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In the autumn, the board sets next year's target, higher than this year.
But your sales cycle runs around six months, so the revenue you need early next year has to be in the pipeline by the second half of this year, months before that target even exists.
That pipeline is built on this year's marketing budget, set a year ago, on a smaller ambition, and aimed at this year's number.
Mid-year, this year falls short. Marketing is the easy thing to cut, so the budget that should build next year's pipeline gets cut first.
Next year opens with a pipeline too thin for the target the board just raised.
Sales is handed that gap and told to hit the number. To make it, the team loosens who it chases, taking weaker-fit deals that drag on, and discounts hard to force them into the quarter.
The miss triggers another marketing budget cut, which starves the year after. Then the whole thing runs again, a little worse each time.
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Each year the company competes against its own growth ambition, and pays for it twice, once in the pipeline that never gets built, and again in the discounts that chase the gap. It is hard on the sales team handed a thin pipeline, and hard on the marketing team cut for building the future.
Strategy plans the target, finance sets the budget, and the sales cycle decides the lead time. Each runs on its own calendar, and nobody owns the seam between them, so they collide every year.
Only about a third of companies say their budget reflects their own strategy, and year to year, spending hardly changes. The target gets raised. The money that funds it does not (McKinsey).
When the year falls short, marketing is the first line to be cut, even though it is the budget that should build next year’s pipeline. Under earnings pressure it is the first thing cut, shown across nearly 25,000 earnings calls, and the firms that cut it risk handing about 15% of their business to rivals who keep spending.
91% of executives say they are confident of hitting their targets, while the share that miss keeps growing. Confidence in the autumn is not the same as pipeline in January (Bain).
We take each year of your three-year growth plan and work it backward through your own win rates and sales-cycle length to the pipeline you must hold at each point. That tells you how much pipeline, and how much marketing and sales effort, each quarter has to produce to hit the number.
We set the pipeline milestones, the position you must reach by each quarter to hit next year and the year after, and we cost the effort each one needs. That cost becomes the budget, presented as the price of the target rather than a number to negotiate down.
Each quarter your team checks the real pipeline against the milestone it should have reached, and adjusts spend and effort while there is still time. Because a deal takes months to close, the plan has the team building next year's first-half pipeline well before next year starts, funded for next year's target rather than this year's.
Each year of your three-year plan worked backward through your own win rates and cycle length into the pipeline, leads, and activity each quarter has to produce, drawn entirely from your own results.
Quarterly content, campaign, launch and channel goals sized to those volumes, so planning runs ahead of the year instead of chasing it.
The pipeline position you must reach by each quarter, this year, next year, and the year after, so the team is building next year's pipeline before next year starts, rather than improvising each January.
The cost of hitting those milestones, costed before the planning round and presented as the price of the target, with the real pipeline checked against the plan every quarter.
The 2-minute diagnostic maps your company against all twelve sprints and shows where the Post-Sale Potential Sprint fits in your priorities.
With a sales cycle of around six months, the revenue you need in the first half of next year has to be in the pipeline by the second half of this year, built on a budget sized to next year. Do that, and the year opens on plan. Miss that window, and no amount of selling in January recovers it. This is why the cut that funds a short-term miss is so expensive. It lands on the exact spend that was building the year ahead.
the long-run value at companies that fund growth on evidence and move the budget to it, against those that let last year's allocation roll on (McKinsey).
the rise in B2B sales-cycle length since 2021. The longer the cycle, the earlier the pipeline must be built, and the wider the gap to the target just set.
the pipeline coverage a long sales cycle needs to hit its number, which is exactly why it has to be built so far ahead of the target it serves.
The next step is a 30-minute conversation where we assess whether Pipeline Math is the right starting point for your business.
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