Pipeline coverage

Not every deal closes, so a ratio of 1x is a plan to miss. The required cushion follows from the win rate: a team that wins one deal in four needs about four times the target in pipeline, and a team that wins one in three needs about three times. A common rule of thumb is 3x to 4x, but the right figure is whatever the team's own history says.

It is also an early signal. Revenue reports show work already done, while coverage shows whether next quarter is on track while there is still time to prospect.

• Count only deals past a clear qualification stage, so hopeful leads do not inflate the number.
• Work out the ratio you need from your own win rate, not from a blog post.
• Split coverage by rep, segment and deal stage, because a healthy average can hide one empty area.
• Look at deals by expected close date. Coverage that arrives after the period ends does not help the period.
• Check it weekly, and treat a falling trend as a reason to prospect now.

Pipeline coverage compares what could be sold with what must be sold. Take the target for the period, subtract what is already closed, and divide the value of the open qualified deals by what remains.

Say a quarterly target is £200,000 and £50,000 is already won. £150,000 remains. If £450,000 of qualified deals are open, coverage is 3 to 1, usually written as 3x.

• Including stale deals with no activity for weeks.
• Letting one very large deal make the ratio look healthy.
• Using a fixed 3x everywhere when the sales cycle or win rate differs by segment.