The formula
Pipeline value = the total value of open deals
Weighted pipeline value = the value at each stage x your win rate from that stage, added up
How to calculate pipeline value
Pipeline value is the simple one: add up the value of every open deal. That tells you how much is in play, and the weighted figure below tells you how much of it is likely to close.
Weighted pipeline value multiplies each stage's total by the share of deals that go on to win from that stage, then adds the stages up.
Worked example, with made-up figures: you have $400,000 of open deals. $200,000 is at the first meeting stage, where 10% of deals go on to win. $120,000 is at proposal, where 35% win. $80,000 is in negotiation, where 60% win.
- First meeting: $200,000 x 10% = $20,000
- Proposal: $120,000 x 35% = $42,000
- Negotiation: $80,000 x 60% = $48,000
Weighted pipeline value is $110,000. Against a $100,000 target for the month that's only just enough, even though the $400,000 total looks like four times what you need.
Where the stage rates come from
Take the deals that reached each stage in the last six months and have since been won or lost. The share that won is that stage's rate. If 20 deals reached proposal and 7 of them won, the proposal rate is 7 / 20 = 35%.
Use your own rates, not the default percentages a CRM fills in. A default is a guess somebody made for every company at once. The win rate calculator works out the rate from your own won and lost deals.
Why a healthy pipeline number misses the month
- A deal with no reply in a month still counts at full value until someone takes it out.
- Deals marked for this month slide into next month one at a time, and the total doesn't warn you when they go.
- The stage rates are someone's guess: if proposal is set to 50% and your deals win 35% from there, the weighted figure runs high every month.
- One large deal can carry the total, because a single $80,000 deal weighted at 60% adds $48,000 even though it will close at $80,000 or at nothing.
Worked example, with the same made-up pipeline: one $50,000 deal in negotiation hasn't replied in five weeks. Take it out and the negotiation total drops to $30,000, which weights to $18,000. The weighted pipeline falls from $110,000 to $80,000, and the month is $20,000 short. Better to know that on the 5th than on the 28th.
What a good pipeline value looks like
We don't print an industry figure. The pipeline you need comes from your own target and your own win rate, which is what pipeline coverage measures. Good is a weighted pipeline for the month at or above what's still left to close, built only from deals with a recent contact and a close date in the month.
| Who's looking | What they check | What good looks like |
|---|---|---|
| Sales manager | Weighted pipeline due this month and next, each week | At or above what's still to close, after stale deals come out |
| Rep | Their own open deals, each with a next step | No deal without a dated next step |
| Founder or owner | Weighted pipeline against the forecast | The two within a few percent, month after month |
Work out your pipeline value
Weighted: $110,000
- Pipeline value: $400,000
Where it shows up in your week
A pipeline is only as honest as its last update. The CRM shows every prospect on a board by stage, with the clients you haven't spoken to lately at the top.
Related KPIs, terms and tools
Questions managers ask
Sources
The page states no outside figure, so there's nothing to cite here.