Playbook for managing pipeline in today’s market
As I mentioned in part I, pipeline is the lifeblood of any SaaS sales operation. Let’s dive into what you as a founder should be doing to manage the health of your pipeline in today's economic environment.
Watch your data closely to see shifts
During an economic downturn, markets shift quickly and prospective customers' health can turn on a dime. The previous status quo of tracking metrics on a quarterly or monthly basis won’t cut it when things are changing so rapidly.
Due to today’s market instability, keeping a more frequent watch on your critical business metrics is important. We’ve been recommending to our portfolio founders that they start tracking metrics on a weekly basis to stay close to their most relevant leading indicators. .
For example, for each lead source type (e.g. email marketing, paid ads, organic search, etc.), we recommend tracking:
- Conversion rate by stage
- Time in stage
- Deal loss reasoning
By implementing really sensitive tracking mechanisms, you and your board will have a better understanding of what’s driving (or stalling) business so you can respond appropriately.
Get granular on customer segmentation
Once you have a sharper eye on your key pipeline metrics, you need to take a closer look at your customer segmentation. Go deeper than SMB, MM, and ENT and look at industries and buyers to get new views of your customers. Getting granular here will allow your team to focus energy on customers that will have the greatest impact on your pipeline health and revenue.
Here are some questions about your segments that you probably did not have to consider during a bull market:
- How likely is this customer segment to be affected by a recession? Some industries are more recession-proof than others (insurance, security, etc.). How volatile is the customer’s budget?
- Is your product value proposition focused on reducing cost or enhancing revenue? During a downturn, it is easier to sell a cost-cutting rather than a revenue-enhancing product. You may find that your product could be positioned as both - so the way you message ROI may shift depending on which industries you are selling to.
- Is your product a “need to have” or a “nice to have”? Nice-to-haves are a lot less likely to convert in this market.
Since most SDRs and many AEs haven’t sold during a downturn, you’ll want to educate and instruct them on how to uncover more granular information about potential leads. Look at past successful deals in these more granular segments and look at patterns for why they bought and what made them successful.
Redirect your focus
Time is precious in this kind of environment and it may no longer be efficient to attack all customer segments. Now that you’re armed with more data and granularity around successful segments, it’s time to redirect your focus on the segments that have the greatest opportunity to convert. This can mean deprioritizing segments that perhaps used to make up the majority of your business, which can be scary, and focus instead on others that are more resilient to a downturn, even if this requires entering a new industry, or focusing on a sub-segment that you previously had not paid much attention to.
For example, from our experience, some industries tend to be somewhat recession-proof. These include (but are not limited to) insurance, healthcare, and security. Do you have any customers operating in these segments? If so, it is worth it to spend time to understand their pain points to refine your messaging to best address these segments.
We understand that redirecting focus isn’t always possible from an industry perspective so just focus on finding resilient sub-segments that will continue to generate revenue for your business. By honing your focus on the highest impact segments, your pipeline health will improve and, hopefully, your revenue will too.
Parting advice for founders
Founders, here’s my parting advice for you to ensure a healthy pipeline in today’s environment:
- Conduct weekly pipeline reviews with your sales leader.
- Pressure test any deal in pipeline to determine if it’s a real opportunity. Get clarity on what the prospect is currently using and why they might want to change from that solution.
- Identify the signals that might indicate a change in the progress of every opportunity (positive or negative). Some signals include a deal pushing from the ordinal close date, buyers missing or canceling meetings, an increase in the time an opportunity spends in each stage of your buying process, and a drop in product usage.
Tested any of these strategies? I’d love to hear from you: email@example.com.
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