15 Sales Pipeline Metrics to Track for Better Quality Deals
Tracking sales pipeline metrics is just a part of a sales leader's job.
But why do certain metrics like lead conversions and average deal sizes matter?
No, it's not just because it's in your job description or to make that quarterly report sound better.
The truth about sales pipeline metrics is some are more valuable than others, and a whole bunch of them are just there for vanity. But the right metrics can help you understand your sales pipeline, where your reps spend their time, and how to convert more opportunities into paying customers—if (and only if) you track them properly.
In short, tracking the right metrics is essential to effective sales pipeline management. So which ones are the right ones? We’ve compiled a list of the 15 most important sales pipeline metrics that actually help your business grow and level up your selling strategy.
Let's get started 👇
15 Sales Pipeline Metrics to Track for Better Quality Deals
It’s time to get a better bang for your buck. Learn about the best metrics you can track in your sales pipeline, and how you can use them to improve the quality of your deals.
If you want to enhance your sales pipeline, consider implementing effective account-based sales strategies.
1. Average Sales Cycle Length
Average sales cycle length tells you how long it normally takes a lead to move through your sales funnel and turn into a paying customer—from initial contact to closed-won.
Tools like the Close Sales Funnel Calculator can provide insights into the average length of your sales cycle, helping identify bottlenecks and inefficiencies.
The length of your sales cycle can significantly impact your revenue. And the right sales cycle length is a kind of “how long is a piece of string” question. But what we do know is locking down SaaS companies and closing B2B deals takes a long time. According to Databox, the benchmark to seal the deal is around 60 days.
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If you track the average sales cycle length, you can identify any bottlenecks in your sales process and take appropriate action to speed things up.
This metric is important because it can help you identify inefficiencies in your sales process and make adjustments to improve it. To calculate your average sales cycle length, track the time it takes to close each sale and divide by the total number of sales in that period.
Why average sales cycle length is important: This metric is super helpful in managing predictability in your sales forecasting. If your sales reps hit targets and get a certain number of leads into your sales funnel, calculating the average length of a sales cycle helps forecast revenue.
How to track average sales cycle length: First, collect some data. You're going to need basic information about every deal that's entered your sales funnel (ideally, a year's worth to give you a more accurate metric). Then, add the # of days from first touch to conversion together for all closed deals in your pipeline. Once you've got that, crunch these numbers:
Total (#) of days for all sales combined / (#) of deals = Average Sales Cycle length
For example, if you've closed 50 deals and it took a total combined time of 2,100 days, your Average Sales Cycle is 42 days. Obviously, the shorter the sales cycle—the better. Check out some tips from our CEO, Steli Efti, on how to cut the number of days in a sales cycle:
2. Win Rate
Win rate is the percentage of deals your team managed to close compared to how many leads were floating around in your pipeline.
Keeping track of your team’s win rate gives you a surface-level understanding of how your reps are performing. If your pipeline has 100 good-quality leads, but your team is only converting a tenth of them, that's a warning sign that you need to take another look at your strategies and sales process. If you segment the data, win rate can also help you determine the success of different sales or marketing campaigns or your team’s upselling efforts.
Why win rate is important: It's a simple way to see how effective your sales reps are when closing deals with prospects.
How to track win rate: Track your win rate by dividing the number of closed deals by the total amount of opportunities in your sales funnel. Or, get a sales tool to do it for you. Close can automatically track win rate across multiple stages of your opportunity funnel.
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What's great about this opportunity funnel report is it tracks the time it takes for deals to move between each stage. So if a ton of opportunities are getting stalled between demo and proposal, it could be a sign your team needs to sharpen its pitch or signal a problem with pricing.
Hey you...ever wondered about the concept of total contract value? Dive in here.
3. Average Deal Size
Average deal size is how much a normal deal in your pipeline is worth. It's ideal to get an understanding of how much cash your sales team can generate and what to expect from the average prospect.
But an underrated aspect of tracking average deal size is highlighting the most popular plan or product in your arsenal. For example, about 80 percent of all new Close customers are startup founders or SMB owners and go for our mid-range plan. So on the surface, our average deal size is about $300/year.
Why average deal size is important: Calculating Average deal size can help companies forecast revenue, determine how many sales reps are needed to meet growth goals, and identify which products or plans are driving the most cash into your bottom line.
How to track average deal size: Pick a period of time (like last quarter or the past year) and calculate the total revenue earned in your pipeline. Then, divide it by the number of deals you've closed.
For example, if your team has closed 15 deals this quarter at the value of $300,000, the calculation will be:
$300,000 / 15 = $20,000
Easy!
4. Conversion Rate by Pipeline Stage
Conversion rate by pipeline stage can help you identify where deals get stuck and if the way you handle demos or contracts needs to be adjusted.
This metric is a more detailed look into your pipeline analysis as it lets you see any major bottlenecks or holes in your sales funnel. For example, if a ton of opportunities disappear after getting a demo, it could be a sign your team needs to sharpen up its pitching skills or that your pricing is too high. Or if a lot of qualified prospects aren't scheduling a demo, it's a warning sign your follow-up game isn't strong enough.
Either way, this metric is a perfect way to find any weak spots in your pipeline.
Why conversion rate by pipeline stage is important: This metric identifies where deals are getting stuck so you can make adjustments to move them forward.
How to track conversion rate by pipeline stage: I'm going to be totally honest. This metric is a hard one to keep track of without a CRM tool because there are so many moving parts. If you are already using a CRM to track pipeline activity, the tool will automatically keep tabs on the total number of leads that are converting.
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5. Average Conversion Time by Pipeline Stage
This metric tracks the amount of time it takes for opportunities to move across different sales pipeline stages.
If you are wondering which part of the pipeline is inefficient or where you need to make improvements to speed up your sales cycle—this metric is the one to track.
Why average conversion time by pipeline stage is important: It's one of the most accurate ways to spot bottlenecks in your sales pipeline and figure out where deals are getting stalled.
How to track conversion time by pipeline stage: Again, a good CRM is your best friend for tracking this metric. When you move a deal to the next stage in your pipeline, a CRM will calculate how long it took and also create averages across all the opportunities in your pipeline. Close can even track how conversions move between pipeline stages daily:
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This gives you granular detail of pipeline conversions, like whether certain stages convert better depending on the day of the week or how many demos your reps can handle a day.
It's also a good idea to keep this data on hand so you can compare the conversion rate over time.
6. Sales Opportunities Created
This metric is the number of qualified leads your team has managed to draw into your sales funnel. It usually measures how many opportunities are created in a specific timeframe, like a week or a quarter, so you can compare it to your sales targets.
It shows how effective marketing strategies and outreach efforts are to generate leads and it can also identify any gaps in your sales process where opportunities might be falling through the cracks.
Why sales opportunities created is important: It gives you a solid grasp of how effective your marketing and lead generation efforts are.
How to track sales opportunities created: Count the number of new opportunities that are added to your pipeline over a certain time. If your marketing team launched a New Year's Eve campaign, track how many sales opportunities were created between the start of January to the end of March to see how successful it was.
7. Customer Acquisition Cost (CAC)
CAC is how much it costs your team to acquire a new customer. I'm talking about the total spend to get them into your sales funnel and nurture them right up until they sign a contract.
The lower your CAC, the more money your team is bringing in for each customer.
Ideally, CAC should be "paid back" within 3-12 months of acquiring a customer, depending on how big the contract is. For example, a deal that took $1,500 to close might seem expensive. But if the contract is worth $10,000 a year—it'll only take two months to pay off the acquisition cost. The rest is money in the bag 💰
Why CAC is important: CAC helps you understand the return on investment (ROI) of your overall sales and marketing efforts.
How to track customer acquisition cost:
You can calculate CAC using a simple formula:
Cost of Sales + Marketing / # of New Customers Acquired = CAC
For example, if a startup spends $250k on marketing and $500k on sales in a quarter and brings in 1000 new customers, the cost to acquire each one is $750:
750,000 / 1000 = $750/CAC
Don't forget about "hidden" costs in your sales and marketing spending. Organic content might be free, but producing it wasn't. Sales rep salaries, advertising spend, and discounts on new contracts all need to be considered when calculating CAC.
8. Customer Lifetime Value (CLV)
CLTV (or CLV) is how much revenue a customer will add to your bottom line while they're with your company.
CLV is a useful metric on its own, but it's even more valuable if it's put up against others like CAC. If your CAC is $2,000, but CLV is only $3,000, it's taking your team a ton of effort to close deals, and your CAC is too high. You will either need to cut your CAC or focus on finding higher-paying (or longer-term) customers to make the strategy sustainable.
Why CLV is important: This metric gives you a solid idea of the long-term value of your customers.
How to track customer lifetime value: To calculate CLV, multiply the average deal size by the number of times a customer will buy a product or renew their contract in a specific timeframe. Then, multiply that by customer value to determine customer lifetime value.
For example, if your average deal size is $1,000 and, on average, customers stick around for five years, then your CLV is $5,000. Of course, not all CLV calculations will be this straightforward. Some customers will stay with you for a decade, and others will leave after a year, so it's important to get an idea of average retention and churn rates before you dive in.
9. Sales Pipeline Velocity
Sales pipeline velocity measures how quickly deals move through your sales pipeline each day and how much revenue is added to your bottom line.
It's a little different from the average sales cycle length because it points out how many healthy opportunities are in your pipeline at a time and what you should expect revenue numbers to look like at the end of the week (or month).
Why sales pipeline velocity is important: You can identify areas where deals are getting stuck and make changes to speed up the sales process.
How to track sales pipeline velocity: Again, you're going to need some data. Gather up the number of opportunities in your pipeline and multiply them by your average deal size and then divide it by your average sales cycle length in days.
For example, if you've got 50 deals in your pipeline (at an average of $5,000 each), and your average sales cycle is 86 days, you can calculate it like this:
50 x $5,000 ÷ 86 = $2,906
Your sales pipeline velocity is $2,906. You can then use this figure to see if your profit and overhead numbers are on the right track for growth. Nearly $3k in sales every day may look good on paper, but if you've got 10 sales reps on the phones to make it happen… there won't be much left in the bank once you pay them!
10. Pipeline Value
Pipeline value is the total value of all deals in your sales pipeline.
Yes, it's a broad metric, and a lot can change between a demo and a proposal being sent, but tracking it is a good way to get a "best case scenario" idea of what's coming down the pipeline and if you're on track to hit sales targets.
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Why pipeline value is an important metric to track: This metric is a North Star for expected revenue generation. Keeping track of it allows you to calculate whether you'll hit sales goals and create more realistic targets.
How to track pipeline value: Start with the number of deals in your pipeline. Then, multiply that by your average deal size. If there are 100 deals in your pipeline and your average deal size is $7,000, then your pipeline value is $700,000. Easy!
Again, the right sales tool makes this a hell of a lot easier to track. Close can calculate not just current pipeline value, but also annualized value, monthly value, or even value for each pipeline stage.
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Each time an opportunity moves through your Pipeline, Close automatically calculates each opportunity individually and gives a total expected revenue sum for each stage. The big advantage here is these views help you figure out where sales reps should spend their time. If there are a ton of deals stalled after demos, it's a sign your team needs to follow up with these leads to get them to the finish line.
11. Sales Rep Activity
Tracking sales rep activity can help you understand how much time reps spend on different tasks like prospecting, following up with leads, cold calling, and doing demos.
This data can then be compared to how many deals each sales rep closes to see if they need any additional training. Or, it may also suggest that automation can help out with activities like following up or booking demos to free up time in their calendar for prospecting.
Why sales rep activity is important: You don't need to look over your sales reps' shoulders. But you do need to have your finger on the pulse to see where they're spending their time and if they are hitting prospecting and calling targets.
How to track sales rep activity: Tracking how each rep performs within your sales pipeline tells you where each rep spends their time and if you need to make changes in your strategy.
Look, every sales rep is different. Some of them will be right at home picking up the phone and chatting directly to a prospect. Others will prefer to nurture them over email by building trust and sending out follow-ups and helpful information. There's no right or wrong way for reps to spend their time—as long as they have the revenue numbers to back it up.
What tracking this metric does show is how effective each activity is to your pipeline. For example, Close can track the number of calls and emails, opportunities created, and overall conversion rate for every sales rep in your team:
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If a certain rep is pushing a ton of opportunities down the pipeline and bringing in more revenue than others, tracking it all will show you what they're doing differently. You can then pull them aside and say... “Hey, what are you doing differently here? Have you created a new sales script, or have you changed up your approach to potential customers?”
You can then feed this back to the rest of the sales team to (hopefully) increase their positive contribution to the pipeline.
Oh, and tracking sales reps' activity is also the perfect opportunity to encourage some healthy competition within your team. Salespeople are competitive by nature, so don't be afraid to throw up a scoreboard every now and then to remind them who is bringing home the bag! 😉
12. Number of Deals in Your Pipeline
The number of deails in your pipeline measures the total sales opportunities you have in the pipeline at any given time.
Again, this metric is best used when combined with something like average deal size or average sales cycle length. If you have 80 deals in your pipeline at the start of February, it doesn't mean much. But if your target for Q1 is $100,000 and your average deal size is $2,000, you know your team needs to close at least 50 of these opportunities in the next two months to hit it 🎯
Why the number of deals in your pipeline is important: It gives you a clear idea of the potential revenue in your pipeline at any time.
How to track the number of deals in your pipeline: Do I sound like a broken record yet? This is so 👏much 👏easier 👏 with the right sales tool. Close's Opportunity Funnel Report can track every stage of your pipeline using three values:
- The Number of Opportunities in each stage
- The Annualized Value of your Opportunities
- The Opportunity Values Annualized, then multiplied by confidence in how many will be won
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See how easy that is? 🤓
If you’re not quite ready for a full CRM, you can try SalesTable—our spreadsheet CRM template. Get it for free here:
13. Marketing Qualified Leads (MQLs) to Sales Qualified Leads (SQLs) Conversion Rate
This metric tracks how many leads passed over to your sales team from marketing turn out to be…well, worth your time.
You might think most marketing-qualified leads (MQLs) that are passed onto your sales team are decent opportunities. But the average MQL to SQL conversion rate is pretty low. Most data on this is pretty old, but when Salesforce measured it a decade ago, the average MQL to SQL Conversion Rate was around 13 percent, and only half of those opportunities ended up turning into paying customers.
It's still important to measure this metric, though. You get a good idea of the quality of leads your sales team is receiving. But you can give the marketing department tips to help them more accurately target personas and get their messaging on point from conversations you have from converting customers.
It's a win-win. Marketing 🤝 sales = 💰
Why MQL to SQL conversion rates are important: This metric shows how many qualified leads are passed over from your marketing team and how many you can expect to convert.
How to track MQL to SQL conversion rates: This one can be a little difficult to track because you need to separate the leads passed over by the marketing team. Once you do, divide the total number of MQLs by the total number of them that ended up being SQLs. Then, multiply it by 100.
Here's an example:
Your marketing team qualified 560 new leads after your last feature launch. Once they landed in your team's sales funnel, 180 were cut because of bad product fit or because they didn't have the budget for it. The remaining 380 were followed up with and 260 responded to emails or calls. Now, just calculate it:
260 / 560 x 100 = 46 percent MQL to SQL Conversion Rate
14. Number of Qualified Leads
The number of qualified leads is a broader way to measure the quality of opportunities that land in your sales funnel.
This one isn't rocket science. The more qualified leads in your pipeline, the more opportunities you have to boost your close rate.
Why the number of qualified leads is important: Qualified leads are the bread and butter of any pipeline. It's important to track them to see if your sales targets are realistic and if you need to improve lead generation efforts to hit them.
How to track qualified leads: Add up the number of leads that meet your ideal customer profile in your pipeline, or the number of leads that make it to the “qualified” stage. This one is easy!
Hey there! Ready to revolutionize your B2B approach? Learn about the B2B Sales Funnel here.
15. LTV to CAC Ratio
The final pipeline metric on our list to track is the LTV to CAC ratio, which compares the lifetime value of a customer to the cost to acquire them.
Not only does your LTV to CAC ratio calculate the long-term profitability of your customers, but it's also helpful if you are trying to decide how much you can afford to invest in CAC.
Why LTV to CAC ratio is important: LTV to CAC Ratio is the hard truth about how much you can spend on marketing and sales activities. If your LTV to CAC is low, it's a warning sign you need to dial back your marketing spend or speed up your sales process to meet revenue goals.
How to track LTV to CAC ratio
First, calculate your CLV and CAC numbers. Once you've got these, divide them to get your LTV to CAC ratio. For example, if your CLV is $5,000 and your CAC sits at about $1,200, crunch the numbers:
5000 / 1200 = 4.16 LTV/CAC Ratio
It's easier just to round this up or down, so let's settle at 4:1. This basically means for every $1 you spend on customer acquisition—you get $4 back. Not bad!
Get Context on Your Pipeline Metrics: How to Use the AQC Framework to Check Yourself
Sales metrics are absolutely key. But they can be misleading, so I always encourage sales leaders to inject a bit of skepticism into their spreadsheets.
This doesn't mean tracking key metrics is a waste of time. It's the opposite. But the most valuable insight will come from understanding three sales metrics:
- Activity
- Quality
- Conversions
This is called the AQC framework.
Let's say your conversions doubled in two months. It looks great on paper, but you should break it down using the AQC framework for more context:
- Activity. In January, the team made 2,000 sales calls. By the end of March, it increased to 5,000.
- Conversions. In January, the team converted 500 (25 percent) prospects to customers. In March, they converted 1,000 (20 percent).
Using those two facts, we can see that the quality of the prospects (or the sales calls) has decreased. While the number of conversions doubled, the conversion rate actually went down.
It's a hard truth to swallow, and without the AQC framework, something you might not have figured out. And that's why this formula helps you cut the bullshit out of metrics that look really good on paper and get to the truth.
When you see that you’ve made a big improvement in a KPI, you might get excited and decide that your campaign has been a success. But you need more context. Maybe you significantly shortened your sales cycle. That’s a victory, right?
In most cases, yes. But if you had to decrease the quality of your pitches or reduce your conversion rate, you’re making a tradeoff that might not be worth it.
Think Carefully about Metrics and Level up Your Sales Process
Tracking pipeline metrics is the only way to really understand what's going on in your sales funnel.
But it can be pretty daunting to know which pipeline metrics to track. The truth is some metrics are pure vanity and won't help you make decisions to improve sales strategies. But others, like qualified leads, CAC, and sales rep activity, can pinpoint problems in your pipeline or highlight that you're spending too much to get leads into your funnel in the first place.
The most important thing to remember about pipeline metrics is to take them with a (big) grain of salt. Keep an eye out for metrics that could be misleading, and take a better look if something seems too good to be true.
Remember, the ultimate goal of tracking sales pipeline metrics is to improve your sales funnel's efficiency. Get tracking, tweak your strategy when needed—and do everything you can to improve that bottom line.💰
Learn how the return on sales ratio can provide valuable insights into your company's profitability by exploring my article.
