The Outbound Bottleneck
Accounts > Relevance > Personalization
I've talked about the account selection bottleneck and its impact on pipeline with several folks since I presented it at GTM 2024.
The topic came up again last night during Jen Allen-Knuth's fantastic presentation at the Sales Assembly dinner in NYC. ICP definition and account prioritization are crucial because relevance matters, not BS personalization.
It’s simple: wrong accounts => no relevance => no replies => no meetings => no pipeline => no wins.
Now if you'll forgive me, let me drag Jen's crisp points into an overlong discussion of some operations theory and math. (Please try to hold your applause until the end.)
Theory of Constraints
Outbound is like an assembly line. Each stage’s output feeds into the next as input.
This means we can take a lesson from lean manufacturing guru Eliyahu Goldratt's Theory of Constraints model.
The core idea is that there’s always a largest constraint—the bottleneck—that makes the whole system less productive.
Say you've got a machine in the middle of your assembly line that constantly breaks down. If you don’t fix that, your tweaks to loading finished product on the truck don’t matter. Nothing you do *before or after* the bottleneck will increase production. To produce more, you must eliminate the bottleneck.
The outbound bottleneck
Same goes with accounts in outbound. If your ICP and account selection are wrong, no amount of activity increase or message tweaking creates more outbound pipeline. And no amount of “more leads” will make any material difference.
Here are some slides with a handy graphical illustration of the math.
First up, we’ll do a little basic pipeline math, working backwards from a target set of wins:
This says we need 1,000 accounts in a territory and 10k activities from the rep to have “enough” accounts to hit their number. Now, let’s take a look at how that might play out in real life.
In reality we don’t really engage with everyone. But we did fine on all our conversion rates so we ended up with 18 wins. It’s pretty close. It’s not quite clear where the bottleneck is, so let’s dig a little deeper.
This is the same output and overall conversation rates as the prior slide, but we’ve drilled into the accounts. The reality for most territories is that some set of accounts are truly good and the rest are filler. The really good ICP fits convert to meetings and closed/won at a much higher clip. The low fit ones, not so much. In fact only 2 wins come from low-fit accounts.
So let’s see what happens if we reduce the total accounts but increase the percentage that are high fit.
Low and behold, the rep has to cover fewer accounts and ends up with one more win.
The rep could have done drastically more activity and it wouldn’t have really made a difference. The bottleneck is the account quality. There you have it.
Better accounts => more relevance => more replies => more meetings => more pipeline => more wins. In that order.