What is pipeline coverage?
Pipeline coverage is the value of your open pipeline divided by the quota it has to cover in the same period. If the deals you are working add up to three times the quarter's target, coverage is 3x. The coverage you need depends on your win rate: the fewer deals you win, the more pipeline you need.
Pipeline coverage · Also: Pipeline coverage ratio
How do you calculate pipeline coverage?
Pipeline coverage = open pipeline value ÷ quota for the period.
Count only deals that can close in that period. Metabase separates two versions:
- Raw coverage. Open pipeline value divided by quota. Simple, but an early deal counts as much as one about to sign.
- Weighted coverage. Each deal's value times its stage probability, added up, then divided by quota.
What pipeline coverage ratio do you need?
A common rule of thumb is 3x to 4x, but Metabase calls the "3× pipeline" rule "a heuristic, not a law." The target that follows from your own numbers is one divided by your win rate. Metabase's examples: a 33% win rate implies roughly 3x, 25% roughly 4x, and 50% roughly 2x.
A worked example
Example: a team has a quarterly quota of $300,000 and $900,000 in open pipeline, so coverage is 3x. If it wins 25% of its deals, that pipeline should close about $225,000. That is short of the quota, so the team needs more pipeline, a better win rate or bigger deals.
Where does new pipeline come from?
From first meetings. Work backward: the deals you need, divided by your win rate, give the meetings you need. The pipeline calculator does that math from your quota, average deal size and win rate, and shows the held meetings you need each month. If your market is small, count it first: your market is a pond, not an ocean.
Sources
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