Why back-solving funnel targets works
Revenue targets are outcomes. Funnel targets are controllable inputs. If you know conversion rates and deal size, you can estimate how many leads and qualified conversations you need.
How to do it
- Compute wins needed = revenue target / ACV.
- Convert wins into required opps using opp->win rate.
- Convert opps into SQLs and MQLs using stage conversion rates.
- Convert MQLs into leads using lead->MQL.
Translate wins into pipeline value
- Required pipeline value = required opps * average deal size.
- Implied coverage = required pipeline / revenue target.
- Use coverage to sanity-check pipeline creation goals.
Add capacity and timing constraints
- Check rep capacity (active opps per rep) before raising funnel targets.
- Account for sales cycle length so this quarter's leads map to next quarter's wins.
- Separate inbound vs outbound because conversion and cycle times differ.
Funnel QA checklist
- Use the same stage definitions for conversion rates and targets.
- Remove recycled leads to avoid double counting volume.
- Validate that top-of-funnel volume is achievable by channel.
- Spot-check that conversion rates use the same time window.
Make it accurate
- Segment by channel and ACV band (conversion differs).
- Account for sales cycle lag (this period's leads close next period).
- Use consistent MQL/SQL definitions to avoid denominator drift.
Common mistakes
- Using blended conversion rates that hide weak segments.
- Assuming linearity (conversion often changes with volume and lead quality).
- Ignoring capacity constraints (rep bandwidth).