Go-To-Market Troubleshooting:  Let’s Take It From The Top

🌈 Abstract

The article discusses strategies for troubleshooting go-to-market (GTM) performance, particularly in the context of new business annual recurring revenue (newbiz ARR) plan attainment. It focuses on two key questions to analyze the problem: 1) Are we giving sales a chance to hit the number? and 2) Is sales converting enough of the pipeline? The article provides guidance on using pipeline coverage and conversion rate metrics to identify and address issues such as insufficient pipeline, the "floating bar problem", and changes in pipeline composition that impact conversion rates.

🙋 Q&A

[01] Don't Knee-Jerk Blame Plan

1. What are the two reasons the author suggests not to immediately blame the plan when missing it?

• First, the author argues that by signing off on the plan, you have already committed to it, and blaming it later is a poor approach. The author suggests that if you don't believe in the plan, you should push back during the planning process rather than folding to internal pressure.
• Second, the author states that if the plan is truly unachievable, this will emerge from the data analysis approach outlined in the article, so it's better to avoid the initial temptation to blame the plan and instead focus on examining the funnel.

2. What is the "price of admission to the sales leadership role" that the author refers to? The author states that the need to make difficult judgments about the achievability of the plan is the "price of admission to the sales leadership role". Avoiding this responsibility by quickly blaming the plan is described as "copping out at your own peril".

[02] The Two Questions and Two Metrics

1. What are the two key questions the author suggests asking when missing plan? The two questions are:

• Are we giving sales a chance to hit the number?
• Is sales converting enough of the pipeline?

2. What are the two metrics the author recommends using to answer these questions? The two metrics are:

• Week-3 pipeline coverage (pipeline/plan)
• Week-3 pipeline conversion rate

3. Why does the author emphasize the importance of simplifying the problem and avoiding "analytical quicksand"? The author states that many companies get "neck-deep in such quicksand", comparing various dashboard clips, reports, and spreadsheets from different systems, and losing sight of the overall business picture. Simplifying the problem by focusing on the two key questions and metrics is important to avoid this trap.

[03] Are We Giving Sales a Chance to Hit the Number?

1. What does the author conclude about the company's pipeline coverage based on the analysis presented in the chart? The author concludes that the company is starting with insufficient pipeline, and is not giving sales a chance to hit the number. This is evidenced by the pipeline coverage being consistently below the target implied by the conversion rate.

2. What are the high-level steps the author recommends for making a plan to generate more pipeline? The author suggests the following steps:

• Identify the pipeline gap (i.e., how much more pipeline is needed)
• Determine the most efficient ways to generate that additional pipeline
• Assign ownership and accountability for pipeline generation
• Monitor progress and make adjustments as needed

3. Why does the author emphasize the importance of having basic pipeline discipline? The author states that no pipeline analytics will work if there is a lack of basic pipeline discipline, such as clear definitions for stages, close dates, opportunity values, and forecast categories, and regular enforcement of these through pipeline scrubs.

[04] The Floating Bar Problem

1. What is the "floating bar problem" that the author describes? The floating bar problem refers to a situation where the pipeline initially appears sufficient, but burns off at an above-average rate across the quarter. This happens because sales representatives, under pressure to maintain high pipeline coverage, will include lower-quality opportunities in the pipeline, creating an illusion of coverage that disappears as the quarter progresses.

2. How does the author suggest addressing the floating bar problem? The author suggests the solution is to maintain strict pipeline discipline, particularly at the stage-2 level where sales decides to accept or reject opportunities. The author emphasizes that lower-quality opportunities should not be included in the pipeline, and that any reduction in conversion rates should manifest as an increased stage-2 rejection rate, rather than a lower conversion rate.

[05] Is Sales Converting Enough of the Pipeline?

1. What does the author conclude about the company's pipeline conversion rate based on the analysis presented in the chart? The author concludes that the company's problem is pipeline conversion, not pipeline coverage. The conversion rates are seen plummeting over time, dropping from around 32% to 16%, despite maintaining sufficient pipeline coverage.

2. What are some of the potential factors the author suggests could be driving the reduced pipeline conversion rates? The author identifies several potential factors, including:

• Pipeline substitution, where higher-converting pipeline is replaced with lower-converting pipeline
• Changes in pipeline composition, such as shifts in the mix of pipeline sources, products, geographies, or business segments
• Sales execution issues
• Changes in the market or customer environment

The author recommends segmenting the pipeline by various variables to identify any changes in composition that may be impacting conversion rates.