What is Pipeline Coverage?

Definition

Pipeline coverage (or « pipeline cover ») is a sales metric that measures the ratio of your open sales pipeline’s value against your sales quota for a specific period. It is used to assess if a salesperson or team has enough opportunities in their pipeline to realistically meet their upcoming quota. For example, a 3x pipeline coverage means the total value of your pipeline is three times your quota.

$$\text{Pipeline Coverage} = \frac{\text{Total Value of Open Pipeline}}{\text{Sales Quota}}$$

Examples

• Ideal Coverage: A company knows its average closing rate is 25% (1 in 4 deals). To safely hit a $100,000 quota, it needs at least $400,000 in its pipeline. This represents a 4x pipeline coverage.
• Insufficient Coverage: A salesperson has a quarterly quota of $50,000, but their open pipeline for the quarter is only $75,000. Their pipeline coverage is 1.5x. This is a major red flag, indicating they are very unlikely to hit their target.
• Healthy Coverage: A sales manager requires all Account Executives to maintain a minimum of 3x pipeline coverage for the current quarter.

Advantages/Benefits

• Accurate Risk Assessment: It’s an early warning system that helps managers identify which salespeople are at risk of missing their quota.
• Improved Forecasting: Provides a more realistic, health-based check on sales forecasts. A high-value forecast with low pipeline coverage is unreliable.
• Proactive Sales Management: Allows managers to proactively coach reps with low coverage, focusing their efforts on building more pipeline.
• Drives Prospecting: Reinforces the importance of continuous prospecting, as reps must constantly add new opportunities to maintain their coverage ratio.

Related terms

• Sales Pipeline
• Sales Quota
• Sales Forecasting
• Closing Rate
• Opportunity
• Prospecting