Pipeline coverage

Pipeline coverage is the ratio of open pipeline value scheduled to close in a period to the quota or revenue target for that same period. It shows whether a team has enough deals in play to reach its number once the usual share of those deals is lost. Teams express it as a multiple of quota and set the target multiple from their own win rate.

How to calculate it

Pipeline coverage = open pipeline closing in the period / quota for the same period.

The inputs have to match on timing. Bigtincan describes the method as dividing "the amount of open pipeline you have, which is set to close in the period you’re measuring, by the quota you have for that same period."

The target multiple comes from your win rate: required coverage = 1 / win rate. In Bigtincan's example, a 25% win rate gives 1 / .25 = 4x.

Worked example

Take a remaining Q1 quota of $500,000 and $1,500,000 of open Q1 pipeline. That is 3x coverage (Bigtincan). If the team wins 25% of its pipeline, it needs 4x, so it is short even though 3x sounds healthy.

The common 3x to 4x rule works because most companies have win rates of roughly 25% to 33% (Bigtincan). Check your own win rate before you adopt the rule.

Weighted view

Forecast coverage compares weighted pipeline to quota. Suppose quota is $1M, pipeline is $3M and the forecast is $0.8M. Pipeline coverage is 3x and forecast coverage is 80% (Bigtincan). Track both numbers.

Usual mistakes

• Treating every stage the same. The plain ratio ignores opportunity stages and the buying cycle (GSP Solutions).
• Keeping stale deals in the count. Pipeline can include deals that slipped from earlier periods with little change in their odds (GSP Solutions).
• Using one blended ratio. Win rates differ between new and existing customers, business lines and territories (GSP Solutions).
• Ignoring cycle length. Longer sales cycles or lower win rates call for higher coverage (HubSpot).

When it matters to you

Current-quarter coverage is mostly sales execution. Next-quarter coverage tells you whether demand generation is creating pipeline fast enough. Bigtincan advises measuring current and future periods at least weekly.

To run the numbers, use the pipeline coverage calculator. To work back from a gap to the pipeline you need to create, use the reverse funnel calculator.