• Revenue Operations Forecasting

Preparing Your Pipeline for IPO

Steve Fitz

Steve Fitz
Chief Revenue Officer, Sumo Logic

Preparing Your Pipeline for IPO

Successfully launching an IPO involves many factors, including an impeccable product market fit, rigorous revenue processes, and continuous cash flow.

Despite the odds and in the midst of the pandemic, Sumo Logic rang the NASDAQ bell in September for our initial public offering to overwhelming optimism in the market. As Chief Revenue Officer of the company, I couldn’t have felt more gratified—certainly for my team, but also for everything we learned along the way. 

In my recent interview on The Forecast, I outline some of our top takeaways.

Preparing the sales pipeline for IPO was one of the most profound learnings of the experience. What follows below are my top three areas for pipeline enhancement to prep for a public offering. 

Let the right data dominate 

In a world where everything is measurable, sales teams must look at the metrics that will deliver maximum growth. In SaaS, the most important categories are:

  • New logos
  • Cross-sell
  • Upsell
  • 100 ARR 

Your renewal metrics are key, and when you enter the public market they become mission critical. The ability to retain and expand your current customer contracts can promise annual recurring revenue growth, regardless of which new accounts sign on. Relentlessly measure these metrics. They are your best bet for maximum growth. 

Prosecute your pipeline

As companies prepare to go public, they must have business predictability and forecastable revenue. Pipeline is one of the best leading indicators of future growth, so take the time to get the process right. 

Many companies focus on the topline side of the pipe, but at Sumo Logic, we have gone deliberately into stage conversion across the customer journey spectrum, which has been infinitely more effective for us. We don’t call this pipeline inspection as other companies do. We think of it as pipeline prosecution, to convey the thoroughness of the checks and cross-checks. 

For example, we have eight stages in the buying process. We examine the conversion per stage. Then we conduct a detailed inspection of what’s working and what’s not. This includes weekly stand-ups with our marketing counterparts of the different programs we're working across different segments of the business geographies. These forecasts are conducted at the executive level, regional, and sub-regional level. 

In the year and a half before our IPO, we amped up our prosecution of the pipe, as well as the ROI of the pipe we were generating. We expect our sellers to generate about 50% of their pipe, and then our marketing demand gen team is responsible for the other half, which is achieved on a macro basis. 

When you go public, all your revenue information will soon be under a microscope. Your pipeline inspection needs to be airtight well before the IPO. 

Drive even tighter alignment between sales and marketing

The cooperation and the collaboration between sales and marketing has never been more evident, especially in this virtual environment. Propelling that alignment between marketing and sales is critical to pipeline success before and after IPO. 

Chief Revenue Officers should partner with Chief Marketing Officers on a weekly basis to ensure their teams work in harmony and anticipate upcoming needs. At Sumo Logic, we sponsor a meeting between sales and marketing where we tackle the biggest issues. We bring these items to a team that spans from eight to 10 people every week. 

During this meeting, we go after the challenges with a great deal of candor on both sides. We're not afraid to call out the things that aren't working. We address them and figure out a way to improve the execution on each matter. 

The road to IPO

The technology of this generation is truly amazing. New and improved products emerge every day, making the competition fiercer than ever. 

The best way for global sales teams to stay competitive and scale their pipelines is to deliver instantaneous value. This means partnering with Customer Success more tightly to create outstanding customer experiences that build lasting relationships. When you can accomplish this, the possibilities for retention, account expansion, and customer advocacy become easy. 

This is the present and the future of sales pipeline success. Get those things right, and you’re on your way to a prosperous public offering. 

About the Author

Steve Fitz is the Chief Revenue Officer of Sumo Logic, which provides best-in-class cloud monitoring, log management, Cloud SIEM tools, and real-time insights for web and SaaS based apps.

*Sumo Logic is a Clari customer. Read more customer stories here.

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