What is Weighted Pipeline Value?

Weighted Pipeline Value (or Weighted Sales Pipeline) measures the total weighted amount of potential ARR from all active deals. While Pipeline Value sums the total ARR for active opportunities in pipeline, weighted pipeline is weighted based on the Stage Win Rate for each deal stage. Weighted pipeline is a more accurate estimate of Closed Won ARR based on the current pipeline value.

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How do I calculate weighted pipeline value?

Let’s assume we have the following list of deals in our CRM, all at various stages:

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The total pipeline value for these deals is $130,000. To better understand this example, see our Metrics Library article on Pipeline. Note that Fabulous Factories - New Business is omitted from this sum, as the current stage is “Closed Lost”.

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We can summarize our pipeline by Stage to understand how much ARR is in each step of the sales process. To summarize the Pipeline ARR by Stage, we generate the following ARR table:

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While we have the total pipeline value here, we can apply a “Stage Win Rate” to more accurately estimate the Closed Won ARR we expect from our pipeline.

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How should I calculate my Stage Win Rate?

Stage Win Rate is a percentage that calculates how much of the ARR in a particular stage of a sales pipeline is expected to be Closed Won. SaaSGrid uses the stage win rates in your CRM to calculate the weighted pipeline. For more information on Stage Win Rate, see our Metrics Library article here.

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We can then use this number to calculate the amount of ARR we expect to close at each stage by multiplying the Pipeline ARR by the Stage Win Rate.

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After applying the Stage Win Rate to the Pipeline ARR, we now have $2,500 in Stage 1, $16,000 in Stage 2, and $52,000 in Stage 3, for a total weighted pipeline of $70,500.This estimate is more accurate in predicting the total Closed Won ARR based on the current pipeline as it accounts for win rate expectations for each stage.

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SaaSGrid can visualize weighted pipeline, segmented here by stage. Note that the ARR values are different from the unweighted Pipeline, and account for the stage that the deal is in.

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SaaSGrid allows you to explore your pipeline by segments, teams, and even individual customers. Equip your customer teams with the insights they need to deliver with SaaSGrid. Talk to us here to learn more!