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Why Pipeline Value Is the Most Important Metric To Our Marketing Team

As sales becomes increasingly dependant on marketing, organizations face the challenge of building a closed-loop reporting system. Studies show failure to align sales and marketing teams around the right processes and technologies costs B2B companies 10% or more of revenue per year. How can marketers use pipeline value reporting to better align their team all while improving their relationship with sales?

What is Pipeline Value?

Pipeline value is the aggregate value of all the active opportunities at each stage in the sales pipeline. What makes this metric so appealing is its ability to directly pinpoint marketing’s influence on revenue. While there is no clear-cut industry standard for how much marketing should contribute to the sales pipeline, benchmark studies from SiriusDecisions show that on average, marketing organizations typically contribute between 10-40% of the sales pipeline.

Why is it important to measure?

There is a lot of discussion today about marketing becoming a driver of top-line growth – a revenue driver rather than a cost center. There is no better way to become aligned with the company’s goals and focus the marketing team on supporting revenue targets than to track and measure the value of marketing-generated and marketing-influenced pipeline. Marketing and sales are supposed to be tightly aligned, and ideally they work together to target prospects and acquire customers. Simply aligning the marketing team with revenue goals can drive big changes in that relationship.

How do I measure it?

The best place to track and measure marketing’s influence on the sales pipeline is in your CRM. CRMs not only house revenue and campaign data, but are also the first place sales and executive teams look for metrics.

Using sales data to track pipeline value can often be a double-edged sword. It relies on strong tracking of leads to opportunities, and accurate tracking of opportunity value. If your sales team doesn’t correctly process and convert marketing-created leads or doesn’t track the value of opportunities created by marketing, then marketing’s contribution will be underrepresented.

pipeline value Image source: Bizible 

Marketers can eliminate the value tracking problem by stamping every new marketing-generated opportunity with a default value, either in the same field that sales uses to track value or in a separate custom field. You can use the average value of the marketing-generated deals that closed last quarter as your default or starting value. This gives you a way to track the potential value of marketing generated pipeline as soon as it is created, rather than waiting for sales to go through the process of engaging with the prospect and entering the number. Taking a look at what happened to last quarter’s leads and adjusting accordingly is a good habit for all marketers.

Another important metric to measure is the value of marketing-influenced opportunities. These are opportunities that were not created specifically by marketing, but are infused with marketing touches. For many companies, this is often a more important metric, since it measures the extent to which sales and marketing are working together to close business. This measurement becomes more relevant as the sales cycle gets more complex and the average transaction gets bigger.

Why does it matter to our marketing team?

By measuring pipeline value, we ensure that everyone on our team knows how their efforts contribute to the top line, and therefore to the bottom line. Our content marketing team converts strangers into prospects, generates leads, and helps sales close deals. Meanwhile, our event marketers provide sales with assets they can use to move prospects through the sales cycle.

Pipeline reporting helps our marketing team align with sales and set goals that support revenue growth. It allows us to establish targets and optimize our efforts to drive business, all while answering the age-old CFO question: what am I getting for all this marketing spend?

 

 

 

 

  • Austin Chadwick

    great post!!

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