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Pipeline Optimization: The Secret to a Perfected Annual Pipeline Plan

By August 24, 2021August 1st, 2023No Comments

With the third quarter of the year well under way, annual planning and budgeting for most companies is right around the corner. While a critical consideration for budgeting is pipeline planning, many companies do not optimize their pipeline plan. Because sales and marketing expenses often rank first or second of total company expenses, not running pipeline optimization can be detrimental to revenue growth.

A Common Pipeline Planning Mistake

One of the most common mistakes companies make when pipeline planning is only using win rates to estimate pipeline requirements. By not optimizing their pipeline plan across specific categories and segments, pipeline can be insufficient for certain targets and are too rich in others. Thus, when trying to reach goals, companies often inefficiently allocate resources, leading to maximized spend and unattained quotas.

Pipeline Optimization

So, what is pipeline optimization? Pipeline optimization helps companies find the least amount of pipeline need to meet bookings targets. Utilizing detailed historical conversion rates and pipeline creation trends, an optimization model can deliver a pipeline plan while taking into consideration of all possible constraints such as New Business to Expansion ratio, SDR to AE ratio and resource growth limits.

Pipeline optimization has multiple benefits including:

  • Potential annual savings in sales and SDR hiring
  • Improved real-time resource reallocation and hiring decision making
  • Enhanced insights into conversion conditions and factors

Pipeline optimization can also help identify the maximum revenues that can be achieved given certain resource deployment.

With so many benefits, why isn’t pipeline optimization widely used across the industry? Firstly, it can be very time consuming. Manually calculating pipeline conversion rates across various segments requires a large investment of time and is prone to human-error. Secondly, the rigidity of historical CRM data makes it difficult to collect conversion metrics. Without custom formulas, it can be a pain to even attain the inputs for a pipeline optimization model.

The Right Tools Make a Big Difference

Technology plays a critical role in pipeline optimization and can provide the analytics and automation required to seamlessly run pipeline planning. Discern.io’s Pipeline Modeling solution leverages advanced algorithms and machine learning to provide the best possible pipeline plan to attain revenue targets whilst reserving budget.

Your current pipeline planning method provides one possible outcome. Discern.io’s solution finds the best pipeline plan out of many possibilities in order to achieve your bookings AND impress your CFO.