Pipeline maths for capital equipment
A capital equipment pipeline cannot be forecast with software-style conversion rates. The cycle runs six to eighteen months, four people are involved, and the budget cycle is not yours to control. What makes the number credible is stage definitions tied to buyer decisions and assumptions you can see.
Why the standard model does not transfer
Most pipeline models assume many small deals, a short cycle and a single decision maker. Capital equipment breaks all three assumptions. You have few deals, each large; a cycle measured in quarters; and a decision that needs a lab manager, a technical evaluator, procurement and a budget holder to agree.
Apply a software-shaped model to that and you get a forecast that moves every month for reasons nobody can explain.
Stages are buyer decisions
The most common defect I see is stages named after internal activity: contacted, demo delivered, quote sent. Those describe what your team did, and a deal can sit in "quote sent" indefinitely while nothing happens.
Rewrite each stage as something the buyer has decided. The lab has agreed the current method is inadequate. The technical evaluator has run their own samples. Procurement has been engaged. The budget holder has confirmed a budget line and a timeframe.
Each of those is verifiable, and each has a natural next action. It also becomes obvious which deals are not real, which usually shrinks the pipeline on first pass. That is the correct outcome.
Write the assumptions down
Any forecast rests on a handful of numbers: how many qualified conversations you can start per quarter, what fraction reach technical evaluation, what fraction of those close, and how long each step takes. Most are estimates early on.
Put them in a visible list with a note on how confident you are in each. Then you can see which single assumption the plan depends on, and go and test that one rather than arguing about the total.
Nurture over quarters, not weeks
If the decision is twelve months out, a five-email sequence is not a nurture programme. What works is periodic contact with something genuinely useful attached — application data on their material, a method comparison, an invitation to a session — spaced over quarters.
The goal is to be the company they call when the constraint finally bites. That is a positioning outcome achieved through patience, and it does not fit in a monthly campaign report.
Written by Matthew McGann, President and Owner of Particle Analytx. More about the practice.
Questions on this piece
What conversion rate should I assume?
Yours, measured — not a benchmark. With too few deals to measure, state the assumption explicitly and mark it as unverified rather than importing a number from another industry.
How do I handle the budget cycle?
As a gate rather than a probability. A deal that has no budget until next January cannot close in November whatever its stage.
How many stages should we have?
Four or five. Each one has to be a buyer decision, not an internal task.
Recognise the problem?
If this describes where you are, thirty minutes on a call will get further than another article.