From the Sales Pipeline to the Entire Revenue Funnel

Driving predictable revenue growth requires shifting the focus from the Sales Pipeline to the Entire Revenue Funnel. The revenue journey of B2B SaaS starts much before the sales pipeline. Don’t be stuck just scraping the bottom of the funnel.

Deepinder Singh Dhingra | Founder & CEO
May 4, 2022
min read

Last July, I came across the area of Revenue Operations (RevOps) in B2B SaaS companies. I was immediately taken in with the movement, the people involved, and the unique challenges this function and operating model faces.

RevOps is where Customer Success was 6-7 years back.

Bringing a lateral lens to this space inspired me to embark on this journey called

The Art and Magic of B2B Sales

In the past, revenue generation focus in the B2B world has been predominantly outbound with large sales teams, rockstar salespeople, inside sales, SalesOps, and their sacred sales pipeline ruling the roost for the GTM organization.

The corporate world would be rife with legends of sales reps, AEs, and leaders pulling off great deals and earning even larger paycheques than the CEO!

Young Sales executives would aspire to make the presidents club and get felicitated at the yearly Sales offsites. Software AEs in the 90s, 2000s, and up till the early 2010s glorified the "magic" aspect of sales.

But even as this "magical" art of closing deals continued to be admired by many, under the hood, there was much focus on the operations side of prospecting, qualification, sales pipeline management, sales analytics, opportunity insights, and increasing accuracy of sales projections.

Always be closing

SalesOps leaders would be at pains to drive discipline in opportunity creation, maintain data hygiene, and drive better quantification and revenue forecasting.

But the question "Is this opportunity ready to close" would get perennially ambiguous responses. One would hear the frantic urge of "Always be closing" in the corridors of sales power towards the end of every quarter.

Driving predictable sales forecasts, quota attainments, etc., was more of an art than a science.

Trust the Intuition

The science of data-driven sales was in its infancy, and many assessments relied on the intuition of individuals working across the sales pipeline. Companies having bigger budgets would hire strategy and ops consultants (internally and externally) to conduct massive forecasting exercises and interviews with the sales team to separate the signals from the noise.

The main fall-back of the CEO struggling with driving towards predictable revenue targets was hiring a rockstar Sales leader with the most impressive Rolodex and track record combined with some operational and process support. And reliance was still on the magic of the sales leader and magic embedded within the sales interactions and meetings.

The New Age of B2B SaaS

Things changed when cloud-based CRMs like Salesforce emerged.

Further, new-age sales automation and intelligence tools emerged to help with sales pipeline optimization. Companies such as Outreach, SalesLoft, Gong, and Clari have led the SalesTech revolution recently.

Marketing once thought to be only about brand awareness, positioning, and product marketing is now at the forefront of driving the inbound demand generation and account-based marketing efforts.

Combined with this has been a plethora of technologies to help marketing leaders and marketing ops people with improved lead generation, website analytics, campaign analytics, attribution, visitor conversion rate optimization, etc.

The rise of the SaaS subscription model also led to new functions like Customer Success.

Furthermore, it became clear that all GTM teams across Sales, Marketing, and Customer Success need to appreciate each other's perspectives.

Pipeline thinking (sales) has been enhanced with funnel thinking (marketing) and beyond to flywheel thinking (customer success).

Predictability remains aloof

One would expect that with the emergence of SaaS, where the very nature of the subscription-based model implies predictability, the problem of driving predictable revenue growth would go away.

Managing pipelines and forecasts would be more straightforward and less individual human dependent and with the right amount of enablement, technology, and operations support, one should be able to drive improved predictability in the system.

However, this is far from true.

"Less Than 50% of Sales Leaders and Sellers Have High Confidence in Forecasting Accuracy"

The innovation in sales and marketing technologies has been accompanied by a parallel, if not faster, increase in the complexity of the GTM motions now prevalent in the B2B SaaS world. The mix of inbound, outbound, product-led, marketing-led, sales-led motions, etc., combined with the increasing complexity of digital buyer journeys and faster proliferation of products, channels, and regions, has made it even more challenging to drive predictability.

As the SaaS GTM motions evolved and SaaS companies scaled their investments in operations, they created silos of SalesOps, MarketingOps, and Customer SuccessOps. As a result, these teams find it difficult to coordinate their processes, systems, and incentives across the revenue funnel, leading to the leaky funnel problem.

The inability to form a complete, interdependent picture also means low revenue predictability.

Part of the reason is that the modern GTM motion is still new. Revenue generation and targets are still with the Sales team, with other contributing functions not directly accountable. Pipeline management focuses on looking at the pipeline of opportunities and activities at different stages to convert into closed/won opportunities.

Yes, Marketing teams are evolving better to measure their efforts in marketing-created and marketing-influenced pipelines. Still, most of these measurements are about justification rather than being a key component of driving predictable revenue generation.

Companies are still stuck scraping the bottom of the funnel.

Meanwhile, the revenue generation focus is still on optimizing and maximizing pipeline conversions which has the most near-term visibility. While this gives a semblance of stability for the quarter, it misses the point of revenue predictability, which is about meeting your growth targets consistently quarter on quarter.

Like a Founder of a ~$200 Million ARR B2B SaaS company told us --

“My money question is not the forecast for this quarter, but whether I will have enough pipeline going into Q2”

A New Approach Needed

The revenue funnel in B2B SaaS has moved. It is no longer just the sales pipeline with its opportunities and opportunity stages.

The revenue journey starts much before the pipeline.

It involves the marketing motion at the top, the combined marketing and SDR motion in the middle, and finally, the sales motion at the bottom and the Customer Success motion beyond. In many cases, multiple teams are involved across the funnel.

It is not only managing the sales pipeline that is important to predictability but looking at the entire funnel holistically across the top, middle and bottom.

solid plan

And as one of the VP Revenue Operations, we are closely working with told us recently,

“ If the Pipeline Conversion is not a problem, then the problem is with Pipeline Generation, and those answers are definitely in the top and middle of the funnel and the most difficult to answer. "

If one struggles with driving predictability in your revenue journey, it is imperative to shift from pipeline management to revenue funnel management.

But how?

One of the main benefits of the modern GTM motion is its focus on the end-to-end engine of Marketing, Sales, and Customer Success to drive revenue growth. However, although GTM motions and technologies have evolved, the main anchor of revenue generation continues to be the Sales engine and pipeline.

The CRM as a single source of truth is a myth.

Many CROs and RevOps leaders from the Sales background still view the top and middle of the funnel as "messy." While admitting to the importance of the top and middle of the funnel, they cannot quantify the impact of these stages on the revenue journey.

Existing processes and tools are of little help.

A RevOps Manager of a B2B SaaS Talent Engagement Company recently shared,

“ If we create a new program to target accounts of our competitor, RevOps wants to push that with all the teams Marketing, BDRs, and AEs. However, there is no way to track across all aspects and we don’t just want to know the sales data but also what is happening on the marketing side and SDRs"

Most revenue intelligence tools are often tied to the top, middle, or bottom of the funnel and won't connect the different aspects.

In-house processes try to make up for this in weekly sales & marketing meetings, cross-functional business reviews, and pipeline coverage meetings, supported by spreadsheets and BI dashboards. But these efforts are like patchwork instead of a proper fix.

What is needed is a combination of the right tweaks in mindset, processes, and tools designed for complete revenue funnel management and intelligence.

If you are interested in learning more or have an opinion on this, sign up below for a preview of the solution we are building.

No more random acts of marketing.

Pipeline & Revenue Predictions, Attribution and Funnel Intelligence in one place.
You Might Also Like