Glossary: pipeline measures
What is pipeline coverage?
Pipeline coverage is the ratio of open sales pipeline to the sales target for the same period. You work it out by dividing the open pipeline value by the sales target. A result of 3 means the pipeline is worth three times the target.
Formula
Worked example
$900,000 ÷ $300,000 = 3
Pipeline coverage is open pipeline value divided by the sales target.
The ratio answers one question: is there enough in the pipeline to hit the number? Three things decide how to read it.
Open pipeline is the total of live deals.
Add the value of every opportunity that could close in the period. Leave out deals already won or lost.
The target is for the same period.
Compare this quarter's pipeline with this quarter's target. Mixing periods gives a ratio that means nothing.
Win rate sets the coverage you need.
Divide 1 by your win rate. A team that wins 25% of its pipeline value needs 1 ÷ 0.25 = 4 times coverage.
Here is pipeline coverage worked out for an invented company.
Imagine Lindenquay, an invented fleet tracking company. Its sales target for the quarter is $300,000. At the start of the quarter its open pipeline adds up to $900,000, so its pipeline coverage is $900,000 ÷ $300,000 = 3, or 3 times.
Lindenquay's records show it wins 25% of its pipeline value, so the pipeline needed is 4 times the target, or $1,200,000. It is short by $300,000. With an average deal of $30,000, that is 10 more opportunities to create, which sets the goal for outbound this quarter.
Lindenquay's quarter: target, pipeline and pipeline needed
Use pipeline coverage to set outbound goals.
Coverage turns a revenue target into a number of opportunities, and that into meetings to book.
The four steps in order
- 1Find win rate
- 2Set the ratio
- 3Measure the gap
- 4Plan meetings
- 1
Find win rate from your own deals.
Use closed deals from past periods: value won divided by value that entered the pipeline.
- 2
Set the ratio you need.
Divide 1 by the win rate to get your own coverage figure.
- 3
Measure the gap each week.
Subtract open pipeline from pipeline needed.
- 4
Plan meetings from the gap.
Divide the gap by average deal size to get opportunities, then work back to the meetings that create them.
Prymatica's work sits at the start of that pipeline: we source verified prospects, run the outreach and book interested replies onto your calendar. See how Prymatica's cold email process works.
Teams make these mistakes with pipeline coverage.
A fixed ratio is copied from elsewhere.
The right ratio comes from your own win rate. A team that wins half its deals needs far less than one that wins a tenth.
Stale deals pad the number.
Opportunities with no activity for months are not real pipeline. Remove them before you divide.
Coverage is checked once a quarter.
By the time a gap shows at quarter end, it is too late to fill. Check weekly.
These glossary terms sit next to pipeline coverage.
Questions
People ask these questions about pipeline coverage.
How do you calculate pipeline coverage?
Divide the total value of open opportunities by the sales target for the same period. For example, $900,000 of open pipeline against a $300,000 target is $900,000 ÷ $300,000 = 3 times coverage.
What is a good pipeline coverage ratio?
The one that matches your win rate. Divide 1 by the share of pipeline value you win. A 25% win rate needs 4 times coverage, and a 50% win rate needs 2 times.
What is the difference between pipeline coverage and win rate?
Win rate is the share of pipeline that closes. Pipeline coverage is how much pipeline you hold compared with the target. Win rate tells you how much coverage you need, and coverage tells you whether you have it.
How does outbound affect pipeline coverage?
Outbound creates new opportunities, which raises the open pipeline value. When coverage is short, the gap divided by average deal size gives the number of opportunities outbound needs to add.
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