Pipeline Velocity: the most essential marketing metric of 2024
Pipeline Velocity, aka Sales Velocity (but as marketers, we care more about the pipeline), refers to the speed with which leads move through the sales pipeline.
AI Summary: The article emphasizes the significance of Pipeline Velocity as a key marketing metric in 2024. Pipeline Velocity refers to the speed at which leads progress through the sales pipeline. The author, Bobby Gillespie, argues that measuring this metric is crucial for understanding the overall health of the sales pipeline. The article stresses the importance of Pipeline Velocity as a critical marketing metric, offering insights into its measurement, the role of marketing in achieving optimal pipeline health, and practical tips for CMOs.
Pipeline Velocity for Marketers: Quick Links
- Pipeline Velocity is a Marketing Metric
- Why Marketing Should Focus on Pipeline Velocity
- How you measure Pipeline Velocity
- What’s the difference between MQLs and SQLs?
- What marketers should measure via Pipeline Velocity
- Tips for the CMO
- Action Step: Get my help
The 411 on Pipeline Velocity
There’s a famous adage in the business world: measure what matters. Good advice, but there’s more to it. Use the correct measurement method to get the insights you want, and then use those insights to make optimal decisions faster.
You’re measuring customer lifetime value, acquisition cost, average deal size, NPS, and total revenue. But you’re missing the essential marketing metric if you’re not measuring Pipeline Velocity since pipeline velocity is a crucial metric that helps you understand the overall health of your sales pipeline.
While the sales teams might measure Pipeline Velocity, the responsibility of a fast-moving pipeline is not on sales, unless they are incompetent, but on marketing.
Data: A Cautionary Tale
All too common today, leaders are using data to make decisions while ignoring goals, objectives, and company vision. This is dangerous and leads to short-sighted decisions that can hurt you long-term. Data is past information, a reasonable means to evaluate your efforts and activities. But it is not something you use to set the vision for your brand; that should come from your CEO.
Anecdotally, a business opened in my community with a concept derived from a random Facebook poll. Someone asked the FB group’s members what they wanted to see in the area. So these guys decided to open a business from the most popular result. It failed in 6 months. They trusted the data too much and never considered how good the data was or their own goals, objectives, and vision for the business, except to make money. That’s as short-sighted as you can get. So, use data to learn, improve, optimize, and maximize your goals, objectives, and vision. But never set your vision, goals, and objectives exclusively from data.
Pipeline Velocity is a Marketing Metric
Good marketing unifies brand, marketing, and sales in strategy, goals, and objectives. If your marketing teams aren’t communicating with your sales teams, you’re like many companies suffering from marketing operations dysfunction; fix that first. [I designed my Advisory Services to help eliminate this dysfunction once and for all. Learn more on here.]
Pipeline velocity is a leading indicator of the effectiveness of your marketing tactics. Good pipeline velocity indicates that your messaging, UX/UI, SEO, and lead generation efforts bring in the right people, say the right thing to them, and provide easy ways to learn more, stay engaged, or buy now.
Suppose your pipeline is quiet or filled with bad leads, slow conversions, or some combination of this ilk. In that case, your poor pipeline velocity clearly shows that your marketing strategy and efforts stink. But that doesn’t mean you must now nuke it from space, but a call to action to revisit your marketing strategy and cross-team operations. (More on this another day.)
Why Marketing Should Focus on Pipeline Velocity
The marketing formula is pretty simple: clearly articulate in the most direct way possible what you do, whom you do it for, how it works, why it’s better, and the costs. In other words, say the right thing to the right people in the right place so they can self-identify that you are the right fit for their situation before they reach out. Thus, once they reach out, you don’t have to sell; you validate the fit and agree to terms. Here is where the brand strategy part of marketing comes into play.
Your brand must position you correctly, providing consistent and measurable messaging and design systems optimized based on your defined positioning and ideal customer profile (ICP) that help marketing and sales convey what you are good at, your distinct competencies, and your precise goals and objectives.
In the age of measuring everything and the demand for good data, here’s the value of this approach. How do you know if your brand and marketing strategies are working? Pipeline velocity! If you have a healthy pipeline and sales teams are closing deals fast, then that’s a sure sign that your marketing works.
You will save time, money, and resources by utilizing pipeline velocity as your go-to method to measure marketing efficacy.
How you measure Pipeline Velocity
- The number of Marketing Qualified Leads (MQL) that become Sales-Qualified Leads (SQL) in your pipeline
- The average time from MQL to SQL to Closing
- The time and cost to attract and convert new customers
- Your sales team’s overall win rate percentage
- Your sales team’s average deal size
What’s the difference between MQLs and SQLs?
Both marketing and sales qualified leads must match your ideal customer profile (ICP). But their differences are generally around where they are in their buying journey. If you don’t have your perfect customer profile, we have a Brand Strategy Workshop to help you with that; it’s good stuff and has helped many marketing leaders like you.
Sales Qualified Leads (SQL)
- Ready to buy
- Engaged in bottom-of-the-funnel activity
- At the decision-making stage
Marketing Qualified Leads (MQL)
- Not ready to buy
- Engaged in top-of-the-funnel activity
- Has an interest in your offering and company
Once your ideal customers move closer to being ready to buy, if your marketing has been effective, consistent, and complete—as proven by your pipeline velocity metrics—you have a greater chance to close that deal than if you run in different marketing.
What marketers should measure via Pipeline Velocity?
Assuming you have a rock-solid brand foundation and platform (if you’re not sure, or you don’t, we have a Workshop for that. If you need larger high-performing creative efforts, check out our Creative Services), you should test the following through pipeline velocity:
- Strategic Offers
- Landing Pages
- User Experience
Tips for the CMO
Chief marketing officers, directors, and leaders should pay more attention to pipeline velocity. As we laid out above, there is no better metric in 2024 to prove your worth and effectiveness. The team at Propr wants our marketing partners to become rock stars. Here are some tips for improving your team’s performance and outcomes by measuring pipeline velocity.
CMO Tip 1: Let’s face it: marketing budgets are the first cut, while marketing teams are responsible for revenue goals. It’s unfair, but it’s reality. While cutting marketing budgets makes no sense, this fact offers little argument to plead your case. But now, you have pipeline velocity metrics in your marketing report, and what do they show? They show that marketing filled the pipeline with quality and qualified leads, but the conversions remained low, so perhaps sales are the natural scapegoat, and you have proof your budget is worth it.
CMO Tip 2: If you genuinely care about brand performance, use your pipeline velocity data to showcase the effectiveness of your marketing strategy and efforts. The data doesn’t lie, so get that performance bonus or promotion by presenting your Pipeline Velocity metrics.
If you’re reading this, you’re a marketing or sales leader with specializations and expertise in a few areas. But what may be lacking is a quality-oriented, intentional, simple, and holistic approach to unifying marketing, business development, and sales with systems and processes that perform and provide consistent, repeatable, and reliable results.
That’s precisely what my approach delivers. Let’s connect.
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