As B2B SaaS companies increasingly rely on leveraging marketing programs to accelerate pipeline and revenue, there is now a seat at the revenue table for modern marketing teams. However, to deliver a tangible impact on the bottom line, CMOs and growth leaders need to take a more disciplined, data-driven approach centered around pipeline growth planning.
Building an effective and comprehensive pipeline growth plan is now a strategic imperative if CMOs and growth leaders want their C-suite colleagues and board to truly recognize their contributions and impact on the overall growth of the business. But where do you start with your pipeline growth planning process?
- The strategic value of pipeline growth planning
- Cross-functional alignment is key
- Constructing an effective pipeline growth planning model
- Putting pipeline growth plans into action
- The role of the CMO/Growth Leader in driving alignment
The strategic value of pipeline growth planning
To set annual goals and targets that go-to-market (GTM) teams must deliver against, CMOs and growth leaders should consider building and consistently benchmarking their progress all year around against a well-thought-out pipeline growth plan.
When an organization commits their organization towards revenue/pipeline, CMOs and growth leaders can help quantify the ROMI (Return on Marketing Investment) by building and executing programs and tactics against such a plan.
Forward-looking CMOs and growth leaders recognize that pipeline growth planning is no longer just an annual budgeting exercise - it has become a strategic growth imperative.
This plan can help growth leaders prioritize all GTM campaigns across marketing, sales, and customer success teams so they can collectively deliver against required targets all through the four quarters in the fiscal year.
Industry research indicates that organizations that align marketing targets with sales pipeline goals and quotas see three times higher ROI and two times faster growth compared to those without structured quarterly and annual plans in place.
The reason is simple - pipeline growth planning enables you to tie marketing activity back to tangible goals around the number of sales opportunities needed to hit targets.
Cross-functional alignment is key
Of course, pipeline growth planning isn’t just a marketing exercise - it requires tight cross-functional alignment between marketing, sales, customer success, and finance teams to connect budgets and outreach activities to broader company goals.
But it starts with the CMO or growth leader bringing the voice of the customer and market trends to build out tangible models for pipeline and revenue growth.
The core requirement is to build out a pipeline growth plan as an internal GTM organization initiative around the overall company goals for achieving a specific SaaS revenue ARR over defined periods. Modern and agile organizations typically have annual goals tied to the revenue for the GTM teams broken out by their respective functions, ie: marketing, sales, and customer success.
As GTM teams evolve in their maturity model, it’s highly critical to have synergy across the various areas of focus from the inception to the day-to-day execution of the pipeline planning and development process.
The figure above presents a framework for managing and implementing a pipeline dev process, that can help drive top-down pipeline and revenue impact. B2B organizations that implement a well-thought-out process, combined with streamlined execution of GTM engagement programs, will be well-positioned to deliver seamless, integrated B2B go-to-market that exceed the organization’s business goals.
Constructing an effective pipeline growth planning model
Constructing an effective pipeline growth planning model involves bringing together key metrics across the lead volume, conversion rates, sales data, channel mix, and budget. For example, if the company goal is $10M in net new ARR, and marketing is responsible for 30%, that translates to $3M.
With an average deal size of $25k, you would need 120 new customers. At a 10% sales conversion rate, that means 1,200 marketing-qualified leads are required. Work backward to model out the programs required to drive that top-of-funnel volume.
Having the percentage contribution breakdown for the GTM functions can be used as the baseline to build out a performance layer into the pipeline growth planning. The percentage of contribution baseline would need to overlay with other key performance indicators such as Win rates, pipeline efficiency percentage, ASP, coverage multiples, and program budget $$.
- Win rates: The percentage of opportunities that successfully convert to closed business. Win rates provide context on expected conversion rates to factor into capacity planning.
- Pipeline efficiency percentage: The percentage of pipeline that actually closes as revenue in a given timeframe. Gives a metric for pipeline performance to inform capacity model targets.
- ASP (Average Selling Price): The average annual contract value of sales deals. Allows marketing to understand deal sizes when setting lead volume and pipeline goals.
- Coverage multiples: The number of active opportunities at various funnel stages divided by the sales team capacity. Ensures there is adequate pipeline coverage for the sales team.
- Program budget $$: The budget dollars available for GTM programs and activities. Connects spending directly to pipeline growth planning that can be generated.
Incorporating these performance layers enables assumptions and guardrails around expected conversion rates, coverage, and spending power. Rather than planning in a vacuum, it integrates metrics that reflect how the interactions of GTM activity translate into actual pipeline and revenue.
Pipeline growth planning brings together these disparate metrics to build a growth model aligned with outcomes.
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Pipeline growth planning drives execution focus
Implementing pipeline growth planning in lockstep with GTM teams also brings much-needed focus and discipline to the chaos of day-to-day tactical execution. Activities can be explicitly linked back to pipeline and revenue targets rather than loose measures of awareness, engagement, and reach.
If an organization is embarking on pipeline growth planning for the first time, then benchmarking your pipeline KPI goals and funnel conversion metrics to data from industry analysts for B2B SaaS organizations is the recommended starting point.
There are plenty of firms such as Gartner, TechTarget, that have surveys and research validation for best-in-class key performance indicators. The only caveat with using these benchmarks is that it may not be a specific industry or a certain solution category.
Because these key performance indicators (ie: win rates, ASPs, coverage multiples, etc) can completely vary, CMOs/Growth leaders have to be cognizant when using these industry benchmarks.
Separately, there’d have to be alignment of top-down pipeline growth planning goals across efforts within the marketing, sales, customer success, and finance teams.
For example, the sales teams could be taking ACV goals and forecasting quotas to align with their field/reps, and therefore marketing teams would need to be in lockstep to ensure they are factoring in the leading indicators, to provide the right level of air-cover.
Putting pipeline growth plans into action
A well-constructed pipeline growth plan is designed to connect goals to tactical execution. For the first half (one to two quarters) of a fiscal year, the pipeline growth plan provides guardrails for the GTM teams to plan their digital and field activities that can drive the required demand gen to fulfill their pipeline and revenue growth targets.
This would be a mix of deciphering and analyzing their channel sources that yield the volume and quality that is required across each of the funnel stages.
Tracking key output and conversion metrics gives insights into the health of the funnel to meet pipeline growth targets. While top-of-funnel activity is more challenging to tie directly to revenue, it serves as a useful leading indicator.
Careful monitoring is needed to ensure there is adequate volume and coverage at each stage to meet downstream KPIs tied to the pipeline growth plan. Whether the activities are inbound or outbound, B2B SaaS companies rely on their digital properties as a primary channel for building top-of-funnel demand gen.
This can be a daunting task for revenue teams of getting it right. It’s a mix of converging data and systems in a top-down framework.
The role of the CMO/Growth Leader in driving alignment
Pipeline growth planning represents a major leadership opportunity for CMOs and growth leaders to drive strategic alignment and focus across the organization.
By providing the cross-functional visibility and coordination required for an effective process, leaders can bring sales, marketing, customer success, and finance together to connect activities with outcomes.
Leading with pipeline growth planning as a baseline also enables leaders to direct their teams and resources toward key programs that move the revenue needle rather than getting distracted by ad hoc tactical demands.
When CMOs or growth leaders spearhead alignment around pipeline growth planning, they play a pivotal role in managing profitable growth by ensuring GTM teams are in lockstep, as they scale pipeline and revenue.
This end-to-end ownership of the customer growth engine elevates CMOs and growth leaders as a strategic driver of elevating the impact and influence they have with the board, the C-suite, and across their organization.