How To Analyze Your Sales Pipeline and Track Sales Effectively

It is necessary for every business to develop a sales pipeline because the contribution of an efficient sales pipeline towards the revenue is undeniable. Developing a good sales pipeline holds importance, but managing the performance of that sales pipeline is a whole new challenge. The performance management of a sales pipeline gives insights of its productivity, and it also tells whether the sales pipeline is feasible for a given business or not.

There are different steps of a sales pipeline. Whether it is an initial step of prospecting or the finalization of a deal in the closure, you can track sales with a critical point of view and suggest the changes that can result in a noticeable improvement in the sales pipeline process. While we have discussed the importance of performance management so far, the question that arises is that how the performance of a sales process can be analyzed?

Let’s look into a few key performance indicators of a sales pipeline and see how different factors affect a sales process;

Average Transaction Value

One of the important key performance indicators by which you can track sales is the observation of the average transaction value. The average dollar that a customer spends on your product/service in one transaction makes up an average transaction value. The average transaction value can be calculated by dividing the value of each transaction to the overall number of transactions that a business has processed in a given time frame.

If the average transaction value of business is gradually increasing, it suggests that the sales pipeline is performing fairly well. On the other hand, if it is not fluctuating much or decreasing, then a business must focus on the strategies that will help it in increasing its ATV.

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The effectiveness of a sales process can also be assessed by finding out the precise number of opportunities that a business successfully availed out of all the opportunities that have been available all the way. Win rate can be calculated by dividing the number of opportunities won to the total number of opportunities that were available in the first place.

A high win-rate suggests that your sales process is efficient enough to drive the sales by constantly converting the prospects into paying customers. Contrarily, low win rates reflect there are loopholes in the sales process that must be removed to achieve the desired goals.

Sales Cycle

Analyzing sales through sales cycle can be a bit difficult to find out since it is not always possible to know exactly when the opportunity has been created, but this issue can be resolved by closely observing the process in addition to the creation of monthly segments to get a clear idea on this.

The timeline and duration of the sales process are quite impactful. The time that sales process takes to approach a prospect and convince him to pay for your product determines the efficiency of a sales process.

If a sales process is efficient enough, then it will not take up much time to find out the potential customers and to turn them into paying ones. The sense of sorting out just the right prospects helps to know whether it will be beneficial to invest your time upon them or not.

Related: Insights You Gain by Integrating Social Media Management with Your CRM

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Weighted Pipeline

The value of opportunities that are present in a pipeline at a given time makes up the weighted pipeline. It can be calculated by multiplying monthly win-rate with sales cycles in that month. A weighted pipeline takes into account some key determinants of a successful sales process such as percentages of prospecting, closing deals, etc.

Devising a weighted pipeline can prove to be a good performance indicator not just for the current sales scenario of that business, but also for assessing productivity of a sales process in the future.

To sum it up, all these key performance indicators need to be evaluated to determine the health of a sales process. Another more sophisticated way of analyzing these KPIs turns out to be the integration of CRM that facilitates the performance management of a sales process. The performance management tools can help greatly in this regard.

Article Summary

There are certain key performance indicators as far as the effectiveness of a sales process is concerned. The tools for business growth, such as the incorporation of a good CRM or Sales Stack platform in your business set-up can help you assess the situation in a productive manner.


Abe Dearmer

Abe has a vast experience running multiple SaaS companies and is an expert on all things Sales, Marketing and SEO.

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