KPI Example

What is Weighted Pipeline Value?

The Weighted Pipeline Value is a measure of sales forecasting, found by determining the likelihood of closing the deals you have at the moment. Because assessing the chances of closing a deal can be difficult, this KPI helps evaluate appropriate risk levels for your company’s pipeline.

One of the most valuable aspects of this KPI is its flexibility – you get to decide what percentage level of risk is acceptable at each stage of the sales pipeline, and define what “risk” or “success” means to begin with. So long as your standards are justifiable and consistent, your Weighted Pipeline Value will prove a powerful and valuable tool.

Weighted Pipeline Value is a useful KPI for your sales team to monitor.

Just what do we mean by Weighted Pipeline Value?

Weighted Pipeline Value is important because it measures the amount of revenue can expect to obtain in the near future, based on the the likelihood of your deals clearing their current stages in the pipeline.

Here's how to obtain your Weighted Pipeline Value:

First, you assign each stage of the pipeline a probability, or weight–a projection of how likely it is that your deal will clear each stage.

You multiply the values of your deals by the weight of their current stage in the pipeline, and then add the results together.

For example, Deal A is worth €50,000. It's at the "lead qualification" stage of the pipeline, which you give it a 50% chance of passing (a 50% weight).

Meanwhile, Deal B is worth €100,000. It's at the "close" stage of the pipeline, which you give it a 90% chance of passing (a 90% weight).

  • Deal A: 50% x €50,000 = €25,000
  • Deal B: 90% x €100,000 = €90,000

Your current projected revenue total is €115,000: your Weighted Pipeline Value.

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Weighted vs. Unweighted Pipeline Value: What to measure?

Because Weighted Pipeline Value is a descriptor and not a quota, it reflects the sales process rather than your actual goals. In other words, this KPI synthesizes the accumulated data of your sales pipeline.

The Weighted Pipeline Value stands in contrast to the Unweighted Pipeline Value, which takes into account only whether a deal was made or not. Both metrics can be useful in different contexts – the weighted value when detailed data exists about the sales pipeline stages; when customer trends can be easily identified; and when it is industry practice to use Weighted Pipeline Value.

On the other hand, Unweighted Pipeline Value is better for those cases where the pipeline funnel becomes too complex to make accurate predictions, or if reliable sales data is unavailable. In these cases, the sale / no sale binary is the only information you’re trying to find.

Other KPIs similar to Hit Rate include:

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