Sales pipeline coverage is an important sales operations metric that measures the value of potential deals in your sales pipeline relative to your revenue target. It gives you insight into whether your current sales pipeline has enough potential business to meet your revenue goals.
How to Calculate Sales Pipeline Coverage
To calculate sales pipeline coverage, you take the total value of potential deals in your pipeline and divide it by your revenue target.
For example, if your pipeline has $2 million worth of potential deals and your quarterly revenue target is $1 million, you have 2x pipeline coverage.
This means your pipeline has enough potential business to meet your revenue goal.
A good rule of thumb is to aim for at least 1.5-2x pipeline coverage at any given time. This provides a buffer in case some deals fall through.
As a sales ops professional, you want to closely monitor pipeline coverage and alert sales leadership if it drops below the target coverage rate.
There are a few ways to improve pipeline coverage if it starts getting low.
You can work with sales reps to ensure they are adding enough new potential deals to the pipeline.
You can also help sales leadership prioritize closing larger, higher-value deals to boost the overall pipeline value.
Regular pipeline reviews and forecasting calls with reps are great ways to identify gaps and address any issues proactively.
The goal with pipeline coverage is to make sure your sales team has enough potential deals in motion to hit your objectives. By keeping an eye on coverage trends and working cross-functionally, sales ops play a key role in helping the business execute revenue targets and growth strategies.
