What is pipeline coverage, and how much do you need?

Pipeline coverage is the value of open pipeline divided by the revenue target for the same period. How much you need depends on your own win rate, because the ratio is only a stand-in for one question: given how often we win, is there enough here to reach the number?

What Is Pipeline Coverage? How Much You Need

Why a fixed multiple misleads

Teams often adopt one ratio as a rule. But the right figure follows from win rate. A team that wins a large share of what it qualifies needs far less pipeline than one that wins a small share. Work it out from your own history, per segment, and expect the answer to differ between new business and expansion.

The problem with counting everything

Coverage counts what is in the pipeline, and says nothing about how long it has been there. Deals older than your normal sales cycle are usually still open because nobody wanted to mark them lost. Including them makes coverage look healthy while the pipeline that can close this period is much smaller.

A more honest version

Find your median time from opportunity to won. Split open pipeline into deals younger than that and deals older. Report coverage on the younger part, and review the older part deal by deal. The number falls. Nothing got worse: you are seeing what was there all along.

What to watch beside it

Coverage by stage, since early-stage pipeline converts at a different rate from late-stage. How much was created this period against how much is needed for the next. And movement: deals that slipped, shrank or were pulled forward. Coverage is a snapshot, and those tell you the direction.

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