Category Archives: Pipeline

How To Navigate the Pipeline Crisis

Posted on November 8, 2025 | 4 comments

Unlike many marketers, I’m not particularly prone to hyperbole, and thus “crisis” is not a word that I use lightly.  But I think saying “pipeline crisis” is warranted today when discussing what’s happening in marketing and is a key underlying cause for the broader malaise in SaaS growth. 

You don’t need to look far to find signs of a problem:

  • SaaS stocks, as measured by Bessemer’s Emerging Cloud Index are down 3.4% year to date.
  • Customer acquisition efficiency is down.  Earlier this year, median CAC payback periods hit 57 months, implying a staggering almost five years to recoup the cost of acquiring a dollar of net-new ARR.
  • Pipeline coverage ratios are running below their required targets.  The top reason for missing sales targets is insufficient pipeline coverage and Cloud Ratings shows stated coverage of 3.6x vs. target coverage of 4.1x.  (I can hear the cries of CROs everywhere saying, “please, just give me more at-bats!”)
  • Articles about the web traffic crisis are ubiquitous, from Rand Fishkin’s must-read posts on zero-click marketing to CJ Gustafson swimming outside his normal lane with a post entitled Google Zero.  The web is transitioning into a series of walled gardens and what’s left over is increasingly front-run both by Google search and, of course, answer engines such as ChatGPT, Perplexity, Claude, and Gemini.
  • Earlier this year, Andrew Chen put it bluntly:  Every Marketing Channel Sucks Right Now.

Add it all up and you can summarize this rather grim picture — as the Exit Five newsletter recently did — with Nothing Works Anymore.

I see this every day in my work with dozens of SaaS companies.  Because many companies are missing bookings targets by roughly the same percentage as they are missing pipeline coverage targets, I believe this is a pipeline crisis, and not a conversion rate crisis.

The struggle is real.  If you’re facing it, you are not alone.

Against this cacophony we hear a lot of talk about “brand vs. demand.”  The argument being that since demand generation programs are working less effectively, marketers should increasingly allocate dollars to brand programs.  It’s not a bad argument — in part because I believe that marketers over-rotated to highly measurable marketing during the go-go days — and thus a swing back to less directly measurable marketing is a good idea. 

(Aside:  I’d argue that marketers didn’t over-rotate on their own.  They got an assist from CEOs and CFOs who were only too eager to invest exclusively in marketing programs that delivered a clear short-term return and ignore the underlying complexity in B2B sales, effectively living-the-lie that is marketing attribution.  We don’t sell toothbrushes here, people.  Nobody goes to a tradeshow and buys a $250K enterprise solution — or even a $25K one — based on one interaction with one person.  But I digress.)

The question, of course, is what to do about it?

What Others Are Saying

A lot of smart people are weighing in, so I thought I’d provide a few links before sharing my own take.

  • Kyle Poyar wrote a great post called The 2025 State of B2B GTM Report.  (Subtitled “What’s Working in GTM?  Anything!?”)  My favorite part is the GTM Scorecard, a quadrant that maps channels by popularity and likely impact.  The underlying report is full of good ideas, GTM tool recommendations, and survey data.
  • The aforementioned Exit Five post, despite its title, is actually about what is working with answers derived from an informal poll of community members.
  • Scale recently published a State of GTM AI report which provides survey data on AI within GTM, focused largely on high-level use-cases and a two-phase adoption model.  (Jadedly, if we’re going to do less effective work, then let’s at least do it more efficiently.)
  • If your issues are more strategic, such as identifying and targeting sub-verticals, then you should read my friend Ian Howell’s book, Smart Conversations.

What Would Dave Do?

I’m going to build upon a popular comment I made on Kyle’s CAC payback period post.  Consider this a sister post to What To Do When You Need Pipeline in a Hurry, but this time not focused on the hurry, but on today’s environment.

Here’s what I would do:

  • Think holistically.  You might only be the CMO, but you need to look across all pipeline sources.  The job is to start quarters with sufficient coverage and notably not just to hit marketing pipegen goals.  If outbound is working, reallocate money to it.  If AEs can generate more pipeline (e.g., formal targets, more direct routing of inbound), then do it.
  • ABM.  Substitute across-the-board campaigns with targeted outreach on key accounts, leveraging both marketing and human channels (e.g., SDRs), both digital and dimensional assets (i.e., physical things like branded Moleskines), and intimate live events.  As an old CRO friend says, “if by ABM you mean us picking our customers as opposed to them picking us, then I am in favor.”
  • Events.  People are tired of working from home all day and champing at the bit to get out and press the flesh.  This includes major tradeshows, annual user conferences,  and roadshows all the way down to field-marketing dinners and sporting event boxes.
  • Get good at AEO.  It’s quickly replacing and more effective than search.  It’s also more winner-take-all.  There is plenty of content out there on how to do it and agencies eager to help.  Read these two articles for starters.
  • Leverage the CEO via social media (e.g., LinkedIn), podcast appearances, and speeches.  And LinkedIn doesn’t just mean a few posts, it means an overall strategy.
  • Use your AI message to put butts in seats.  We’re still in the stage where people are confused about AI and nothing puts butts in seats like confusion.  Do educational webinars, videos, and content.  Educate people but be sure to do it en masse.
  • Leverage AI tools and workflows.  Review Kyle’s report, particularly the part on the GTM tech stack.  Read Paul Stansik’s practical posts on AI, including how to avoid slop.
  • Build first-party audiences.  If you can no longer pay a reasonable amount to reach other people’s audiences, then you’re going to need to build your own.  While this is a slow burn, over time you’ll be happy you did it.  Build a Substack, a YouTube channel, a quality newsletter, or a podcast.
  • Leverage partners.  They can account for 20-30% of your pipeline and usually bring opportunities that close faster and with a higher conversion rate.  If you have a partner program, leverage it.  If you don’t, start building one.  It’s another slow burn, but you’ll be happy you did it.
  • Check your nurture tracks.  Long-term nurture is easily forgotten.  Measure recycled leads.  Report on your tracks.  Ensure you’ve built specific tracks for competitive loss and bad timing.  A/B test them, the flows, and the content.
  • Understand why you lose.  While I believe most companies have a coverage problem, not a conversion problem, I like to win anyway and if your conversion rates are below 20-25% you need to understand why.  Do quantitative win/loss via CRM reporting, listen to call recordings, and do win/loss interviews to understand what’s really going on.
  • Invest in customer success.  While I know this doesn’t help with pipeline coverage (except for expansion), always remember that the cost to backfill churn is CAC-ratio * lost-ARR.  Thus, if your CAC ratio is 2.0 and you lose $2M in ARR, it’s going to cost $4M to backfill it. The easiest – and most cost-effective — way to keep the ARR bucket rising is to limit leakage.
  • Join a community.  In times of change it’s important to have colleagues you can talk to, so I’d not only keep in close touch with existing peers, but join a marketing community like Exit Five to engage in shop talk.

4 Comments

Posted in AI, Growth, GTM, Marketing, Pipeline

A CEO’s High-Level Guide to GTM Troubleshooting

Posted on May 10, 2025 | 2 comments

I’ve written about this topic a lot over the years, but never before integrated my ideas into a single high-level piece that not only provides a solution to the problem, but also derives it from first principles. That’s what I’ll do today. If you’re new to this topic, I strongly recommend reading the articles I link to throughout the post.

Scene: you’re consistently having trouble hitting plan. Finance is blaming sales. Sales is blaming marketing. Marketing is blaming the macro environment. Everyone is blaming SDRs. Alliances is hiding in a foxhole hoping no one remembers to blame them. E-staff meetings resemble a cage fight from Beyond Thunderdome, but it’s a tag-team match with each C-level tapping in their heads of operations when they need a break. Numbers are flying everywhere. The shit is hitting the proverbial fan.

The question for CEOs: what do I do about this mess? Here’s my answer.

First:

  • Avoid the blame game. That sounds much easier than it is because blame can vary from explicit to subtle and everyone’s blame sensitivity ears are set to eleven. Speak slowly, carefully, and factually when discussing the situation. You might wonder why everyone is pointing fingers, and the reason might well be you.
  • Solve the problem. Keep everyone focused on solving the problem going forward. Use blameless statements of fact when discussing historical data. For example, say “when we start with less than 2.5x pipeline coverage, we almost always miss plan” as opposed to “when marketing fails on pipeline generation, we miss plan unless sales does their usual heroic job in pipeline conversion.”)

Then reset the pipeline discussion by constantly reminding everyone of these three facts:

  • How do you make 16 quarters in a row? One at a time.
  • How do you make one quarter? Start with sufficient pipeline coverage.
  • And then convert it at your target conversion rate.

This reframes the problem into making one quarter — the right focus if you’ve missed three in a row.

  • This will force a discussion of what “sufficient” means
  • That is generally determined by inverting your historical week 3 pipeline conversion rates
  • And adjusting them as required, for example, to account for the impacts of big deals or other one-time events
  • This may in turn reveal a conversion rate problem, where actual conversion rates are either below targets and/or simply not viable to produce a sales model that hits the board’s target customer acquisition cost (CAC) ratio. For example, you generally can’t achieve a decent CAC ratio with a 20% conversion rate and 5x pipeline coverage requirement. In this case, you will need to balance your energy on improving both conversion rates and starting coverage. While conversion rates are largely a sales team issue, there is nevertheless plenty that marketing and alliances can do to help: marketing through targeting, tools, enablement, and training; alliances through delivering higher-quality opportunities that often convert at higher rates than either inbound or SDR outbound.

It also says you need to think about each and every quarter. This leads to three critical realizations:

  • That you must also focus on future pipeline, but segmented into quarters, and not on some rolling basis
  • That you need to forecast pipeline (e.g., for next quarter, if not also the one after that)
  • That you need some mechanism for taking action when that forecast is below target

The last point should cause you to create some meeting or committee where the pipeline forecast is reviewed and the owners of each of the four to six pipeline sources (i.e., marketing, AE outbound, SDR outbound, alliances, community, PLG) can discuss and then take remedial measures.

  • That body should be a team of senior people focused on a single goal: starting every quarter with sufficient pipeline coverage.
  • It should be chaired by one person who must be seen as wearing two hats: one as their functional role (e.g., CMO) and the other as head of the pipeline task force. That person must be empowered to solve problems when they arise, even when they cross functions.
  • Think: “OK, we’re forecasting 2.2x starting coverage for next quarter instead of 2.5x, which is a $2M gap. Who can do what to get us that $2M?”
  • If that means shifting resources, they shift them (e.g., “I’ll defer hiring one SDR to free up $25K to spend on demandgen”).
  • If that means asking for new resources, they ask (e.g., I’ll tell the CEO and CFO that if we can’t find $50K, then we think we’ve got no chance of hitting next quarter’s starting coverage goals).
  • If that means rebalancing the go-to-market team, they do it. For example, “we’ve only got enough pipeline to support 8 AEs and we’ve got 12. If we cut two AEs, we can use that money to invest in marketing and SDRs to support the remaining 10.”
  • Finally, if you need to focus on both pipeline coverage and conversion rates, then this same body, in part two of the meeting, can review progress on actions design to improve conversion.

Teamwork and alignment is not about behaving well in meetings or only politely backstabbing each other outside them. It’s about sitting down together to say, “well, we’re off plan, and what are we going to do about it?” And doing so without any sacred cows in the conversation. Just as no battle plan survives first contact with the enemy, no pipeline plan survives first contact with the market. That’s why you need this group and that’s what it means to align sales, marketing, alliances, and SDRs on pipeline goals. It’s the translation of the popular saying, “pipeline generation is a team sport.”

Notice that I never said to heavily focus on individual pipeline generation (“pipegen”) targets. Yes, you need them and you should set and track them, but we must remember the purpose of pipegen is to hit starting pipeline coverage goals. So just as we shouldn’t overly focus on other upstream metrics — from dials to alliances-meetings to MQLs — we shouldn’t overly focus on pipegen targets to the point where they become the end, not the means. While pipegen is certainly closer to starting coverage than MQLs or dials, it is nevertheless an enabler, in this case, one step removed.

Yes, tracking upstream metrics is important and for marketing I’d track both MQLs and pipegen (via oppty count, not dollars), but I’d neither pop champagne nor tie the CMO to the whipping post based on either MQLs or pipegen alone.

Don’t get me wrong — if your model’s correct, it should be impossible to consistently hit starting pipeline coverage targets while consistently failing on pipegen goals. But in any given quarter, maybe the AEs are short and marketing covers or marketing’s short and alliances covers. The point is that if the company hits the starting coverage goal, we’re happy with the pipeline machine and if we don’t, we’re not. Regardless of whether individual pipeline source X or Y hit their pipegen goals in a quarter. Ultimately, this point of view drives better teamwork because there’s no shame in forecasting a light result against target or shame in asking for help to cover it.

Finally, I’d note an odd situation I sometimes see that looks like this:

  • Sales consistently achieves bookings targets, but just by a hair
  • Marketing consistently underachieves pipeline targets

For example, sales consistently converts pipeline at 25% off 4x coverage and that 25% conversion rate is just enough to hit plan. But, because the CRO likes cushion, he forces the CMO to sign up for 5x coverage. Marketing then consistently fails to deliver that 5x coverage, delivering 4x coverage instead.

This is an unhealthy situation because sales is consistently succeeding while marketing is consistently failing. If you believe, as I do, that if sales is consistently hitting plan then, definitionally marketing has provided everything it needs to (from pipeline to messaging to enablement), then you can see how pathological this situation is. Sales is simply looking out for itself at the expense of marketing. That’s good for the company in the short term because you’re consistently hitting plan, but bad in the long term because there will be high turnover in the marketing department that should impede their ability to deliver sufficient pipeline in the future.

For more on this topic, please listen to our podcast episode of SaaS Talk with the Metrics Brothers entitled: Top-Down GTM Troubleshooting, Dave’s Method.

2 Comments

Posted in CAC, Culture, Demandgen, Forecasting, Marketing, Pipeline, Sales, Sales Model, Salesops

Think of Demandgen Like Any Other Sales Support Resource

Posted on February 21, 2025 | Leave a comment

Why is it that when we want to add an account executive (AE) to the plan, we always think about some ratios but not others? For example, most people think: Boom! Then we’re going to need:

  • 2/3rds of an sales consultant (SC)
  • 1/3rd of a sales development rep (SDR)
  • 1/6th of a sales manager

With the chosen ratios varying as a function of your sales model. If we’re good, we might even include:

  • 1/8th of an alliances manager
  • 1/10th of a salesops person
  • 1/12th of a sales enablement person

If we’re really good, and we have a large organization, we’ll also get the next layers of sales, SC, and SDR management.

But what’s the one thing that almost never comes up in these support ratio discussions? Demand generation (aka demandgen). Money for marketing to build pipeline for the incremental AE.

When we don’t treat demandgen as a ratio-driven, support resource, we get what I call the baby robin problem.

Sellers waiting for pipeline from marketing

We throw our model out of whack by hiring more sellers than planned and thus everyone ends up with insufficient pipeline. The sellers turn into baby robins, mouths extended upwards, waiting for someone — e.g., SDRs, marketing, alliances — to drop opportunities in.

How can we avoid the baby robin problem? By treating demandgen budget as you would any other sales support resource. We instinctively think about SDRs and SCs (even if we don’t always go hire them). But we don’t do the same for demandgen. So part of this is self-discipline. The other part is math.

Let’s assume steady state, so we can ignore timing and ramping:

  • If our AE has a quota of $300K/quarter
  • And we want 3x pipeline coverage
  • Then we need to generate $900K of pipeline each quarter
  • If our pipe/spend ratio is a healthy 15:1
  • Then we need $60K/quarter in demandgen spend per AE

That’s $240K/year. A lot more than 1/3rd of an SDR and 1/6th of a manager. Yet, we routinely model these lesser costs and forget the demandgen.

Why? Silos.

It’s a different budget. Oh, that’s marketing. But it’s sales that’s asking for incremental money to hire the seller. The marketing budget is someone else’s problem. Until you repeat this 5-10 times and now every seller is starving for pipeline. Then it’s everyone’s problem.

So how can you avoid this? I’ll say it a few different ways, so you can take your pick:

  • Work together. Hiring incremental sellers is a go-to-market (GTM) problem, not a sales problem.
  • Plan holistically.
  • Treat demandgen like any other sales support resource.

Leave a comment

Posted in Demandgen, Marketing, Pipeline, Sales, Sales Model, Scaling, Startups

You Can’t Eat Pipegen

Posted on February 16, 2025 | 2 comments

Years ago, I was in a board meeting and a VC dropped the expression: “you can’t eat IRR.”

I’d never heard it before. It sounded catchy. But, honestly, I didn’t know what it meant. At first, I thought it was VC-ism. But then I learned the phrase was coined by the venerable Howard Marks of Oaktree in one of his famous investor memos. So it’s really a finance-ism, not a VC-ism.

What does it mean? While Marks’ fourteen-page memo provides numerous clear, in-depth examples, I’ll try to capture the spirit of the question with one of my own. Consider two investments, A and B:

And let’s pretend they’re both made by a VC firm on your behalf. Firm A puts your $100 into a startup and one year later they sell the company and distribute $120 back to you. The internal rate of return (IRR) is 20%. That’s pretty good (e.g., compared to average stock market returns), but you were hoping for a long-term investment and now you need to find somewhere else to put your money. Firm B invests in a startup and sells it in year eight, getting you $350 back. The IRR is also 20%. But the total value to paid in (TVPI) is 3.5 compared to 1.2 with Firm A.

In essence, because IRR is based on time, if you can produce a nice return very quickly, you can get an amazing IRR. In my example, both investments produced a solid IRR of 20%, but in one case I had only $20 of profit to eat with, whereas with the other I had $250. (And this is why most investors prefer TVPI over IRR as their top metric. Why? Because you can’t eat IRR.)

I feel the same way about pipegen (aka, pipeline generation). Why? Let’s look at a simple example:

This company’s pipegen targets, presumably created using some funnel model, are in the first row. That model is typically some kind of waterfall where you take starting pipeline, add pipegen plans from the various pipegen sources (e.g., marketing, AEs, SDR, alliances), subtract closed/won opportunities, subtract lost and slipped opportunities, and make some adjustments for opportunity sizes varying around over time.

Actual pipegen, expressed as a percent of plan, is in second row. This is usually broken out by source, but I’ve aggregated them here to keep things simple. Note that if you stopped reading after row two, you’d pop the champagne. Go us! 105 to 109% of pipegen targets all year!! We’re the best!

And you’d be surprised how many companies do this. Sometimes they do it unknowingly. Once you break out pipegen by source, look at plan performance, and compare to prior quarters and years, you have a lot of numbers on a slide. So you tend to then look at the bottom and see total pipgen as a percent of target. If those figures are 100%+, then awesome. Pipegen’s not the problem. Next slide.

But that’s not good enough. What if, for whatever reason, that despite our strong pipegen performance relative to plan, that we’re not starting each quarter with sufficient pipeline coverage. Remember, there are only two high-level questions about sales:

  • Did we give them the chance to make the number?
  • Did they make the number?

Look at row 3. Starting coverage is short for starting pipeline coverage. That’s total current-quarter pipeline at the start of the quarter divided by the new ARR target for the quarter. Most CROs want this ratio to be 3.0x. Here, you can see we started every quarter with between 2.5x to 2.8x coverage. That’s not good enough. In short, it means that we’re not giving sales a fair shot at making the number each quarter. That might partially be sales’ fault. Normally sales is responsible for generating 20-40% of the pipeline (including SDR outbound). But it’s also the fault of marketing and alliances. Nobody should be drinking champagne.

Sure, we may have beaten the pipegen targets in our model, but something’s clearly wrong with our model if we can consistently miss starting coverage while exceeding pipegen targets. What might that be? Perhaps:

  • We’re losing more deals so less pipeline is slipping
  • Deals are shrinking, e.g., in response to price pressure from a competitor
  • Sales cycles are stalled by a megavendor entering the space
  • Deals are slipping more frequently and/or by more quarters than in the past
  • Sales cycles are lengthening, so we’re generating enough pipeline but it’s all too far in the future
  • There’s a math mistake in our model

There are a lot of different reasons this could happen. But the main point is don’t forget to look at row three in the example. That’s where the pipegen team can celebrate. They should need two triggers to open the champagne: first that we beat pipegen targets and second that we start with sufficient pipeline coverage.

And we only break out the caviar on the third trigger: when sales beats the new ARR number.

This post is similar in spirit to one I did last fall entitled, Why Great Marketers Look at Pipeline Coverage, Not Just Pipeline Generation. If you want more on this topic, then take a look at that post as well.

Finally, you now know why I say, “you can’t eat pipegen.” But you can eat starting coverage.

2 Comments

Posted in Marketing, Pipeline, Startups

Tagged

The Ten Most Read Kellblog Posts in 2024

Posted on December 9, 2024 | Leave a comment

It’s always fun to go back and look at my stats, and my best-of page (which amazingly came in at #11) is getting sufficiently long that I need to find additional summarization mechanisms.

So this year, I thought I’d share the top-ten Kellblog posts of 2024 (year to date) regardless of the year in which they were written.

  1. Kellblog predictions for 2024. My tenth annual predictions post topped the list. I’m already working on my 2025 predictions which I hope to publish before the end of December.
  2. What it really means to be a manager, director, or VP. Written in 2015, this continues to be a top post every year and, as a result, is the all-time #1 Kellblog post.
  3. The top 7 marketing metrics for a QBR or board meeting. A 2023 post I wrote after a friend asked: “blank slate, what 5 metrics would you present to the board?” I cheated and did 7.
  4. The key to dealing with senior executives: answer the question. Another perennial favorite, this 2012 post is the one people mention to me the most. Think: “I forwarded that to my team!”
  5. The one question to ask before blowing up your customer success team. The first 2024 post on the list, I wrote this to encourage people to take a minute before Slootmanizing their CS department.
  6. Demystifying the growth-adjusted enterprise value to revenue multiple. This 2024 post explains the metric and, in a quest for syllabic parsimony, suggests naming it the ERG ratio, after the PEG ratio.
  7. Go-to-market troubleshooting, let’s take it from the top. If you’re chronically missing new bookings plan, then read this 2024 post and listen to the SaaS Talk episode that covers it.
  8. Target pipeline coverage is not the inverse of win rate. I saw one too many people invert their win rate to set pipeline coverage targets and wrote this 2024 post to show them the error of their ways.
  9. Simplifiers go far, complexifiers get stuck. This classic from 2015 starts with a poignant joke. Question: What does a complexifier call a simplifier? Answer: Boss. Learn why by reading it.
  10. Playing to win vs. playing to make plan: the two very different worlds of Silicon Valley. This 2024 post explores how the valley has fractured into somewhat distinct VC- and PE-backed worlds.

Keep an eye out for my 2025 predictions later this month. And thanks for reading.

Leave a comment

Posted in Career, Customer Success, Leadership, Marketing, Pipeline, Silicon Valley, Strategy