By tracking the right sales pipeline metrics, you can effectively generate higher quality leads and increase revenue growth by converting more opportunities into valuable deals.
Sales pipeline metrics determine how well your business is achieving its financial goals and long-term objectives.
There’s a plethora of metrics to use when reviewing the performance of your pipeline and revenue activity. Though, by tracking the sales pipeline metrics that matter most, you can get answers to the most frequently asked questions, such as:
Which sales activities drive the most valuable outcomes? How can I manage the pipeline stages better? Are the sales team making the most of existing leads and opportunities?
On top of everything else, sales pipeline metrics help connect your marketing efforts with downstream activities, allowing you to demonstrate your impact on qualified leads and revenue more effectively.
With so many sales pipeline metrics to choose from, how do you determine the right ones for your business?
Fortunately, we reached out to 40+ experts and asked them which pipeline metrics they consider the most important when measuring marketing and sales efficiency and have shortlisted their suggestions below.
So, for this article, we’ll discuss.
💡 Pro Tip
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In the most basic form, a metric is a quantifiable measure used to track your progress and evaluate success. Sales pipeline metrics, in particular, are used to measure the steps of a potential sale from the initial contact to close.
With the right sales pipeline metrics, your teams can pinpoint what is and isn’t working to drive sales and revenue for your company.
The purpose of your sales pipeline is to give you visibility into the customer journey and observe how leads move from one stage to the next.
“By understanding your customer’s most recent spending patterns, you can utilise that data to construct more targeted marketing and sales strategies, ensuring that you are meeting your customer’s needs,” says Jordan Dwayne, CEO and Founder at 6 Ice.
Sales pipeline stages tend to differ across industries. Low-value items have relatively short sales cycles, unlike consultative, high-ticket services that require more effort and time to convert opportunities into a deal.
Related: What is a sales cycle and how to close deals faster
All things considered, each sales pipeline should at least follow the basic steps, where the buyer advances from awareness to consideration to decision which should resemble something like this:
Attract the interest of your target audience through the use of social media, paid search and other promotional activities.
Offer your audience relevant content such as eBooks, white papers or webinars to move leads down the funnel, then assess whether they’re interested in learning more about your products and services.
“Lead generation begins at the top of the funnel and works its way down to support the sales department. You have to determine what is considered “converted” in your company’s eyes. It’s essential to track conversion rates from both sales qualified leads (SQLs) and marketing qualified leads (MQLs),” says Maulik Patel, Founder and CEO at ClickMatix.
By now, your leads are ready to move onto the next stage. Present leads with your product or service by scheduling a demo or meeting. You’ll need to evaluate whether they’re ready to convert into an opportunity or receive a proposal.
Amir Yazdan, M.D, Founder at GroMD, told us, “if leads aren’t producing real revenue, then their worth exponentially decreases.”
“Understanding your conversions will help you to see how you may need to offer additional training to your salesforce, or perhaps come up with different strategies that can help move a lead down your sales pipeline in a much quicker way.”
Handle any negotiations, nurture your prospect into buying your products or services and close your opportunities into revenue.
“By comparing the number of closed opportunities and closed-won opportunities to all in a similar period, we get a high-level view of the sales team’s overall achievement. Sales managers in our company can identify strengths and weaknesses among their individual sales reps and take corrective action,” says Peter Schoemann, Owner at The Dog Adventure.
Upsell or form partnerships to expand services and revenue.
“Companies shouldn’t just be content with acquiring customers. They need to make sure that they nurture this business-customer relationship for the future as well,” says Simon Elkjær, Chief Marketing Officer at avXperten.
Before we jump into our list, there are a few things that you need to consider first when it comes to choosing the right pipeline metrics for your business, such as:
Less is more when it comes to sales pipeline metrics.
For Peter Home, Content Lead at Geoff McDonald and Associates, “the metrics that we track give us a good indication of how our marketing tactics are performing and what to expect for future efforts. The insight that we get from these metrics allows us to determine if we need to make changes or not on the go, as well as customise the entire process to our specific audience.”
If you try to track too many KPIs all at once, you can end up counteracting your performance efforts. Therefore, you should avoid tracking more than ten KPIs at a time.
Whether you are an established business with countless clients or a new start-up trying to attract consumer interest, it is essential that you make allowances for the size of your business when deciding what metrics to track.
“The choice of pipeline metrics very much depends on the size and function of the company, and business owners should always conduct proper research to find the right one for them,” says Jack Zmudzinski, Senior Associate at Future Processing.
Whereas a product fit Saas company will want to measure the number of sign-ups or retention of users, a professional law firm is bound to be more interested in monthly recurring revenue and referrals.
Don’t forget that your metrics need to be relevant to your business and its own unique goals. Think carefully about what metrics are most important for sustainable success and choose accordingly.
“Always remember that every business needs to study their process and determine which metrics are most significant for them. No one can tell you which metrics mean most to your business,” says SEO consultant and Founder Daniel Foley.
By tracking the sales pipeline metrics that deliver the most value, you can prove that marketing is generating qualified leads and establish yourself as a valued member of the team.
Below are 22 sales pipeline metrics recommended by our respondents and how they play a significant role within sales and marketing teams.
Average sale allows you to keep on track of your revenue income and provides key insight to increase the value of your deals.
“Identifying the average sale is vital for knowing if your services are priced competitively,” says Grant Aldrich, Founder and CEO at Online Degree.
Grant added: “It can also help a company see if they should be targeting a different type of customer who will pay more for the services.”
Avinash Chandra, Founder and CEO at BrandLoom, told us that tracking average sales cycle is important as it “helps comprehend why certain products or services have more conversion rates and can invest your efforts in the right direction.”
Average sales cycle offers insight into how quickly sales reps move leads through the pipeline and convert prospects into revenue for your company.
Sales cycles vary across industries. For smaller deals, the average sales cycle can last anywhere up to 3-month, whereas higher-value prospects tend to require more decision making time and can take significantly longer to close a deal.
In fact, during a study, 52% of companies reported that they endure sales cycles lasting between one to three months, while 19% have sales cycles greater than four months.
“When we see that our sales cycle is taking longer than usual, that means that there are a few important facets that we need to inspect and some questions that should be answered,” says Timmy Yanchun, Co-Founder at LTHR Shaving.
Timmy explains: “By revealing this telltale data and more, it can help us to see if we are lacking in productivity, or if our marketers or sales force need additional training or tools that can help them work more efficiently.”
Cart abandonment rate helps retailers evaluate the behaviour of website visitors and online shoppers.
A high cart abandonment rate typically indicates a bad user experience. Aiming for a lower cart abandonment rate can significantly impact sales and revenue.
Ryan Jones, Digital Marketer at Land of Rugs Online LTD, told us that they track a number of key metrics including, “total number of daily sales, conversion rate, number of abandoned carts as well as traditional vanity metrics like traffic.”
“Every abandoned cart is a missed opportunity. So if we can look at where we went wrong, and what we can do to fix it, this is imperative to improve our bottom line.”
Cart-to-detail rate provides insight on users that have added an item to the cart after viewing the product page.
“This is a metric that is often overlooked when measuring individual performance,” says Dean DeCarlo, CEO and President at Mission Disrupt.
“If the cart-to-detail rate is lower than average, immediately consider what may be causing it. Example issues include a sub-par product title, a bug, or product benefits that could be missing from the description. Focus on the actual products instead of the average to find the attributes contributing to the higher.”
Anybody who knows anything about business and sales will tell you it’s easier to sell to an existing client than it is to acquire a new one.
“Some businesses believe that the pipeline is done once an opportunity converts into a client, but that’s the wrong way to look at it. An effective sales strategy should produce loyal clients with higher lifetime value. They continue to spend money and give your business a reliable revenue stream,” explains Todd Ramlin, Manager at Cable Compare.
Maintaining and building relationships with customers can help you anticipate buyer needs to deliver and execute on future expectations.
For Szymon Gołyski, CMO at Channels, they measure call effectiveness, as they “have a team that’s doing welcome calls to our customers.”
“This gives us a great insight into what can be improved in terms of our onboarding process, but also what features we should add next in our app as they help us to gather feedback and see which features are the most often used,” says Szymon Golyski.
Closed rate is when a lead or prospect converts into a paying customer and allows sales, marketing and customer success to optimise the funnel for better performance.
Both John Li, Co-Founder and CTO at Fig Loans, and Dimitris Tsapis, Sales at Retail CRM Cloud, closely track closed metrics to understand how much revenue and profit has been generated from their efforts.
“Closing rate is the sales pipeline metric that we focus on and track regularly because we understand that without any sales in any organisation, then a business won’t thrive,” says John.
“A low closing rate would mean extra efforts required on the sales end of our processes and an increase in our marketing campaigns. A high close rate with a low total rate would mean an adjustment with our marketing. Regardless, as long as you consistently track your close rate progress, minor adjustments can be made to drive up your overall business targets.”
Dimitris Tsapis closely tracks closed opportunities, because besides base rate, their quota is based on achieved revenue targets.
“Tracking closed opportunities is key, as it’s important both for sales team leads, sales managers and also for me to keep track of the commission targets,” explains Dimitris.
“I strongly believe that the conversion rate is a key metric to analyze the effectiveness of your sales pipeline,” says Dusan Stanar, Founder & CEO at VSS Monitoring.
Related: Lead conversion metrics you need to track
Alex Kehoe, Co-Founder and Operations Director at Caveni SEO Solutions, told us that they also track “tertiary metrics that lead up to conversion rate.”
“We will track both the number of users, the bounce rate, and by assigning a value to our conversions, we can see which pages drive the most sales by comparing their value. By using all of this information in tandem, we can create a fairly accurate overview of our user’s behavior as they navigate our website.”
We recently ran a study into conversion rate, and below is a graph that illustrates the average conversion rate across fourteen different industries.
As you can see, performance varies across all industries.
What is certain is that industries that sell higher-value products and services have a lower average conversion rate, unlike businesses that require less investment and commitment from customers.
Something to keep in mind when analysing the performance of your marketing and sales funnel.
💡 Pro Tip
Don’t forget to download the conversion benchmark report to see how your form and call rates also measure up against the competition.
Ila Chaubey, Analyst at Novel Growth Partners, tracks “conversion rates through each stage, as well as the difference in conversion rates between different marketing channels.”
Breaking down conversion rates by stage is useful as you can pinpoint bottlenecks and wastefulness at various points within your sales process and take action to increase pipeline efficiency and revenue activity.
Customer acquisition cost is the average amount of money that a business spends to acquire new customers.
When tracked correctly, marketers can gain insight into the acquisition channels that generate the most value and allocate budgets accordingly to drive more profitable results.
“To gain more specialised data from our sales pipeline metrics, we always track customer acquisition cost. If we see that our customer acquisition cost is abnormally high, then we must investigate why,” says Travis Killian, Owner and CEO at Everlasting Comfort.
Related: 5 easy ways to reduce your customer acquisition costs
Travis Killian will evaluate the points below get to the bottom of any cost inefficiencies:
“Everything plays a part, and tracking our customer acquisition can help paint a much broader picture,” explains Travis.
“One metric I carefully observe is customer lifetime value,” says Antti Alatalo, Founder at Smart Watches 4 U.
Customer lifetime value indicates the total revenue a business can expect from a single customer and is a key metric for SaaS companies and service-based businesses that provide a monthly retainer.
With customer lifetime value, you can effectively decide how much you need to spend to acquire new customers. If your customer acquisition cost is higher than your customer value, there’s a strong possibility that you’re losing money.
“I really strive to increase CLV by constantly updating the site with high-quality and unbiased reviews. The key is to provide value by making your site a one-stop solution. I try to make my reviews so in-depth and comprehensive, covering every nook and cranny that my readers feel they don’t need to look elsewhere for additional research,” says Antti.
Measuring deal profitability allows companies to maximise sales efficiency and opportunities, allowing them to remain successful and stay ahead in a dynamic and competitive market.
“The sales pipeline metric that we track is deal profitability,” says Adam Jansen from Cheap SSL Security
Andrew added: “After all, it’s crucial to understand how much of the gross revenue from a contract really ends up in the company bank account. To measure deal profitability, determine how much you will be spending to land the deal. This refers only to deal-specific costs, such as hourly staff costs, client entertainment or travel, documentation. Deduct the total expenses acquired from the value of the deal. This figure tells you the profitability of a deal.”
In its most basic form, the lead source is the channel through which a user interacts with before converting. It’s essentially the first touchpoint in your conversion funnel.
Related: What is lead source and tips on how to track it
Tracking lead source data is crucial as it shows you which marketing channels are driving the most value for your business.
Jimmy McMillan, Owner of Heart Life, told us they “have many different lead sources”.
“My company had an effectively free lead source. However, it took a long time to qualify prospects, and they rarely turned into sales. We quickly invested our time into paid marketing that quickly turned prospects into customers, thus led to a lower CPA and better bottom line.”
💡 Pro Tip
To effectively track lead source and gain complete visibility of your sales cycle, you need a solution that can capture all the interactions throughout an individual customer journey and integrate data between your CRM and marketing tools.
With Ruler, marketers can match data captured from lead generation activity such as web forms, phone calls and live chat with sales data to gain end-to-end visibility of the buyer’s journey.
How to send lead source data to your CRM with Ruler
Put simply, a lead is any person who shows interest in a company’s product or service.
“We track the number of leads and numbers of offers sent out each week. To some degree, our business is a numbers game. As long as we actively listen to each client and provide them multiple offers or solutions to their problems, we know that we will get a deal,” says Luke Smith, Founder of We Buy Property in Kentucky.
Luke added, “we can’t do business with a lead if we don’t provide them with an offer. We can certainly adjust that offer if we find out different information from them, but an offer is the only way we can close and procure revenue.”
Lead velocity rate tracks and measures your growth in qualified leads month-over-month and can help predict future revenue activity.
“One of the most important metrics I use while tracking the sales pipeline is lead velocity rate (LVR), which provides me with extra insight into where my sales are going,” says Chris Nutbeen, Founder and Owner at Nuttifox.
For Chris Nutbeen, he believes that lead velocity rate is a better indicator than MRR, “as it predicts based on today’s data, whereas MRR measures what happened in the past.”
Chris used an example to demonstrate why:
If your MRR is X and increases when someone purchases, it’s because they signed up for the trial a month or a year ago.
The formula for LVR is: LVR = ((Qualified leads this month – Qualified leads last month) / Qualified leads last month)) x 100.
If your inside sales are working well already on a normal level, then you should strive for growing LVR e.g. 20%.
“There is a lot to learn from why an opportunity was lost that can help us improve our sales process and marketing efforts,” says Rachel Knutson Kobold, Marketing Analyst at Beyond Warehousing Reasons.
When you understand why deals are lost, you can take action to enhance your internal processes, products, services and overall performance.
“Whenever we see a loss in sales, that’s a metric that is worth exploring so that we can understand why this has occurred, and make a pivot in regards to our marketing campaigns, says Jared Zabaldo, Founder at USAMM.
“As we look more closely at lost sales, we can determine certain factors. Was the product merely viewed, or was it actually placed in the online shopping cart? If the product was considered for purchase to such an extent that it was sent to the cart, then the sale may not actually be lost. This is when shopping cart reminders and other email marketing strategies come in, and having detailed data to use in creating these campaigns can be instrumental,” added Jared.
MQL to SQL conversion rate is the percentage of marketing leads that move down the funnel and convert into sales-ready leads. It’s one of the best ways to measure lead quality and track which marketing sources have the greatest impact on pipeline activity.
Both Bishal Biswas, Marketing Consultant at Word Finder, and Julien Raby, Founder and Owner at Coffee Works, use MQL to SQL conversion rate to track how efficiently sales teams qualify leads and move them through the sales process.
“Marketing qualified leads to sales qualified leads is an essential metric to track. It shows how well your sales and marketing teams are coordinating,” says Bishal Biswas.
Julien added, “if the ratio of leads to sales qualified leads is low, it may mean that you’re not bringing in quality leads, that is, people likely to make a purchase.”
Both Courtney Quigley, Business Reputation Consultant at Rize Reviews, and Martynas Kavaliauskas, Co-founder and CEO at TrackingFox, said that among other metrics, look at win rate as one of their core measurements of success.
“Using win rate metrics makes it easy for you to compare the opportunities won to all closed deals in the same period. You can scale your sales team effectively and get a high-level insight into overall performance,” says Courtney Quigley.
Martynas added, “by watching this metric, I can figure out if I need to improve my sales processes or invest more in training for my salespeople. Not only that, but it can also tell me if I need to focus more on my marketing.”
At the most basic level, your win rate is the percentage of deals you close. If you open 1,000 opportunities and from that 400 are closed lost, and 600 are closed won, then you’ll end up with a win rate of 60%.
With that in mind, Reda Elmardi, CEO at Strong Chap, explained that “your success rate for closing deals will depend on your niche, your target market, the products you sell, and the area you serve.
“Knowing your opportunity win rate and correlating it against your competition will help you recognise areas for process improvement.”
Projected sales value assists in overall sales and marketing planning, budgeting, and risk management.
“Our projected sales value gives the value of the deals in our pipeline. This gives us a clear indication of the health of our business. If this figure is above our baseline, we know that we can sleep easy, says Gilad Rom, Founder at Huan.
“Our sales success comes down to the number of quality leads that come into the funnel. We obviously measure conversions and sales that are won, but we also mainly look at the number of inbound leads that come into our sales funnel as a priority,” says Josh Wood, Founder and CEO of Bloc.
Simply put, a qualified lead is someone considered sales-ready based on intelligence but not yet ready for direct contact.
For Blake Bobit, Founder at Solution Scout, “qualified leads metric is one of the most important ones that we track.”
“Leads tell us where and how the current strategy works and what needs to be improved,” Blake added.
The goal of measuring ROAS is to determine if the cost of advertising yields an acceptable amount of incoming business revenue.
Related: Why tracking ROAS important and how to track it
“Return on ad spend is important as it determines which ad units and audiences we spend more on and where we spend less,” says Ray Blakney, CEO and Co-Founder of Live Lingua.
Shawn Breyer, Owner of The Hive Law, told us, “when doing Google Ads marketing, we track our leading indicators so that our business can adapt in real-time.
“We know that it takes 13 leads to get a divorce client that we average $13,000 profit on, and we also know that it takes 59 clicks on our ads to get that amount of leads. If we don’t get the number of leads we need that week, then we know we need to make more clicks on our ads next week to adjust. Tracking leading indicators allow you to adjust your efforts in real-time.”
💡 Pro Tip
Are you using paid advertising to drive leads and sales? With a tool like a Ruler, you can connect the dots between your site, leads and revenue, allowing you to calculate your ROAS more effectively.
How to improve your ROAS with Ruler
Sales velocity measures how quickly your business is making money.
The idea is relatively simple, the shorter time it takes for targeted prospects to move through your sales pipeline, the quicker you can close more sales deals.
“I’d say this metric plays a massive role, as it shows you how your business can thrive and grow,” says Timothy Clarke, Director of Sales at SEOblog.com.
Timothy added: “Sales velocity determines how much revenue you can expect to make in one day or over a certain period. So, higher sales velocity results mean you’re generating more profit in less time. The faster you make a new sale, the better it is for you as a business. This is precisely the magic you need to step up in the game. High-Velocity Sales are the future of sales, so don’t be left behind.”
“Understanding the number of deals in each stage of the pipeline will explain how your prospects are working their way through your sales pipeline and where the pipeline is getting jammed, says Colin Matthews, CEO and Founder of Cookwared.
“This metric will provide an insight into developing various sales techniques to accelerate prospects from one stage to the next and get those contracts into their hands!”
You can feel positive about a deal, but that doesn’t mean that it’ll close into revenue. With the right sales pipeline metrics, you can prove the effectiveness of your marketing and establish yourself as a valued member of the team.
“Each metric is connected, but it’s necessary to understand the full picture of how the sales pipeline is doing,” says Brittany Davis, Head of Data at Narrator.ai.
Using a tool like Ruler, you can combine marketing with pipeline activity to track every touchpoint that a user engages with across multiple channels and campaigns before converting into a sale—and beyond.
Want to more on Ruler? Read our blog on how to view the full customer journey with Ruler and learn how to better track your sales pipeline. Or, book a demo of Ruler and see it in action for yourself.
This blog was originally published in February 2021 and last updated on 25th April 2022 for freshness.