What is a weighted pipeline?
A weighted pipeline is a sales pipeline tracking metric used in sales forecasting that gives each chance a weighted score showing how likely the deal will close on average.
Chances are given weights based on where they are in the buying process, who has the power to make decisions, how many other chances are out there, and how often deals like the one being tracked have closed in the past.
Giving each opportunity in the pipeline weight can help a business get a better picture of its total sales performance and predict what will happen.
People who work in business-to-business (B2B) sales usually use weighted pipelines. This is because the sales cycle is longer and more complicated in B2B sales, so keeping track of things more closely than in B2C sales is necessary.
Synonyms
- Weighted Sales Pipeline: In sales, this term is often used interchangeably with the term weighted pipeline.
- Sales Scorecard: A sales scorecard is a tool that allows sales teams to compare their performance against goals across multiple metrics. In this context, “weighted pipeline” is sometimes used to refer to a sales scorecard with weighted pipeline data included.
- Value Selling: Value selling is a customer-focused approach that emphasizes demonstrating tangible value for the customer in every sale.
The term “weighted pipeline” may refer to assigning weighted values to customer opportunities to assess and forecast their likelihood of closing more accurately.
What can a weighted pipeline do for you?
A sales company can get a lot out of using a weighted pipeline. More information about the status of opportunities in the pipeline and how likely they are to close; more accurate predictions of future outcomes; better efficiency and effectiveness in sales operations; more focus on high-value opportunities; higher close rates and revenue growth.
By taking advantage of these benefits, sales teams can advance in their market and make their sales efforts more successful.
Problems that come with a weighted pipeline
Adding weighted pipelines to the sales process does come with some difficulties. These include:
- Accurately gathering information about customer opportunities and sales stages at the right time
- Finding solid metrics for giving each opportunity weight
- Updating values regularly as deals move through the pipeline;
- Making correct predictions about results when the market or other outside forces change
You can deal with these problems by planning, working together as a team, and using sales technology to make data collection easier.
Making a Sales Pipeline with Weights
To make a weighted sales pipeline, you need to decide what pipeline metric you want, gather relevant data, and give different parts of the sales process different amounts of weight.
Describe the stages of the pipeline or opportunity
A company must first choose the metric it will use to measure its sales success. For example, the close rate or the average deal size could be used.
Once this choice is made, the team can gather information about possible customers, put it in order, and give each step in the process some weight.
Teams should figure out the most important steps or goals that need to be reached for a deal to close. This could include prospecting, qualifying leads, making proposals, negotiating terms, and finishing the deal.
An organization should weight each stage based on how often opportunities at that stage close and how important that stage is compared to other stages. One example is that a team might give more weight to a sale’s finishing stage than to the proposal stage.
Give each stage of the pipeline some weight.
An organization should weight each stage based on how often opportunities at that stage close and how important that stage is compared to other stages.
One example is that a team might give more weight to a sale’s finishing stage than to the proposal stage.
Also, the weights will change based on how well the team does at each step. For example, if a team closes 80% of deals during the proposal stage but only 20% during the negotiation stage, it might give more weight to the negotiation stage.
Gather and Look Over the Data
Teams can gather information about customer chances in each stage once the stages are named and given weights. This list may include account size, deal worth, customer contact information, and other things that can help teams find trends and make better choices about moving deals through the pipeline.
Teams can determine how well their sales process works by looking at performance measures like close rates and conversion ratios for each opportunity in the pipeline.
By looking at this data, teams can also find ways to improve the weighted pipeline model and change the weights as needed.
When to Use a Sales Pipeline With Weights
Businesses should use weighted sales channels sometimes and not other times.
A weighted sales pipeline works best when:
- You need to keep track of chances and get a better idea of how likely it is that a deal will go through the next stage
- Customer data can show some trends that can help with making decisions
- The sales team needs a better way to track their progress toward their goals
- Other businesses in the same field are using weighted channels successfully
- One thing that shouldn’t be done with a weighted sales pipeline is when:
- There isn’t enough good data to give weights
- The data is hard to understand because the sales process is complicated
- The sales flow is constantly changing
- The team has better ways to track progress.
Businesses can learn much about their sales process and make better decisions about their deal cycle if they know when to use a weighted sales flow and how to make one.
Teams can be sure to focus on the most important and valuable tasks to meet their goals if they have the correct data and weights.
Pipeline Metrics With Weights
The metrics used to measure the weighted pipeline depend on whether a business needs to predict expected sales or income.
How to Guess How Many Items Will Sell
Companies should use the following measures to guess how much money they will make from sales:
- % of Opportunities Closed: This measure shows how many Sales Qualified Leads (SQLs) make it through each stage. This helps teams see patterns in how they make sales and focus on the things that are more likely to lead to closed deals.
- Weighted Close Rate: This is the percentage of closed opportunities and the weight given to each step. It’s more likely that possible sales leads will be closed if the weighted close rate is high.
- Average Order Value: For each customer, the average order value tells teams how much money they can expect to make. This helps them figure out how hard they need to work to make a sale and how many new customers they need to reach their sales goals.
How to Set Goals for Earned Money
When teams figure out how much money they expect to make from customers, they should use the following metrics:
- Average Deal Size: This tells teams how much money each customer can expect to make. Typically, you can calculate this by dividing the total revenue a group of customers generates by the number of those customers.
- Weighted Deal Value: This is the average deal size plus the weight given to each step. The more valuable a deal is, the more likely teams will meet their income goals.
- Price per unit: This number tells teams how much money they can expect to make from each sale. This measure helps them determine how much money they can expect to make and then set their prices accordingly.
- Annual Contract Value: Like the average order value, this number tells teams how much a customer is worth over a year and helps them make plans.
Technology for a Weighted Sales Pipeline
There are a few ways for businesses to set up and manage their weighted sales channels.
Tools for Managing Opportunities
Teams can use software like Salesforce or HubSpot to get detailed reports that help them look at their weighted sales pipeline and make better choices.
Teams can also use these tools to automate tasks like forecasting, customer segmentation, and keeping track of sales.
CRM
Most new CRM systems come with advanced analytics that can be used to rate customers’ chances and keep track of how well they’re doing.
Another good thing about CRM systems is that they can keep track of customer information and make reports that can be used to improve sales over time.
Configure, Price, Quote (CPQ) software makes sales more accessible by letting teams make quotes quickly and correctly based on customer wants. This helps teams find chances faster and make more accurate predictions about how much money they will make.
