The weighted sales pipeline is a key metric used in sales operations to evaluate the health and predicted revenue performance of a sales team. It goes beyond looking at the raw number of sales opportunities by assigning a weighted value to each opportunity based on its estimated likelihood to close.
How weighted sales pipeline works
First, each opportunity in the pipeline is scored on criteria like the size of the deal, the stage it’s in, the customer’s buying signals, and other factors that predict the probability it will result in won business. Deals that are bigger or have stronger buying signals get a higher score.
Next, each deal is assigned a percentage likelihood to close based on historical conversion rates from that scoring combination. For example, a $10,000 deal in the proposal stage might have a 20% chance to close based on past data.
The weighting factor is calculated by multiplying the deal size by its percentage probability. So that $10,000 deal would have a weighted value of $2,000 ($10,000 x 20%).
All the weighted values are added together to get the total weighted pipeline number. This provides a much more realistic forecast of predicted revenue than just adding up all the raw deal sizes, since it accounts for deals that are likely to fall out.
The weighted pipeline shows the sales operations team where revenue risks lie based on deals unlikely to convert and helps them coach sales reps on closing gaps. It provides revenue forecasting that helps inform wider business decisions based on the sales team’s probable performance. And it lets sales leaders better understand projected commission payouts.
In summary, the weighted sales pipeline applies probability scoring to opportunities to convert raw deal amounts into weighted values that predict true expected revenue for sales operations planning.
