised I couldn’t say it any better than what’s already out there so why bother.

Instead, let’s start with a few problems you might be facing, what you should start measuring and how you can use that data to experiment, tweak and change your approach to resolve. 

Problem one: Deal cycles are too long

To be fair, I haven’t spoken with a founder or sales leader who is happy about how long their deals take. But when digging into this problem, a few reasons this might be become pretty clear. Obviously strategic enterprise deals are going to have a longer sales cycle than smaller tactical deals but the basics remain the same. There are four reasons this may be:

  • It’s not an urgent enough problem, or you don’t really understand the true problem
  • The team is not selling high enough in the account or wide enough, they only have a few points of contact
  • No compelling business case mutually put together and agreed
  • No Economic Buyer or Champion engagement until late in the engagement

If you don’t really understand the problem you solve and who you solve it for, if you aren’t speaking with the people who own that problem, or who are empowered to make changes you’re going to spend an awful lot of time trying to ‘convince’. The higher you are in the account the more you should be able to deeply understand not just the challenge but more importantly, the impact of this problem on the business. 

Getting to, and knowing what’s a priority for the Economic Buyer early is imperative. I’ve had teams (yes, I’ve made this mistake) where they spent months absolutely assuring me that they were going to close a deal, only to have the paperwork land on the Economic Buyer’s desk and it wasn’t even in the top 5 of problems that she needed to solve. Not to mention, we pissed her off because she felt the team wasted time on this instead of what needed to be done. I promise you I haven’t knowingly let this happen again. (Sorry Caroline, who I won’t link but you know who you are!). This is why it’s so critical to get high up in the account; what matters to the senior executives are the priorities, not problems that might just impact more junior team members who are happy to speak with you, but will never get the sign-off..

Your deal is also going to stall if the prospect doesn’t fully agree about the size, urgency and scope of the issue. Throwing stats at them like ‘this will save 30% in hiring costs’ doesn’t mean anything until you sit down, work mutually with your Champion to build a bulletproof case study with numbers they buy into. Immature reps think a business case is creating something to send over. There isn’t a CFO in the world who accepts that. If you don’t have a business case you’ve mutually agreed on, they’re working on something entirely different internally that probably isn’t as compelling. Trust me on this.

What to measure

  • For previous deals won, what was the deal cycle? Not from first contact, but from the time a Champion was confirmed and tested.  
  • For past deals closed won, at what point were the Economic Buyer and Champion engaged and confirmed and what was the full deal cycle time in total from those points.
  • When was a mutual business case agreed (or not) and the measurement of the time from then to close.
  • I’m going to assume that the prospects are in your ICP, right? Look at those closed/won deals who exactly fit your ICP v those who don’t. What were the deal cycles there?
  • How many points of contact did you have in the prospect, and how many different separate points of contact are there with members of your own company?

Things to test:

So let’s set some experiments we can enact to test what the root cause is so we can fix this. 

1. Give this a try for at least a quarter or two: Don’t count any deal as ‘qualified’ until it’s past the Discovery stage. No exceptions. And to move past that point there has to be a Champion engaged (and confirmed) and knowledge of who the Economic Buyer is. You can put gates into your CRM.

At YuLife, we have made a major change to what we consider qualified pipeline. For a deal to go into the pipeline, we expect every rep to have a pain, characteristics of a champion and they have to know who the economic buyer is - all logged in the CRM. When a deal gets moved into qualified pipeline, our managers and RevOps team get notified and a deal review is setup either that week or the following week to ensure we are confident that this is  a real deal. This has drastically improved our win rates and we are able to forecast much more accurately much earlier on in the quarter. 
We repeat this process as the deal progresses through key milestones in our sales process. For example, after pain and champion, in order to get to the next stage, we expect our reps to quantify the pain with their champion and agree baseline metrics for the “as is” and “future state”. We know that if there isn’t a big enough pain we can solve that links back to cost, risk or revenue, then we will find it hard to drive urgency in the deal and get in front of the economic buyer with a clear message.

Shay Khosrowshahi, Head of RevOps, YuLife

I know this sounds obvious but you’ll be amazed when you dig in how many deals in later stages are still guesswork. See previous article about Deal Reviews for how to get rid of the guessing. Then check the deal cycle from this stage until closed. I bet you’ll look at your pipeline differently. It will be lower, but it will also be far more accurate. 

2. Validate that you are speaking with senior people at the prospect. 

If the problem is really acute enough, they not just will but will want to be involved, it’s their problem to solve and results to own. Align senior executives at your company with the same peer there. See where senior execs in your current happy clients have connections and ask if you can use their name as an example of how you’ve made a positive impact. More junior people will have the time to spend with vendors who they’ll never buy from. Senior people won’t.

3. Do some serious sales enablement about how to build a business plan together with your Champion. 

This can be done with internal experts, your CFO likely can help talk through this, or bring in outside expertise for training. But do the work, make sure your team fully understands the parameters to be impacted, how to put the business case together with your Champion, and how to ensure that there’s buy in.

Work with your Customer Success team to get actual metrics for your clients on what uplift/savings/impact you had so you can do like-for-like estimates by vertical. Many top companies have whole value engineering teams–that’s a huge investment and at this stage for you is probably unlikely–that’s okay. But invest in how to do this right, and hold firm on not even starting to negotiate until a business case is agreed.

4. Prioritise heavily the deals in your ICP. 

You only have so many hours in the day–spending any time with endless ‘just checking in’ emails is a waste of everyone’s time, and false ‘if you close by the end of the quarter we’ll discount 10%’ makes everyone roll their eyes. Focus on the companies that you know you can and should and want to win.

5. Ensure you have multiple touchpoints at multiple levels.

Set a challenge that every deal larger than $X must have multiple points of contact not just in the prospect but with your company. The Solution Engineer has to have a direct relationship with someone technical, an executive is engaged, someone from Customer Success is in touch with their teams on rollouts, etc. It’s amazing what you learn when you allow different conversations to happen.

6. Understand the problem, inside out.

This is going to sound obvious but it’s terrifying how few companies can really articulate what challenges their ICP face in simple terms. Deeply understand the real problem your target customer faces, your solution solves, whether your prospect is facing that and what the impact is on their business as a result. Look through their annual reports and investor statements. Search for interviews from their senior execs. See where their competitors are focusing efforts, chances are they’ll be facing some of the same issues.

Put that into 100% jargon-free statements. No ‘silos’ or ‘optimising’ or ‘holistic’. What do you enable, how are your customers’ work-lives better and what is the ‘so what’. Now, take this information and build into the entire sales process from your initial contact where you posit an issue they are likely facing, through the discovery digging deeper into their real issues and impact to the business, into the demo where you show how you solve it. 

If it’s not a big enough problem, I hate to be the one breaking it to you but they are going to spend more time on the bigger fires and nothing is going to shorten the cycle.

Problem two: Win rates are too low

You might have a massive pipeline (I know I’m supposed to say that’s a good problem to have, but if the pipeline isn’t qualified or is garbage it’s actually a worse problem. Your teams will spend too much time trying to close deals that will never close instead of focusing on getting to new right prospects). But, assuming you have a decent pipeline in size and quality the issues could be:

  • Messaging: you aren’t communicating in a compelling and simple way the value of your solution;
  • Not differentiating: your prospects can’t tell the difference between you and your competition so default to price; 
  • Trying to sell on price, without establishing what the value is to the prospect; 
  • Not having and working with with a true, tested Champion; and
  • Not having enough of the right deals in play.

What to measure: 

  • Of the qualified pipeline for the past year, what percentage of deals do you win? See above and make sure you’re measuring win rates from the right point. The whole purpose of discovery is both to deeply understand the prospect’s problems, but also to qualify out those where you aren’t the best fit. The best reps are ruthless in this. 
  • When deals are lost, at what stage were they? Is this common across the whole sales team? Do particular reps lose deals more often at certain stages than others?
  • How many new qualified deals are brought in each part of the quarter.
  • Reasons for loss, without allowing price to be one of the factors. And to which competitor (or do nothing) did you lose.

Things to test:

1. Deeply analyse your pipeline activity and where deals are lost. If you haven’t already done this, I promise it will be extremely eye opening. Track this across the whole team, as well as individually by rep. 

If dropping in discovery, is it that they aren’t qualified to begin with or not in the ICP, in which case you need to work with the SDR and marketing teams on targeting? Or is the win rate then very strong after which means that your team is doing a great job with discovery at qualifying who is ready to move forward/qualifying out those who aren’t?

If dropping after the demo, you need to change how you present your solution to align more with solving the customers’ problems in the best way rather than focusing on your product. Demoing features is only interesting to you; demoing how the prospect can better solve their challenge by replaying what you heard in Discovery and showing how you address that is far more productive.

A client that I work with (Series A, RegTech, not a Notion Portfolio company) anecdotally assumed that POCs convert to deals at a higher rate than those prospects not trialling the product.  This led them to push as many prospects down the POC funnel as possible.  The results were not as intended:  conversion rates fell and sales cycle lengths increased.  Why?  Because not all prospects were serious about committing to the POC, which required more of our time and resources to manage.  This led us to develop a POC eligibility framework where we qualified for eligibility, defined success criteria, and set clear expectations from the beginning.  The outcome of implementing this basic framework was a reduction in sales cycle length and an increase in conversion rate for those going through the POC funnel. 

-Rob Soffel, Notion RevOps Specialist

If losing after negotiation, has your team presented a strong enough business case earlier in the process? How can you equip them to be able to ensure the prospect understands and agrees with the value your solution will provide? See earlier about the business case.

2.Engage your marketing team to try running campaigns specifically at prospects in the later stage of the deal instead of just top of funnel.

3. Run deal reviews on your top deals, with not just you and the rep, but others in the business who might spot areas to improve. Someone in Product might hear a nugget that they can elaborate on, or that could easily be addressed.

4.Work with your team how to ask the right questions to define the Decision Criteria to be able to differentiate. Just asking what they are going to use enables an apples to apples comparison. You’re not an apple. If they aren’t valuing what makes you different, it wasn’t presented correctly, or it’s not really that important. Hint, it’s never just about price. You have to really really really understand the persona you are selling to, and what they care about. Speak their language, not jargon. If you can’t explain simply how your solution will then make what they do every day better, they won’t get it either. Spend a quarter doing non-sales interviews with the right personas to learn what their days look like, how they describe their challenges.

5. Create incentives for reps who have created a target number of new qualified opportunities. 

6. For the competition you most consistently lose to, without naming price, why are you losing? What messaging/positioning is resonating? Can you come up with discovery questions to ensure that your prospect is then convincing themselves that they actually need your solution rather than you telling them they need it? This is how you best differentiate.

Paddle is a good example of a company that invested heavily in getting confidence in their leading indicators for opportunities won. The problem they identified was that their deal cycles were long and they only had an indication on how they were going to perform towards the end of the quarter (which meant they couldn't do much if they were below the targets).

We discovered a high correlation between number of Conversations (which basically meant positive replies to cold outreach) and Opportunities Won, which we then started religiously monitoring (our key leading indicator). That way we could forecast early on our outlook for the quarter-end. This is especially important at the early stages of the quarter (where you can still have an impact). We were able to set the benchmarks on the number of conversations we were generating each week and intervene if the number dropped below what would typically be needed to hit our goals.  
-Aleksander Bury, Cofounder Goodfit.io,
Former Head of Commercial Operations, Paddle

Sequential not parallel: Build momentum by solving one or two problems at a time.

For startups, it’s impossible to fix everything all at once. Strike that, for any company it’s impossible to fix everything at once. But, if you’re measuring what’s happening in your deals, and know where the biggest problems are, use this insight to take proactive or corrective action. Set an OKR to devise experiments to fix one to two main problems per quarter and you’ll be amazed to see the progress you can make. 

I promise, it’s often the seemingly smallest changes that ultimately lead to the biggest breakthroughs, for example Rob’s POC qualification framework above or Aleksander’s conversation measurement. But you’ll never know where to start unless you understand where you are by putting in the effort to measure what matters, to to do this, you must have the lead and lag data that underpins every stage of the customer life cycle, from first contact to referenceability, as well as critical insights about time and volume of movement across each stage.

I’ve just outlined two possible issues here, but I know there’s a whole host that could be covered. And think how impressed your board will be when you don’t just show the same numbers again! What can Notion Capital do to help here, any ideas for experiments you want to run?

you also may like to read
you also may like to read

Get the latest from Notion Capital. Sign up to our newsletter.