I recently sat with a manufacturing CEO who was visibly frustrated. His sales forecast showed $2M in pending deals, but quarter after quarter, his actual revenue came in way below projections. His solution? He'd just increased the pipeline requirement to 5x quota, thinking more opportunities would solve the problem.
It didn't.
Here's the thing: Arbitrary pipeline multipliers are like throwing darts blindfolded. You might hit the target occasionally. You hit someone in the head with a dart. You can't count on arbitrary metrics. And in today's market, you need reliability, not luck.
Let me share how we solved this.
This CEO had a clear goal: $5M in new revenue for the year from their aftermarket parts division. Good start. But when I asked about their conversion rates between sales stages, the room got quiet. Like many leaders, they were flying blind.
Let's fix that by working backward from the goal to create metrics that mean something.
Start with the End in Mind
First, we break down that $5M annual goal:
- $5M ÷ $50K (average sale) = 100 deals needed
- 100 deals ÷ 12 months = 8.3 deals per month
Now we're getting somewhere. Eight to nine deals monthly sounds more concrete than "we need $5M." But here's where many leaders stop. They take this number, multiply it by some arbitrary factor like 5x, and call it a day.
Instead, let's keep working backward.
Follow the Conversion Trail
In this CEO's case, we mapped their actual sales process:
- 30% of proposals turn into deals
- 40% of discovery calls lead to proposals
- 25% of first conversations become discovery calls
Now the math gets interesting:
- To get 9 deals, you need 30 proposals (9 ÷ 0.30)
- To get 30 proposals, you need 75 discovery calls (30 ÷ 0.40)
- To get 75 discovery calls, you need 300 first conversations (75 ÷ 0.25)
Suddenly, we're not guessing. We know exactly what activity needs to happen each month to hit the goal.
Make It Real
Break this down into weekly activities:
- 75 first conversations per week
- 19 discovery calls
- 7-8 proposals
- 2-3 closed deals
Now your sales team has clear, achievable weekly targets. No more arbitrary multipliers. No more hoping and praying. Just clear expectations based on real data.
But here's where it gets powerful.
Real Forecasting Power
When the CEO started tracking these specific metrics, three things happened in 2 quarters:
- They could spot problems early (like not enough first conversations). You can also identify wear the sales manager should be coaching the reps. Not all will have the same challenges.
- They could identify exactly where deals were stalling. This helps the leader understand if it Is it the process, management, or people issue?
- Most importantly, their forecast accuracy jumped from 40% to over 85%. Everyone can make better decisions when the data is trustworthy.
Why? Because now they were measuring what mattered, not just what was easy to track.
The Real Challenge
Here's the truth many leaders miss: The problem isn't usually at the bottom of the funnel. It's at the top. When you know you need 300 first conversations to hit your number, you can't hide from reality. Either you're having those conversations, or you're not.
This CEO discovered they weren't even having half the required first conversations. No wonder the forecast was off! No amount of pipeline multiplication would fix that.
Take Control
Want to build reliable forecasts? Start here:
- Define your revenue goal
- Calculate needed deals based on average sale size
- Track your actual conversion rates at each stage
- Work backward to required monthly and weekly activities
- Measure and adjust based on real data, not guesses
Remember: You can't improve what you don't measure correctly. And you can't measure correctly if you're using arbitrary metrics.
Stop guessing at your pipeline requirements. Start building forecasts based on reality. Your sales team will thank you. Your board will thank you. And most importantly, you'll finally have the predictable revenue growth you've been looking for.
Want to learn more about building reliable sales forecasts?
Let's talk about what you are measuring and what you aren't. Reach out to me to have a Sales Math conversation. In 20-minutes, you will see the challenges and have questions to take back to your sales leadership. If that is you, well you can fix it. Email me here.
