What Everybody gets Wrong about Win Rates

It is quite daunting to see how history simply-put is an ever-repeating cycle. Just about a few years back we all went through the tragedy of a global pandemic. Back then, markets shut down, the economy stood still. At that time, many experts warned that a recession might be near - which would suddenly shift the focus of businesses to operational rigor and excellence rather than spending their money left and right.

Long-story short: While 2023 was most likely the beginning of an economic shift, forcing a true re-definition of internal company metrics, 2025 might just become the new peak of the current economic escalation.

When in Doubt, Follow the Numbers

For the past year-and-a-half I have been having the privilege to work with the most data-driven Chief Revenue Officer and their direct reports out there. That said, these Revenue Leaders had understood early on, that our current economic climate will not bounce back as fast as most of us would have hoped for.

With such a long-term change to the economy and global company spending, every organization is forced to adapt as well.

This is the time to go back to the drawing board and re-evaluate your key company metrics.

While having these conversations about pipeline generation, churn-rates, customer-lifetime-value metrics, a key takeaway I learned was that many of these "so obviously basic metrics" were often not as clear as many thought leaders believed.

Each organization seemed to have their own twist for each of these. And here are the versions which I have seen work best.

Win Rates: More Than Just a Percentage

We have all heard the question: "What's our win rate?" It seems simple, but as with most things in sales, the devil is in the details.

The key lies within the starting point of your measure or cohort. Do not wait for a certain qualification date but rather try to understand what has been happening from the very beginning of your opportunity process.

• Start measuring from your "Sales Accepted" stage
• Bridge gap between Marketing Qualified Leads (MQL) vs Sales Qualified Leads (SQL)
• Monitor these conversion rates

Here is a great example by Andy Mowat in his article about Win Rate Definitions:

What you will learn quickly is that not all lids will fit every pot. Every pipeline and lead or opportunity type will be slightly different. Which makes it even more important to use different ways of looking at your organization's Win Rates:

In-Quarter Win Rate = Amount of Opportunities Closed Won / Amount of Opps Closed Lost

versus...

Revenue Win Rate = Amount of Opportunities Closed Won / Amount of Total Open Pipeline

Once these are established and tracked over time, you are going to be able to leverage the gained data to get nurture other KPIs.

Sales Velocity: Speed Meets Strategy

Sales velocity is not just about being fast – it is about being smart. This metric shows how quickly opportunities are zooming through your pipeline and turning into closed deals.

A higher sales velocity is like a well-oiled machine – it indicates successful strategies, high-quality leads, and efficient processes.

Here is the formula that I have seen work best:

Putting It All Together

Both Win Rate and Sales Velocity metrics will provide you with the most solid and robust foundation to optimize your pipeline generation and execution processes.

Again, there are many more metrics you could worry about however I have found these two to be the most important ones. Whether you're closing 20 out of 50 deals for a 40% win rate, or aiming to increase your sales velocity, these metrics are your North Star.

What is even more critical is your organization's ability to monitor these rates in real time and at the global company level (ideally in the form of a report or dashboard).

However, should you not be satisfied, have a look at the Sales Metrics overview by LeanScale below: