3 metrics we use to build pipeline velocity at import.io

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One of the most important truths that every entrepreneur needs to understand when it comes to building a company is that you seldom have all the answers right away. It’s rare to have every process cemented in place from day one of operation.

That’s what makes the world of entrepreneurship and startups exciting—every person involved has the opportunity to influence the growth and direction of the company.

But, that same opportunity that exists—the chance to mold out processes and set the standard—can also make building a successful, sustainable business incredibly challenging for a lot of new teams.

Some teams thrive on uncertainty and flexibility, others crumble. In my experience, it all comes down to alignment.

When I joined import.io as one of the first sales people on our team, we didn’t have a product / paid offering. Naturally, the sole focus of our marketing team was to attract and convince people to become users of our free tool.

But soon after when we updated to a freemium model (both free and paid options), we faced a challenge. Here was the problem we experienced:

Once we had a product offering that could impact revenue, the Sales department expected that leads would come in from Marketing—but Marketing was still focused on driving people to the free tool. They in turn expected the Sales department to take the handful of leads that were coming through and close the deals. The lack of understanding and misalignment of teams made for an awkward working relationship. In time we realized that what was missing was a way for us all to work together and measure progress towards a common goal of revenue.

We knew the problem: it was pretty clear that both teams were not on the same page. The question was, how could we bridge the gap and start to get 8 people rowing in the same direction?

This post outlines what we did to answer the question and solve the problem:

1. We established a shared definition of the pipeline

pipeline

One of the first things we realized we needed to do in order to align our teams at import.io was clearly define the pipeline. This was a crucial part of setting expectations across teams and ensuring that everyone had a solid understanding of how to interact with new leads.

We focused on the following 3 definitions:

  1. Marketing qualified lead (MQL): For us, this is someone who signs up on our enterprise page.
  1. Sales qualified lead (SQL): This is someone who has been through an email conversation with one of our inbound sales representatives and have been confirmed for having both of the following:
  • a project we can support with our product
  • a budget the roughly maps to our enterprise offering (we have a lot of free users, so this is an important filter)
  1. Sale: This is someone who has been through the entire sales process and has signed a contract to pay for our data service.

Once we had our pipeline defined, our next step was to establish some initial conversion goals and build a process that could help us meet those goals.

2. Start with some rough metrics

ruler

In the early days, we really no idea what the conversion rates between MQL, SQL and Sale should look like. Worse, we knew it would take 3-6 months of data before we would start to see a pattern. But that’s the reality of starting a new process…you don’t have all the answers on day one.

In order to succeed and grow though, we knew we needed to set some numbers to work against. Conversion rates are really useful for forecasting and setting initial lead quotas, so we ended up setting these numbers:

  • MQL:SQL 10:1
  • SQL:Sale 5:1

This enabled us to work backwards from our sales target and get a rough sense for what our MQL quota should look like.

For example: If we wanted 2 sales/month per salesperson, we knew we needed to generate 10 SQLs/month and 100 MQLs/month would give us 10 SQLs/month. With these numbers in mind, we were able to establish a monthly forecasting process and quota setting process. These conversion rates changed over time as we operated the funnel…but the process remained the same—it was standardized so that every team knew the why’s and how’s behind our goals.

Once we had this process in place, we focused on our next priority: tracking and evaluating data.

3. Establish a weekly reporting rhythm

In order to evaluate our efforts, we tracked the progress we were making on our conversion goals on a weekly basis in our CRM and recorded them in a spreadsheet like this. As part of our weekly pipeline forecasting, we now look how we are tracking to our MQL, SQL and Sales targets.

4. Team structure

startrek

In order to really fine-tune lead velocity, we knew we needed to clearly establish our team structure. Here’s how our team operates now:

Our inbound rep (Elmer) replies to inbound requests (MQLs) and qualifies them for:

Budget: our enterprise data offering is not cheap and can be a bit of a shock for our free tool users. We’ve found that is is best of get that on the table straight away.

Project Suitability: our Enterprise data offering (like most products) is great for some applications, and a no-go for others.

If things match budget and project requirements, Elmer hands them over to one of Account Executives for an initial call. One recommendation for this step:

Scheduling the first call: Scheduling sucks and following up on scheduling requests really sucks (for both parties)…so we use Clara Labs to automate the Executive Assistant scheduling process.

Once the call is booked, an Account Executive will double qualify for Budget, Project Suitability, and Timeline.

If it all checks out, the AE will move the deal into the sales pipeline which is the point at which it becomes an SQL and officially enters the sales process.

5. Meetings

MarginCall-Table

One of the final decisions we made in an effort to align our teams was to set up regularly occurring team meetings. No one likes meetings, mostly because they are inefficient. But if you can organize standardized, structured meetings that report on 3 simple metrics, you’ll find that they can be incredibly helpful (and not an obnoxious waste of time for anyone). We have 2 weekly meetings:

Weekly forecasting Meeting: In this meeting, the CEO, CFO, and myself go through the sales forecast for the quarter and pipeline metrics.

Weekly Sales-Marketing Meeting: In this meeting, the teams go through MQL, SQL numbers and the SQL acceptance process.

These meetings are an essential part of keeping everyone in the loop and on the same page.


Wrapping Up

By taking the steps outlined above, we were able to effectively align our teams and experience growth. The real power and value of defining the pipeline, agreeing on key metrics, and forecasting week-by-week for our company is this: you can be 1 month into the quarter forecasting at 61% of target and actually do something about it.

For example, we looked at our MQL:SQL conversion rate and figured out that we need to triple our MQL quota in month 2 which would give us ~1month to process leads from sign-up to sale…(which is realistic for us). Sure the next question is how do you drive MQL…but the real value here is knowing you’re going to miss a goal 3 months in advance and having specific numbers around what you need to do to correct the course.

In my experience, without taking the time to establish processes that better align your teams, you can’t work ahead in this way, it’s really difficult to build something sustainable, and it’s nearly impossible to experience growth.

What have you done to boost lead velocity? Leave a comment below, I’d love to hear from you.

by Dan Murphy @dantmurphy

dan murphy

Dan heads up Business Development at import.io and blogs about SaaS, Sales and Startups.

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