The Commensurate Pipeline: A Good Goal?

Commensurate means equal in measure or extent; proportional; balanced.

For startup CEOs, CFOs and CROs / CSOs, cash management and your sales pipeline management are two of the most important responsibilities you have that help insure a successful business.

This question comes up frequently in board meetings: How is your pipeline distributed in terms of large-medium-and-small customers (both in absolute size and account ARR)?

In other words, what happens when your sales pipeline – and therefore your revenues – are dominated by one or two “Whales”? Or, when your pipeline and customer base consist mainly of a bunch of medium-sized customers, sometimes called “Dolphins”.  Or, when small customers who make small purchases – so called “Minnows” – constitute a big portion of your pipeline or source of revenues?

(Alternative taxonomical references are sometimes “elephants”, “deer” and “rabbits”. I prefer the ocean animal taxonomical references mainly because most whales are simply physically larger than elephants – although they are no less noble nor any less endangered.)

Two interrelated questions: When your sales pipeline is dominated by one type of customer what does this say about your product(s) and separately, your sales team, pipeline and processes? Here are some answers to these questions:

• Domination by a Whale

  • Your company does not have full product and market fit.

  • Your product probably requires UI work, or simplification of technology, or feature set.

  • Your customers have the requisite infrastructure and data – especially budget and personnel – to use your product(s) but so few of these size and type of customers exist.

  • Your sales team and processes (i.e., sales ops and enablement) – mainly personnel – are enterprise sales oriented and your marketing is not implementing ABM is a comprehensive way. (SEO is a waste of money.)

  • Your channel or partners are totally underperforming.

• Domination by a Dolphins

  • There is more product and some market fit in this case versus the preceding type example but your technology and/or organization cannot scale-up for global enterprise(s) nor scale-down for small companies.

  • Graphically, your pipeline is probably not shaped like a pyramid or a equally divided rectangle; it’s probably shaped like an hour-glass.

  • Your sales, marketing team and messages are oriented toward large accounts and not global org’s. You don’t have truly effective big game (Whale?) hunters on the enterprise sales team and lack at the same time effective junior AEs and BD reps for smaller or medium-sized customers.

  • You do not have any high-end partnerships which will help forge enterprise-scale customer engagements, or a channel to product small and medium-sized sales.

• Domination by a Minnows

  • You have both product and market fit for a single customer segment – small customers – but lack the technology, marketing/messaging/brand, service capabilities and infrastructure, and/or sales team to sell effectively to both Dolphins and Whales.

  • Your company’s marketing and/or channel and/or partnerships are yielding Minnow leads, engagements and sales. You need to upscale these.

  • It may be appropriate to ask yourself if sales to Dolphins and Minnows are not expanding as rapidly as desired because you are so focused on technical support and sales to your Whale(s)?

How do you fix your pipeline so it’s more commensurate? Here are 5 suggestions:

1. First, do a taxonomy. Divide your pipeline into Whales-Dolphins-&-Minnows (or Elephants-Deer-&-Rabbits) by revenue, resources assigned and total up the number of companies.

2. Align your corporate messages with this taxonomy. For example, global enterprise versus large or small company messaging are too heavily being used.

3. Do a deep analysis of your sales org: Are your team members global enterprise, large company, medium and small company sales representatives?  Are they elephant or rabbit hunters? Related question: Are they hunters or farmers? What would it take for them to evolve? Are your BDR and sales enablement functions similarly stacked?

4. Do a deep analysis of your marketing team: Does your head of marketing have an enterprise or other marketing orientation? Is he or she an agency, corporate, startup or other marketing type? How’s your ABM? Is it limp, or not set for high performance?

5. Look at your processes through the customer journey. Are your processes frictionless or friction-full? Do your processes, terms and conditions, etc. support corporate purchasing processes?

Finally, do a bottoms-up pro-forma revenue analysis and overlay your budget for headcount and other major costs. One conclusion that this analysis can produce: You may not need a commensurate pipeline if together your Dolphins and Whales “bring home the bacon”.

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