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17 Crucial Sales Pipeline Metrics Your Team Needs to Track
Let’s dive into the pipeline metrics that can drive success.
1. Number of Opportunities
What is the number of opportunities?
This metric quantifies the total number of leads you’ve assessed as “having a likelihood to purchase” based on predefined criteria.
But what exactly qualifies an opportunity?
Well, criteria varies across organizations.
It can encompass factors such as:
- Company size
- Budget
- Timeline
- Decision-Making Authority
- Location
- Actions Taken (such as support requests, downloads, etc)
- And so on
Note: Leads don't always need EVERY piece of criteria to be moved into an opportunity, but that depends on your organization.
Why is the number of opportunities important?
It’s a foundational metric for your sales pipeline analysis, offering insights into the health of your lead generation efforts.
How to measure opportunities?
First, establish clear criteria for what qualifies an opportunity.
Use frameworks like BANT (Budget, Authority, Need, Timeline) or MEDICC (Metrics, Economic Buyer, Decision Criteria, Identified Pain, Champion, Competition) to shape your sales qualification process.
For example, with the MEDDIC framework, you’re looking at:
- Metrics: Understand which key performance indicators (KPIs) and metrics matter most to the prospect. How can your solution impact these metrics positively?
- Economic Buyer: Identify the person with the authority and budget to make purchasing decisions. This is the ultimate decision-maker.
- Decision Criteria: Determine the specific criteria a potential customer will use to evaluate solutions. What factors are essential for them to consider your offering?
- Identified Pain: Pinpoint the prospect’s pain points and challenges. How does your solution directly address and alleviate these issues?
- Champion: Find an internal advocate within the prospect’s organization who supports your solution. This person can help drive the decision-making process.
- Competition: Understand who else is vying for the prospect’s business. Who are your competitors, and how does your solution stand out?
Finally, assign scores to each potential customer based on how well they meet these criteria, with higher scores indicating stronger qualifications. Many traditional CRMs automate opportunity and lead tracking to make sales pipeline management easier.
However, these tools also come with certain limitations, which we’ll cover later.
How often should you track opportunities?
Monthly or semi-monthly, allowing enough time to gather sufficient data.
You can adjust the frequency based on the specific needs and dynamics of your business.
Some businesses might find it necessary to track opportunities weekly, especially with large lead volumes, rapidly changing market conditions, or a specific marketing push for a particular season, event, product release, etc.
Acceptable ranges
It can differ for every company and may evolve over time or if goals change.
To contextualize this, you need to look at other metrics like win rate, and sales cycle length.
Shortages typically require action, like increased marketing spend, or better lead generation tactics.
2. Number of New Leads
What is the number of new leads?
The number of new leads is a metric that counts the total number of new leads who have just entered your sales funnel.
Why is the number of new leads important?
This metric is crucial in sales and marketing as it helps in assessing the effectiveness of marketing campaigns and strategies in attracting potential buyers.
Tracking each new prospect is essential for understanding market reach, gauging campaign success, and planning future marketing efforts.
Additionally, by comparing the number of new leads to the number of opportunities, you can determine the quality of your lead generation efforts.
Are they generating viable prospects that typically end up becoming opportunities?
Or are they largely junk leads with no real future potential?
How to measure number of new leads
Start by selecting a specific time frame to measure the number of new leads (e.g., week, month, or quarter).
Next, utilize your lead tracking system to count and record these newly acquired leads. Finally, analyze trends and compare the results with your lead generation goals to assess performance.
How often should you track the number of new leads?
Daily, weekly, or monthly, depending on the volume of leads generated and the pace of your lead generation activities.
Acceptable ranges
The acceptable range varies based on business goals, industry, and lead generation strategies. It’s essential to set realistic targets for lead quantity and quality to align with your overall marketing and sales objectives.
3. MQL-to-SQL Conversion Rate
What is MQL-to-SQL conversion rate?
This is the percentage of marketing qualified leads your team has successfully converted into sales qualified leads.
Typically, when a lead transitions from an MQL to a sales qualified lead, it means a salesperson has vetted them enough to devote more sales resources to it.
Typically, the MQL transitions to SQL when an SDR or entry level salesperson, schedules a meeting for the Account Executive.
Sometimes, these meetings are also scheduled by the Account Executive themselves who then use that first call to determine whether the sales qualified lead should become an opportunity
Why is MQL-to-SQL conversion rate important?
This metric indicates the overall efficiency of your lead qualification process. High conversion rates suggest effective lead nurturing and alignment between marketing and sales teams.
How to measure MQL-to-SQL conversion rate
The formula is:
MQL-to-SQL Conversion Rate=Number of SQLsNumber of MQLs100
For example, if you generate 80 MQLs and convert 20 of them into sales qualified leads, your calculation is:
MQL-to-SQL Conversion Rate=2080100=25%
When expressed as a ratio, your MQL-to-SQL ratio is 1:4.
How often should you track MQL-to-SQL conversion rate?
Monthly. This frequency allows for more timely adjustments and insights into the effectiveness of your lead qualification efforts.
Alternatively, check this metric if there's a specific event or campaign that marketing runs. It is helpful to isolate those numbers to determine which efforts are resulting in the highest quality leads so you can focus resources there for better lead generation.
Acceptable ranges
Higher conversion rates indicate a well-aligned sales and marketing process.
According to RevOps Squared, the median MQL-to-SQL conversion rate is 20%.
However, the acceptable range can vary widely by industry and business.
For example, as per First Page Sage, MQL-to-SQL conversion rates in different B2B industries are as follows:
- Fintech: 42%
- Legaltech: 40%
- Cybersecurity: 38%
- Insurance: 28%
Adjust your target based on your specific goals and historical performance.
4. Lead Velocity Rate (LVR)
What is LVR?
Lead velocity rate compares the number of leads generated in the current period to the previous one, indicating whether your lead generation is accelerating or decelerating.
While you can mention LVR for any kind of lead, it’s typically done for qualified leads.
Why is LVR important?
LVR offers insights into the momentum of your lead generation, aiding resource allocation and sales strategy decisions. It helps you assess the effectiveness of your lead generation efforts.
How to measure LVR
The formula is:
LVR=Current month's leads-Last month's leadsLast month's leads100
For example, if you had 200 leads in the previous period and 250 leads in the current period:
LVR=250-200200100=25%
How often should you track LVR?
Monthly or quarterly so you can monitor trends and make timely adjustments.
Acceptable ranges
Specific target rates vary by business goals, industry norms, or specific events and marketing initiatives.
A low LVR suggests the sales team isn’t bringing in enough qualified leads to sustain revenue growth or surpass previous levels.
5. Average Deal Size
What is average deal size?
This sales pipeline metric quantifies the monetary value of a typical sale.
Why is average deal size important?
Tracking the average value of each sale is crucial for forecasting, setting each sales target, and evaluating the overall value of your sales pipeline.
It’s also important to determine if your lead generation efforts are attracting the right kind of customers. For example, if your average deal value for Q4 was much lower than the last quarters, you’re not attracting the ideal leads.
How to measure average deal size
The formula is:
Average Deal Size= Total value of closed-won opportunitiesTotal no. of closed deals
Let’s say you successfully closed 40 deals in a given month. If you generate $120,000 from these deals in that same period, your calculation is:
Average Deal Size= $120,00040=$3,000
However, it might be useful to remove outliers (such as really huge deals) in certain situations to not skew this data.
How often should you track average deal size?
Monthly, quarterly, or as often as necessary to monitor changes.
Acceptable ranges
There’s no set benchmark. It depends on your industry, product or service pricing, and business goals.
As a general rule of thumb, you can expect enterprise-level deals to be worth millions. Meanwhile, a small business can usually close deals anywhere between a few hundred dollars to several thousand.
According to a 2022 survey, the biggest majority of respondents said they didn’t even know what their average deal size was. The second biggest majority reported an average deal value of $1,000-2,000 (HubSpot).
It’s essential to optimize deal size to meet targets and market conditions.
6. Sales Cycle Length
What is the average sales cycle length?
This sales pipeline metric represents the time it typically takes for a lead to move from initial contact to a closed won result.
Why is average sales cycle length important?
This metric is your trusty tool for better sales forecasting. With it, you can anticipate when opportunities will translate into revenue, helping you set more achievable targets.
If your sales cycle is unexpectedly longer than usual, it could signal snags in your pipeline that are holding things up.
How to measure average sales cycle length
The formula is:
Average Sales Cycle Length=Total number of days in sales cycleNumber of deals closed
What are the total number of days each deal was in your pipeline from initial contact to close. Divide that by the number of deals that you closed.
So for example, if you closed 6 deals in the span of 120 days:
Average Sales Cycle Length=1206=20 days
How often should you track average sales cycle length?
Regularly track this metric (i.e., monthly) to assess changes in the sales process and make timely adjustments when necessary.
Acceptable ranges
The shorter your sales cycle, the better.
However, as for how many days it should be, that varies by industry norms and product complexity. For example, B2B products typically have longer sales cycles than B2C ones because they generally involve more decision-makers in the buying process. Similarly, the more complex your product is, the longer you can expect your sales cycle to be.
That said, recent research shows that the typical B2B sales cycle is 22.9 days in the software and tech industry.
7. Win Rate
What is your win rate?
Win rate compares the number of successful deals won against the total number of opportunities over a period.
Why is win rate important?
It reveals how well you’re converting opportunities in your pipeline into paying customers.
If you’re generating a lot of opportunities but dealing with low win rates, it could indicate inefficiencies in your closing process.
Additionally, if you have low win rates, you might have to raise your ideal pipeline coverage to ensure you meet your targets.
How to measure win rate
The formula is:
Win Rate=Number of salesNumber of opportunities100
For example, if your sales team successfully closes 20 out of an overall 80 opportunities, your calculation is:
Win Rate=2080100=25%
How often should you track win rate?
Monthly.
Acceptable ranges
In a 2021 survey by the RAIN Group Center for Sales Research, the average win rate was 47% across industries and company sizes.
However, an acceptable win rate might look completely different based on your industry and context. Consider your revenue goals, growth targets, competitive landscape, and market conditions.
8. Sales per Rep
What is sales per rep?
Sales per rep is the total income each representative in your sales team generates for a period.
Why is sales per rep important?
This metric is vital for insights into the sales performance of individual team members and for fostering team-wide accountability.
By spotlighting your top performers, you can ensure that compensation aligns with individual sales contributions and focus additional resources and support on underperformers.
How to measure sales per rep
You can usually use a CRM to track sales per rep, per team, region, and product automatically.
How often should you track sales per rep?
Monthly or quarterly, although you need to consider the specific quota and sales cycle for each sales rep.
For example, some reps will have an annual quota, meaning this metric isn’t worth making real business decisions off of if you’re only looking at a rep’s sales performance over one month or even three months.
Acceptable ranges
Ideally, a sales rep should yield around 3 to 5 times their compensation in revenue.
But this quota might not apply to your business — acceptable ranges depend on your industry and the duration and complexity of your sales pipeline.
9. Sales per Team
What is sales per team?
This metric calculates the total income that individual or multiple sales teams generate within a given period.
Why is sales per team important?
It reveals how effectively a sales unit functions as a whole, facilitating smarter resource allocation and target prioritization. Additionally, it allows you to pinpoint high-performing teams and leverage their strategies for training and improvement across all teams.
Note that high sales performance might not always be the result of collective effort, but individual sales reps. As such, it’s worth looking at other metrics such as sales per rep to identify the reasons behind a specific team’s success.
How often should you track sales per team?
Weekly, monthly, quarterly, or annually.
Acceptable ranges
Benchmarks vary widely, depending on your business goals, sector, and team dynamics.
For example, larger teams will naturally have more resources to achieve greater revenue growth.
That said, a small business with a focused team full of sales professionals can be far more effective than a larger yet uncoordinated team of inexperienced salespeople.
10. Sales per Region
What is sales per region?
Sales per region is the total income generated from a specific geographic region.
Why is sales per region important?
You can identify the most profitable regions, helping you tailor your marketing and sales strategy for specific geographical areas.
How often should you track sales per region?
Monthly or quarterly.
Acceptable ranges
There’s no standardized figure to aim for. You must consider the competitive landscape and benchmark past regional performance to identify trends for your own sales pipeline analysis.
11. Sales per Product Or Feature
What is sales per product or feature?
This metric is the total revenue from individual products or product features.
Why is sales per product or feature important?
By looking at the sales performance of specific offerings, you can prioritize and optimize your product development, pricing plans, and marketing efforts to maximize profitability.
How often should you track sales per product or feature?
Monthly, quarterly.
You’ll want to track it more regularly if you’re assessing the impact of new feature rollouts.
Acceptable ranges
Benchmarks vary widely based on your business goals and product portfolio.
12. Total Pipeline Value (TPV)
What is TPV?
This sales pipeline metric is the sum of the potential value of all deals in each pipeline stage at a given point in time.
Essentially, it represents the entire worth of your sales pipeline.
Why is TPV important?
By tracking TPV, businesses can estimate future revenue potential based on the value of each current sales opportunity, making it a valuable component of sales forecasting.
You can compare TPV with your win rates to forecast how much revenue you can expect to close in a period. Combined with your sales cycle length, these pipeline metrics should give you a comprehensive view of your revenue potential.
How to measure TPV
Each opportunity is typically assigned a monetary value, which can be an estimated sales amount.
The value of opportunities may be adjusted based on their pipeline stage and the likelihood of closing.
How often should you track TPV?
Weekly or daily
Acceptable ranges
TPV can vary widely depending on your business, industry, and goals. Generally speaking, a larger TPV typically indicates more revenue potential — but not all deals will close.
It’s essential to be realistic about the likelihood of closure and evaluate other factors, like historical conversion rates and pipeline value by stage.
13. Pipeline Value by Stage
What is pipeline value by stage?
This metric represents the total potential revenue associated with deals at each pipeline stage.
Why is pipeline value by stage important?
This metric gives businesses a more focused view of revenue potential, distinguishing the value of deals in the latter stages like “Negotiation” or “Proposal.”
As these are the latter stages of your sales pipeline, deals here are much more likely to close. Hence measuring the value of deals will likely give you a more realistic estimate of your expected revenue.
How often should you track pipeline value by stage?
Weekly or daily
Acceptable ranges
There are no specific benchmarks.
14. Pipeline Value by Forecast Category
What is pipeline value by forecast category?
This metric represents the total potential revenue associated with deals in different forecast categories.
A forecast category classifies each opportunity based on how confident a salesperson is at winning the deal. Each organization may have its own forecast categories tailored to its specific needs.
It’s vital to check with your CRM or sales manager to ensure consistent understanding and usage.
For example, in Salesforce, the default forecast categories are Pipeline, Best Case, Commit, Omitted, and Closed.
Why is pipeline value by forecast category important?
Tracking this metric provides a high-level view of when revenue is expected to be realized. For example, it distinguishes deals in the “Pipeline” category (less likely to close) from those in the “Commit” category (more likely to close).
It helps sales teams and organizations to better plan and allocate resources and make informed estimations about revenue.
How often should you track pipeline value by forecast category?
Weekly or daily for companies with shorter selling cycles.
Acceptable ranges
There are no specific numerical ranges for this metric.
15. Sales Pipeline Coverage
What is pipeline coverage?
This sales pipeline metric compares the total value of all opportunities to your quota within a given period.
Why is pipeline coverage important?
The idea behind this metric is to ensure that you have enough potential revenue in your sales pipeline to meet your targets. If the coverage ratio is too low, you may not have enough potential revenue to achieve your goals.
How to measure pipeline coverage
The formula is:
Pipeline Coverage=Total pipeline valueSales target or quota
Let’s say your sales target is $2,000,000.
Using the example above, if your TPV is $4,000,000, your calculation is:
Pipeline Coverage=$4,000,000$2,000,000=2:1
How often should you track pipeline coverage?
Weekly or monthly.
Acceptable ranges
While a coverage ratio figure of 3:1 is often mentioned as one to shoot for, it’s important to note that the aim is to achieve adequate coverage to consistently meet your quotas.
You need to analyze your own win rates to accurately determine the coverage you need to meet your targets. For example, if your average win rate is 25%, you’ll likely need a coverage ratio of 4:1 to meet your quota.
16. Customer Acquisition Cost (CAC)
What is CAC?
CAC is how much money you spend on getting new customers through marketing and sales efforts. These expenses might include campaigns, advertising, lead generation, sales calls, product demos, etc.
Why is CAC important?
Customer acquisition cost is crucial for evaluating the efficiency of your sales and marketing programs and identifying the most affordable acquisition channels.
When compared with customer lifetime value, it gives you an idea of how sustainable your current customer acquisition strategy is.
How to measure CAC
The formula is:
CAC =Total sales and marketing expensesNumber of new customers acquired
For example, if you gain 500 new customers after spending $20,000 on marketing and sales activities, your calculation is:
CAC =$20,000500=$40
How often should you track CAC?
Monthly, quarterly, or yearly. It depends largely on your sales cycle length.
You can measure CAC against past performance to identify trends over time.
The goal is to continually reduce your customer acquisition costs over time.
This way, you can see whether your current sales strategy is resulting in sustainable growth or if you need to consider other acquisition channels.
Acceptable ranges
The lower your customer acquisition costs, the better.
However, it does vary based on industry, market saturation, and other factors.
For example, the CAC for an Enterprise client will naturally be much higher than a B2C one.
While there’s no universal standard, you can use the CAC:CLV ratio to help you establish a benchmark.
17. CLV:CAC Ratio
What is CLV:CAC ratio?
This metric compares customer acquisition cost to customer lifetime value — which is an estimate of the total value a customer might bring to your business throughout their lifecycle.
Why is CLV:CAC ratio important?
This metric provides a comprehensive look at your sustainability, revealing whether a customer’s average revenue exceeds the cost of acquiring them.
How to measure CLV:CAC ratio
The formula is:
CLV:CAC Ratio=CLVCAC
Using the examples above, if customer lifetime value is $900 and CAC is $300, your calculation is:
CLV:CAC Ratio=$900$300
If you divide both figures by this number, your CLV:CAC ratio is 3:1.
How often should you track CLV:CAC ratio?
Quarterly.
Acceptable ranges
According to Toward Data Science, a CLV:CAC ratio of 3:1 or more is ideal. Essentially, the goal should be to ensure a customer’s total value is around three times or more than what it costs to acquire them.
With the essentials of these pipeline metrics under your belt, one question remains:
Are you tracking what matters most to your business?
How to Choose the Right Pipeline Metrics
Before you start tracking metrics, it helps to focus on what truly drives your business forward. Here are some tips:
- Identify Key Sales Objectives: Break down your business goals into specific sales objectives. For example, if your goal is to simply increase revenue, consider whether you need to focus on increasing deal size, closing rates, or lead generation based on where you’re falling short right now.
- Select Metrics Aligned with Objectives: Choose metrics that directly align with your sales objectives. For example, if your goal is to boost close rates, focus on metrics like win rate or sales cycle length.
- Account for Individual and Team Performance: Consider metrics like the percentage of reps to hit quota, activity levels, and response times, as these are essential for gaining insights into individual performance and can be valuable in various organizational setups.
However, even with a well-defined sales process and methodology, another critical aspect to consider is the tools you use for tracking sales pipeline metrics and pipeline management.
Let’s delve into the challenges you might encounter when using traditional CRMs to monitor your pipeline metrics.
The Problem with Using Traditional CRMs to Track Pipeline Metrics
While CRMs are essential for managing data, including deals and stage progressions, traditional options like Salesforce have drawbacks when it comes to sales pipeline analysis.
Complex interfaces in these CRMs can hinder efficient data navigation, tracking, pipeline management, and real-time insights. It can also result in sales reps deviating from established sales processes and methodologies, such as MEDDIC.
This can lead to team members recording data outside the CRM, resulting in outdated, inaccurate, or simply missing information where sales leaders expect to find it.
Furthermore, the resource-intensive nature of implementing and maintaining such CRMs can be especially daunting for smaller businesses with limited resources, requiring substantial investments in time and training.
It’s no surprise that so many sales teams forecast in spreadsheets instead of CRMs – even though it’s incredibly inefficient!
Luckily, there’s a solution:
Make Your Pipeline Work For You with Scratchpad
Elevate your Salesforce experience and prevent crucial data from slipping through the cracks with Scratchpad!
Say goodbye to switching back and forth between multiple spreadsheets and tabs in Salesforce — Scratchpad’s all-in-one platform allows you to maintain an organized and visually intuitive pipeline without the need to overhaul your existing practices.
This newfound clarity liberates your sales team to channel their expertise towards what truly matters: generating new opportunities, progressing deals through each pipeline stage with speed, and of course, closing deals.
Make updates to relevant fields, automate the forecasting process, and conduct in-depth deal inspection from various perspectives with ease.
Let’s take a deeper look:
- Streamline updates with advanced views, enabling quick and easy modifications to fields, objects, or next steps in Salesforce.
- Create workflow tiles for shortcuts to essential data.
- Enhance your sales pipeline analysis by identifying gaps with deal spotlights, get alerts about missing fields, and ensure your deals accurately align with close dates and forecasts.
- Connect your Salesforce workflows to your notes and seamlessly edit, share, and templatize them for future use.
- Set up automations in Slack and transform tedious manual processes into effortless workflows — no coding required.
- Automate forecast roll-ups from the sales rep to leadership level to see which data points and past changes are tied to opportunities.
- Use trends analytics to visualize forecasts based on historical data, track deal progress, and ensure you hit your quota.
Mastering Sales Pipeline Metrics for Sustainable Growth
With the right pipeline metrics, you gain the power to boost sales efficiency and make informed decisions to increase revenue.
However, in order to leverage these metrics, you need the right tool to help you manage them.
Which is where Scratchpad comes in.
Take your Salesforce operations to the next level, and sign up for Scratchpad today to start your journey to success!
