1. SOLVING FOR ‘X’: Pursuit of the Perfect Pipeline Joe Galvin, Vice President and Service Director Sales Optimization Strategies December 7, 2010

2. Executive Summary Key issues A focus away from pure demand creation and toward sales execution is needed Without the right data, diagnosing sales enablement gaps is guesswork The art of the possible has been replaced with the science of the possible – we need to change What you will walk away with Results from SiriusDecisions/Cloud9 groundbreaking study on linking pipeline analysis with sales productivity Ideas, tactics and action items you can use to better enable sales productivity in your organization New ways to measure sales productivity Source: SiriusDecisions 2

3. Agenda SiriusDecisions Brief Introduction Pipeline Dynamics The Concept of the “Perfect Pipeline” Pipeline Survey Data When Less is More Measuring Sales Productivity Using Pipeline Analytics to Target and Measure Sales Enablement Initiatives 3 Joe Galvin VP & Service Director SiriusDecisions, Inc. Tel: (203) 665-4018 Twitter: @JoeGalvin

4. Effective decision making today requires… Demand Creation Process Sales and Marketing Integration New Ideas New Trends Budget Comparison Inside Sales Structure Marketing Performance Sales Optimization Sales Training Channel Management Channel Marketing Organization Structure Reputation Building Measurement Market Requirements

5. SiriusDecisions Offering Architecture 5

7. Analyst inquiry

8. Monthly research briefs

9. Core Strategy Reports

10. Executive peer roundtables

11. Monthly research webcasts

12. Annual assessment

13. Research portal accessAdvisory Services Sales Optimization Strategies ChannelManagement Strategies MarketingOperations Strategies Product Marketing /Management Strategies 6

15. iCentera

16. Sant/Kadient

17. SAVO Group

18. ZoomInfo

19. Cloud9

20. ValueVision

21. Infomentis

22. Corporate Visions

23. InsideView

24. Xactly

25. Callidus

26. Alinean

27. Genius

28. Brainshark

29. Benchmark

30. Sales Operations Audit

32. Agenda SiriusDecisions Brief Introduction Pipeline Dynamics The Concept of the “Perfect Pipeline” Pipeline Survey Data When Less is More Measuring Sales Productivity Using Pipeline Analytics to Target and Measure Sales Enablement Initiatives 9 Joe Galvin VP & Service Director SiriusDecisions, Inc. Tel: (203) 665-4018 Twitter: @JoeGalvin

33. SiriusPerspective: A popular strategy for selling in the down economy was to increase the pipeline revenue value to goal ratio Suspect Qualified Solution Close Negotiate 10% 25% 50% 99% 75% Selling in Down Economy: The Great Recession Forecast Pipeline: Quota 3:1, 4:1 5:1 or N:1? $1.273 $987 $632 $256 $125 Pipeline Source: SiriusDecisions SiriusDecisions Research Brief: “Pipeline to Quota: Is Three-to-One Done?” 10 10

34. SiriusPerspective: The disconnect between sales and marketing is exacerbated by their very different measurement approaches. Spct Qlfy Prop Sol Demo Selling Cycle 10% 20% 33% 75% 50% Sales and Marketing Disconnect: Pipelines and Waterfalls Inquiries Sales Marketing Contribution? Original Demand Gen? Quality of Pipeline? Where to Help? MQL SAL SQL Marketing Contribution to Pipeline? Revenue Contribution? Targeting Enablement? Pipeline Acceleration? Closed Source: SiriusDecisions SiriusDecisions Research Brief: “The Facets of Forecast Management” 11

35. SiriusPerspective: To drive collaboration, sales and marketing need a common, integrated view of opportunities and their attributes. Spct Qlfy Prop Sol Demo Selling Cycle 10% 20% 33% 75% 50% Opportunity Lifecycle Management Demand Creation Integrated Pipeline Inquiries Qualified Opportunity (SQL) Sales Productive Prospecting Targeted Marketing Enablement Alignment Lifecycle Transparency MQL Develop Solution SAL Demonstrate Value SQL Marketing Measured Contribution MQL Revenue Closed Loop Targeted Enablement Propose Closed Close Source: SiriusDecisions SiriusDecisions Research Brief: “The Case for Building a Productivity Pipeline” 12

36. X-Ray vs. MRI SiriusPerspective: Sales and marketing need a more complete view to diagnose what’s really happening in the opportunity pipeline. Traditional Pipeline One-dimensional view Conversion rates - Mkt Projected Revenue - Sls Opportunity Lifecycle Pipeline Multi-dimensional view – by phase Revenue Conversion rates Sales cycle length Success profiles Source: SiriusDecisions 13

37. SiriusPerspective: The opportunity lifecycle is measured by volume, revenue, conversion rates, sales cycle and buying phase length. Pipeline Dynamics: Opportunity Lifecycle Visibility 14 Top of the Pipeline Identifies sources of opportunity Conversion Rates Measures quality (effectiveness) Cycle Length Measures effort (efficiency) Closed Loop Revenue Provides opportunity lifecycle transparency Source: SiriusDecisions SiriusDecisions Research Brief: “Leveraging Pipeline Milestones to Drive Productivity”

38. SiriusPerspective: Increasing the number/value of pipeline opportunities does not have a linear effect on decisions won. Solving for “X” 4, 5 or 6:1 3:1 X = (C x C) x V X X Capacity: Number of active opportunities Conversion: Percentage of active opportunities that close Velocity: Sales Cycle Length Source: SiriusDecisions SiriusDecisions Research Brief: Harnessing the Power of the Pipeline 15

39. SiriusPerspective: Intense adherence to the success criteria and qualification phase means only winnable opportunities are pursued. Pursue the Perfect Pipeline Qualified Opportunity (SQL) 2. Qualification Advance only the opportunities that align with the success profile Develop Solution 3. Execution No time, energy or resources wasted on unwinnable opportunities that artificially inflate pipeline values to satisfy arbitrary 3:1 ratios Demo Value Propose 1. Analysis Establish “Success Profile”: the DNA of Wins: demographics, source, value, activities and velocity 4. New Metrics for a New Age Close Sales Capacity: Number of active deals Sales Productivity: Net new active opportunities Average deal size Average sales cycle length Pipeline Benchmarks: How well you sell Source: SiriusDecisions SiriusDecisions Research Brief: “The Pursuit of the Perfect Pipeline” 16

40. SiriusDecisions/Cloud9 Survey on Forecasting/Pipeline Best Practices Business-to-Business Sales Organizations Looking to what, why and how companies measure their pipeline Split findings into two groups: those that manage pipeline to quota of 3X or less, and those that manage 4X or higher Wave II survey is still active:www.siriusdecisions.com Initial phase of the Pipeline Genome Project 17

41. 2010 Pipeline/Forecast Best Practices Survey Companies that manage a pipeline of 3X or less had a 32% better close rate. 18 Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010

42. 2010 Pipeline/Forecast Best Practices Survey We asked what percentage of your reps were at quota or better? 19 57% of companies at3X or less had 60% or more of their reps at quotacompared to only 36%for4X or higher. Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010

43. 2010 Pipeline/Forecast Best Practices Survey Companies that manage a 3X pipeline or lesswere more than twice as likely to use a third-party pipeline analytic tool 20 Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010

44. 2010 Pipeline/Forecast Best Practices Survey Over 20% of companies that manage a 3X or less pipeline reported that they had the ability to report on their pipeline with flexibility. 21 None of the companies managing a 4X or higher pipeline reported they had flexibility in managing their pipelines. Source: SiriusDecisions/Cloud9 Pipeline/Forecast Best Practices Survey 2010

45. Sales Productivity: At the Top of Leaders’ Minds SiriusPerspective: Sales and marketing leaders have recognized that what got them here won’t get them “there.” Activities Productivity Pipeline Sales Productivity Opportunity Breakpoint Efficiency (time & energy) How do I get there? How do I do that? Effectiveness (quality & results) 22

46. SiriusPerspective: Increasing the productivity of salespeople results in more high-quality customer interactions. Activities How much time and effort does it take to… Find a prospect Create a solution Craft a proposal Increased Productivity More Opportunities Shorter Sales Cycles Larger Deal Size Higher Win Rates Productivity Process Skills Tools Efficiency (time & energy) What is the quality and customer relevance of… Suspect touches Prospect interactions Client relationships Knowledge Effectiveness (quality & results) Optimizing Sales Productivity 23 Source: SiriusDecisions SiriusDecisions Research Brief: “Productivity: More Than Just the Topline”

47. Power of Pipeline Dynamics: Pipeline Intelligence 24 SiriusPerspective: Identifying an “opportunity breakpoint” targets sales and marketing initiatives where they will have the most impact. Demand Creation Marketing Sales Enablement Sales Playbooks SME Resource Messages Sales Qualified Opportunity Solution Opportunity Breakpoint Demo Sales Sales Activities Skill Development Product Training Specialists Propose Close Source: SiriusDecisions SiriusDecisions Research Brief: “ Productivity Benchmarking: Measuring How Well You Sell”

48. Pipeline Velocity is Really Decision Velocity SiriusPerspective: Look at what is happening with your Buyers’ Journey to understand where deals get stalled. SiriusDecisions Buying Cycle Demand Creation Sales Qualified Opportunity One: Loosening of the Status Quo Two: Committing to Change Solution Three: Exploring Possible Solutions Four: Committing to a Solution Demo Five: Justifying the Decision Six: Making the Selection Propose Close Source: SiriusDecisions

49. Measure Sales Productivity SiriusPerspective: A unified productivity pipeline measures effort and quality to establish productivity benchmarks and define action. 26 Recycle Zone Stall Zone Days to Convert Qualified Solution Demo Close Propose 28 28 Selling Cycle 25 22 21 SellingZone Order Convert Rate 70% 86% 67% 63% 80% 20% 28.5% 33.3% 63% 50% Close Rate Source: SiriusDecisions SiriusDecisions Research Brief: “Better Forecasting Through Factual Factoring”

50. Thank You SiriusDecisions Brief Introduction Pipeline Dynamics The Concept of the “Perfect Pipeline” Pipeline Survey Data When Less is More Measuring Sales Productivity Using Pipeline Analytics to Target and Measure Sales Enablement Initiatives 27 Joe Galvin VP & Service Director SiriusDecisions, Inc. Tel: (203) 665-4018 Twitter: @JoeGalvin

51. Recommended Research Pipeline to Quota: Is Three-to-One Done? The Facets of Forecast Management The Case for Building a Productivity Pipeline Leveraging Pipeline Milestones to Drive Productivity Harnessing the Power of the Pipeline The Pursuit of the Perfect Pipeline Better Forecasting Through Factual Factoring Productivity: More than Just the Topline Productivity Benchmarking: Measuring How Well You Sell Better Forecasting Through Factual Factoring 28 Source: SiriusDecisions

52. SOLVING FOR ‘X’: Pursuit of the Perfect Pipeline Joe Galvin, Vice President and Service Director Sales Optimization Strategies December 8, 2010