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Reply To: How does a pipeline work?

Chip Griffin
June 2, 2022 at 11:10 am #19605

The term “pipeline” just refers to your current list of active prospective clients/projects. It’s not a list of people you would like to do work for, but rather a list of specific possible opportunities that you are taking steps to try to win.

Tracking these can be as simple as a spreadsheet or as complex as a CRM like Salesforce or Hubspot that lets you track individual opportunities. As you note, they can be broken into stages that give you a weighted revenue forecast based on the likelihood of a deal to close based on the stage it currently sits in.

For example, something in the “Contract Sent” stage should be much more likely to close than one in the “Discovery” stage.

How (or if) you set up stages is up to you. Generally, you want to keep things as simple as possible while still gathering the information you need to make reliable forecasts and to facilitate closing as good prospects in your pipeline as you can.

As far as the size of your pipeline, it depends on your historical data. Look at the percentage of prospects that usually turn into clients. Then look at how many clients you are seeking to acquire in the next year. If you want to sign 5 new clients and 20% of prospects become clients, then you would need 25 prospects in your pipeline to get there.

Of course, those clients and prospects may be spread out over time, so you may only need 10-15 at any given time to hit those targets. That will depend in large part on how long it takes (on average) from initial conversation to when they become a client.

I think the most important takeaway is that you need to have some way to keep track of your prospective clients and projects so that things don’t fall through the cracks and so that you have some idea of what your future revenue might look like. Add complexity only as necessary to help you achieve those goals better.

Chip Griffin founded the Small Agency Growth Alliance (SAGA) to help PR and marketing agency owners achieve their goals.

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