David Cummings on Startups

Developing a Weighted Sales Pipeline

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David Cummings

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Oil and gas pipeline
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Continuing the sales pipeline theme from yesterday, I wanted to take the pipeline concept once step further and talk about a weighted sales pipeline. A weighted sales pipeline is a much more detailed pipeline where each prospect opportunity is given a specific value based on where they are in the buying process. So, instead of saying that we have 20 prospects, you might say we have 20 opportunities at 50% or greater likelihood of closing with a weighted pipeline value of $100,000.

Here’s how the values of a weighted pipeline might look with the percentage being the chance of closing the deal:

  • 10% Prospecting/Qualification
  • 20% Needs Analysis/Value Proposition
  • 30% Proposal Sent
  • 50% Identifying Additional Decision Makers
  • 60% Second Demo (Post Proposal)
  • 70% Negotiation / Review
  • 75% Acceptance Sent
  • 90% Acceptance Reviewed
  • 90% Proof of Concept
  • 100% Closed Won
  • 0% Closed Lost or Deal Dead

Developing a weighted pipeline gives you a much better proactive view into the future health of the business. I recommend weighted pipelines for all entrepreneurs.

What else? What are your thoughts on weighted sales pipelines?

Comments

3 responses to “Developing a Weighted Sales Pipeline”

  1. Jeff Barnes Avatar
    Jeff Barnes

    David,
    If by ‘Proposal Sent’ you mean pricing etc. shouldn’t this go after the Second Demo as things could come up during it that need to be included in the proposal?

    Reply
    1. David Cummings Avatar
      David Cummings

      Good question. It really depends on your sales process. The weighted pipeline example I outlined is similar to the one we use but not exact.

      Reply
  2. John Kauffman Avatar
    John Kauffman

    Weighted pipelines are the surest way to get to a position of failure in the fastest possible time. Deals are either valued accurately or they are not. If a prospect has a quote for $10,000 then they will spend on or around that number if the deal is closed. They won’t spend 20% of it based on the stage in the sales cycle. The measurement of the sales cycle stage and the timescale to a potential close and then an accurate forecast value in that timescale is a far more accurate route to reliable forecasting. The information you are providing in this blog, along with pretty much the entire CRM developer community is doing the sales industry an enormous disservice.

    Reply

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