How pipeline coverage works
Pipeline coverage compares the open pipeline you have with the revenue you still need to close. The coverage you need is 1 divided by your win rate. The coverage you have is your open pipeline divided by the target. The difference, in dollars, is your pipeline gap.
Take the example in the calculator. The team must close $500,000, wins 25% of its pipeline value, and has $1,200,000 open. It needs 4x, or $2,000,000. It has 2.4x, so the gap is $800,000. At $20,000 a deal, that is 40 new deals.
New deals need a full sales cycle to close. The calculator takes the sales cycle from the days left, and spreads the new deals over the weeks that remain.
What is a good pipeline coverage ratio?
The common rule of 3x coverage fits a team that wins about one third of its pipeline value. A team that wins 20% needs 5x, and a team that wins 50% needs 2x. Use your own win rate, not the rule.
| Win rate | Coverage you need |
|---|---|
| 50% | 2x |
| 40% | 2.5x |
| 30% | 3.3x |
| 25% | 4x |
| 20% | 5x |
| 10% | 10x |
Coverage only counts if the deals are real. A deal with no close date, or no activity for weeks, makes coverage look better without adding revenue.
How to close a pipeline gap
Clean the pipeline first. Close or update deals with no recent activity or a past close date, then calculate again. A smaller, real number is more useful.
Set a weekly target. Use the new deals per week as the prospecting target for the team, and check it in each pipeline review.
Start early. Deals created late in the period need a full sales cycle, and often close in the next period.
Raise the win rate. Qualify deals earlier and drop poor fits. A higher win rate lowers the coverage you need.