What is Expected Value of a Deal?
Expected value applies a simple probability idea to a single deal: what is it worth once you account for the chance it does not close.
Summed across the pipeline it produces weighted pipeline; applied to one deal it guides how much time that deal deserves.
Short answer
The expected value of a deal is its full amount multiplied by its probability of closing, giving a risk-adjusted worth. A 100,000 deal at 30 percent has an expected value of 30,000. It is the building block of weighted pipeline and a sound basis for prioritization, since it balances a deal's size against its odds rather than chasing big long shots.
Key takeaways
- Deal amount multiplied by win probability.
- A risk-adjusted measure of worth.
- The building block of weighted pipeline.
- A sound basis for prioritizing deals.
Why it matters
Prioritizing by size alone chases big long shots; prioritizing by expected value balances size against odds. It is the rational basis for where a rep should spend limited selling hours.
How Ardovo handles it
Ardovo computes each deal's expected value from amount and refined win probability, so Rook can rank a rep's worklist by expected value and show which deals truly deserve the best hours.
Frequently asked questions
How do you calculate the expected value of a deal?
Multiply the deal's full amount by its probability of closing. A 100,000 deal at a 30 percent win probability has an expected value of 30,000. Summed across all deals, expected values produce the weighted pipeline.
Why prioritize by expected value?
Because prioritizing by deal size alone chases big long shots that rarely close. Expected value balances size against win probability, so you focus on the deals with the best risk-adjusted return on your limited selling time.
Where does the win probability come from?
From the deal's stage win rate, a scoring model, or an AI prediction based on engagement and fit. The more the probability reflects real signals rather than a fixed stage default, the more accurate the expected value.