- September 4, 2005
- Posted by: Dave Kurlan
- Category: Understanding the Sales Force
I recently wrote about the importance of a balanced pipeline but, in that article, didn’t comment on the required size of the pipeline. Size will vary by company, industry, average order, and salesperson but I’ll attempt to provide a common formula that should work for everyone.
Start with the number of accounts or sales that must be closed in a month, quarter, or in the case of really long sell cycles, year. Let’s assume that for the period in question, we need to close 2 accounts. Using the visual pipeline (baseball diamond and four-quadrant overlay) I spoke about in the prior article, this would likely require 3 in the “closeable” category, 4 (at 50% closing) in the “qualified” category, 6 in the “prospects” category and 8 in the “suspects” category. It further means that for every one account you expect to close the pipeline must have 4 new “suspects” and 10 total opportunities. Based on the ratios in your business, modify the formula as required and you’ll have a properly sized and balanced pipeline in two months.