Sales pipeline analysis for B2B sales teams

To meet their goals, B2B sales teams need to regularly analyze their sales pipeline to assess where deals stand and identify potential bottlenecks, ensuring they stay well-positioned to drive more revenue and close deals efficiently. 

By analyzing your sales pipeline on a regular basis, sales teams can overcome the challenges of long sales cycles and complex buyer journeys by figuring out which stages require more focus and resources and adjust their approaches accordingly.

By mastering sales pipeline analysis, teams can achieve better business outcomes thanks to more precise forecasting, improved data-driven sales strategies, and higher conversion rates.

What is a sales pipeline analysis?

A sales pipeline is a visual representation of the stages a potential customer moves through from initial contact to the time they sign a contract. 

At a high level, the sales pipeline helps sales teams track the progress of prospects, manage opportunities effectively, and forecast future revenue by organizing leads and opportunities into different stages — like prospecting, qualification, proposal, and closing. Simply put, the sales pipeline is a crucial tool that helps teams understand the health of their sales processes and identify areas for improvement.

A sales pipeline analysis is the process of examining the different stages within a sales pipeline to understand how leads are progressing and where potential bottlenecks or inefficiencies might exist. 

By analyzing the pipeline, sales teams can gain insights into the conversion rates at each stage, identify which opportunities are most likely to close, and forecast future revenue more accurately. As a result, they’re able to take a data-driven approach to optimizing sales strategies, improving team performance, and ultimately driving better business outcomes by ensuring that resources are focused on the most promising leads and opportunities.

Sales pipeline vs. sales funnel

While the terms sales pipeline and sales funnel may seem like similar concepts, there are some key nuances between the two:

• A sales pipeline is a visual depiction of the stages a prospect goes through in the sales process. It focuses on the steps that sales teams need to take to move prospects through the pipeline — like lead qualification, making presentations, and negotiating terms. The pipeline is more about managing and tracking individual deals at each stage of the sales cycle.

• A sales funnel, on the other hand, represents the broader journey prospects take from being potential leads to becoming paying customers. It emphasizes the quantity of prospects at each stage and how there are fewer of them as they move closer to a purchase decision. The funnel shape illustrates the idea that while many prospects enter the top of the funnel, only a smaller number make it through to the bottom and convert into paying customers. 

Sales pipeline analysis vs. sales forecast reviews

In addition to understanding the difference between the sales pipeline and sales funnel, teams looking to optimize their processes and predict future revenue accurately also need to learn about the nuances of sales pipeline analysis and sales forecast reviews:

• Sales pipeline analysis involves evaluating the stages within the sales pipeline to monitor deal progression, identify bottlenecks, and refine the sales process for better conversion rates. This analysis should be done regularly — especially when there are shifts in the strategy, team structure, or market conditions — to ensure efficiency in the sales process. 

• Sales forecast reviews focus on predicting future revenue based on current pipeline data, market trends, and historical performance. These reviews, typically conducted on a monthly or quarterly basis, are essential for setting realistic revenue targets, budgeting, and making informed business decisions. 

While pipeline analysis is all about optimizing daily sales operations, forecast reviews guide broader business planning, ensuring alignment with long-term goals. 

Why analyzing your sales pipeline matters

Sales teams that consistently analyze their pipeline can spot issues faster, figure out which levers to focus on optimizing within the sales process, and get a clearer understanding of what the team needs to do to hit their goals. By regularly reviewing your pipeline, you can assess the quality of leads, forecast future revenue more accurately, and make informed decisions about where to allocate resources.

A sales pipeline analysis can help answer the following questions:

• What activities are driving prospects forward in the sales process?
• At which stages are prospects getting stuck or dropping out of the funnel?
• What risks is the company facing and how can they be mitigated?
• Where does your team need help within the sales process?
• What do the largest deals have in common?
• What do the fastest deals have in common?
• What is the projected revenue from the existing pipeline within a specific timeframe?

Before you start your sales pipeline analysis, understanding what you’re trying to accomplish in the process is important. You may want to answer all of these questions — assuming you have the data to be able to — or you may want to hone in on answering a specific question or two in an attempt to figure out which activities are driving the most value and what the best deals have in common with each other. The only way to eat an elephant is one bite at a time!

Sales pipeline analysis metrics

If your goal is better understanding and optimizing your sales process, you need to measure a number of sales metrics regardless of how big your company is or how mature your sales processes are.

While each organization may be at a different point in their unique sales journey, starting to track these metrics early on can set the stage for long-term sales success.

Rather than being overwhelmed and trying to track every metric on an extremely granular level, you’re best off focusing on high-level insights. Once you understand the metrics that have the biggest impact on sales success, you’ll have a better idea about what levers you can pull to meet your sales goals — helping to ensure your team is always on track to crush its targets. 

With that in mind, let’s examine some of the key sales pipeline metrics you should begin tracking, presented in order of importance and ease of tracking if you have basic sales processes and systems in place. But before we do that, always remember that the most important part of the sales pipeline analysis process is being able to take action based on the insights you discover. Simply tracking metrics doesn’t matter if you can’t use your findings to improve your processes. 

Win rate

Win rate measures the percentage of deals closed successfully compared to the total number of deals pursued. Tracking the win rate is crucial to sales success since it provides insights into the effectiveness of your sales strategy and the performance of your sales team. 

To determine your win rate, divide the total number of closed deals by the number of total deals and multiply by 100.

Average sales cycle length

Average sales cycle length measures how long it takes to close a deal from initial contact to a signed contract. This metric is important because it helps assess the efficiency of your sales process and identify any potential bottlenecks holding you back.

Track this metric by calculating the time between the first interaction and closing date for each deal and then averaging them. 

Average deal size

Average deal size refers to the average revenue generated from each closed deal. It’s important because it helps sales teams forecast revenue more accurately and assess the effectiveness of pricing strategies.

Measure average deal size by dividing the total revenue from closed deals by the number of deals closed in a given period. 

Number of opportunities

The number of opportunities indicates how many potential deals are currently in the sales pipeline. Tracking this metric helps you understand pipeline health and plan how to best allocate resources.

To track this metric, count the total number of opportunities or leads that are actively being pursued at any given time.

Qualified leads

Qualified leads are prospects who have been vetted and deemed likely to become paying customers based on certain criteria. Tracking qualified leads is essential for focusing sales efforts on high-potential prospects and improving conversion rates.

Measure this metric by assessing and counting leads that meet the qualification criteria set by your sales team.

Sales pipeline velocity

Sales pipeline velocity tracks the speed deals move through the pipeline, which indicates how quickly sales opportunities convert to revenue. It’s important to track this metric to improve forecasting and optimize sales processes. 

Calculate sales pipeline velocity by dividing the total revenue in the pipeline by the average number of days deals spend in the pipeline. 

Deal stage conversion rates

Deal stage conversion rates track the percentage of deals that move from one stage of the sales funnel to the next. This metric helps identify where deals are getting stuck and the effectiveness of each stage in advancing deals.

To measure this metric, divide the number of deals that advance from one stage to the next by the total number of deals at the current stage and multiply by 100. 

Sales activity metrics

Sales activity metrics track the volume and type of activities (e.g., cold calls, meetings scheduled, and emails sent) performed by each member of the sales team. These metrics are important for understanding sales productivity and effort. 

Measure this by tracking and recording individual sales activities using CRMs, prospecting tools, and sales engagement platforms.

You should ideally be measuring each of these metrics across the entire sales team and per individual sales reps that are responsible for closing deals. This can help you not only analyze the sales pipeline across the entire organization but hone in reps who may need a bit more help.

Pro tip: Before you do an analysis, it’s important to ensure that your sales team has updated the CRM and filled in information about all the deals they’re working on. 

How to perform a sales pipeline analysis

Now that you have a better idea about why sales pipeline analysis is important and the metrics you need to track, let’s turn our attention to the specific steps you can take to analyze your sales pipeline. 

1. Establish goals for sales pipeline analysis

Kick off the analysis process by establishing clear goals you hope to accomplish. To do this, determine what specific problems you hope to address and what questions you want to answer. Are you more interested in optimizing stages or understanding revenue drivers? 

Goals will vary significantly based on your organization’s size. For example, an enterprise might be most interested in refining existing processes for better efficiency while a startup might concentrate on identifying key revenue-generating factors. 

Whatever you decide, making sure your analysis aligns with your goals ensures that the insights you ultimately uncover are practical and helpful.

2. Gather data (quantitative and qualitative) 

In addition to analyzing the key metrics we discussed above, you also need to gather qualitative data through conversations with both sales and marketing. These teams can provide valuable insights and help you identify trends that might not be immediately evident in the quantitative data. By combining both types of data, you can achieve a more comprehensive and accurate understanding of your sales pipeline. 

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3. Analyze the data

Depending on the size of your company and available resources, “analyzing the data” may mean very different things. While larger companies with data scientists can take a deep dive into quantitative analysis, smaller companies may benefit from having a senior sales leader reviewing the data to identify trends. 

No matter which approach makes more sense for your organization, it’s important to not get lost in the weeds of overly technical analysis. Instead, focus on extracting actionable insights that align with your initial goals and answer the key questions you’ve set out to address.

For example, look at the deals that closed the fastest with the largest ACVs to determine what made them fly through the sales process with ease so you can find more prospects like them and create a repeatable sales play.

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4. Report on insights and actions to take

Once you’ve analyzed the data and extracted the insights, share them with your entire team. To give you a better idea of what this looks like, here are some examples of insights you might find during this process:

• If a deal is in the pipeline for more than 45 days, the likelihood of closing it drops to 5%.
• The fastest deals tend to be from financial services companies who have between 150 and 200 employees and already have an existing solution in place.
• The largest deals are generated through webinars and the second largest come from LinkedIn advertising.
• Prospects who receive a certain piece of sales collateral are 3x more likely to close than those who do not.
• Cold calling only makes up 5% of our close deals while cold emailing makes up 20%.

As you can see, all of these insights are actionable; teams can take the information and start pulling different levers — like focusing on a certain type of prospect, utilizing a certain sales technique over another, or foregoing efforts that are not paying off.

Once you’ve shared the insights and actions you want the team to take, it’s important to continue tracking these metrics to see if the changes you’ve implemented are having the intended impact. For this reason, we recommend having at least a biannual sales pipeline analysis review. Even better, teams that do this once a quarter can improve faster since they’re able to see whether the actions they’re taking are making a difference sooner.

If you’re feeling extra adventurous, don’t be afraid to do a lightweight sales pipeline analysis every month. The sooner you identify issues in your processes, the faster you can correct them and sell more.

How LeadIQ helps teams increase prospecting, sales velocity & win rates

Once you’ve done your sales pipeline analysis, you’re likely wondering what you can do to actually move the needle on the metrics.

Whether you’re looking to increase your top of funnel or are focused on closing your existing qualified pipeline, LeadIQ can give each of your reps the jolt they need to get over the finish line.

With LeadIQ, your reps can:

• Find, capture, and sync contact data to your CRM and other sales tools in one click
• Ensure prospecting data stays accurate over time with automatic enrichment
• Track job changes to know when champions, buyers, and decision-makers change jobs
• Use artificial intelligence to generate personalized messages for any prospect in seconds
• Determine an opportune time to reach out to a prospect or account based on key signals
• And more!

Add it all up, and it’s the easiest way to equip your reps with the tools they need to close more deals faster while continuously improving the way they work.

Looking to increase your top of funnel and accelerate existing deals? LeadIQ’s products can help you understand more about potential prospects and buying signals from companies already in your pipeline. Contact our sales team to understand how.

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