Consider a sales team that has the following active opportunities in their pipeline:
Opportunity A: Estimated value $50,000, 60% probability of closing
Opportunity B: Estimated value $80,000, 50% probability of closing
Opportunity C: Estimated value $30,000, 70% probability of closing
The Pipeline Value can be calculated by summing up the estimated values of these opportunities:
Pipeline Value=$50,000+$80,000+$30,000=$160,000
To calculate the weighted Pipeline Value, you also need to account for the probability of closing each opportunity:
Weighted Pipeline Value = ($50,000×0.60)+($80,000×0.50)+($30,000×0.70)=$91,000
This example illustrates that the total potential revenue from the active opportunities in the pipeline is $160,000. Tracking this metric helps the sales team understand the potential revenue they could generate if they successfully close all the deals in their pipeline.
