What is Pipeline Coverage Ratio?
Pipeline coverage ratio is the multiple of qualified pipeline needed to hit a revenue target, typically expressed as 3x-4x of quota.
What is a good pipeline coverage ratio?
A healthy pipeline coverage ratio is 3x-4x your revenue target. This means if your quarterly quota is $1M, you need $3M-$4M in qualified pipeline. Coverage below 3x signals high risk of missing target, while coverage above 5x may indicate pipeline quality issues with too many unqualified opportunities.
Pipeline coverage ratio measures whether you have enough qualified opportunities in the pipeline to meet your revenue goal. A 3x coverage ratio means you need $3M in pipeline to close $1M in revenue.
How to Calculate Pipeline Coverage
Pipeline Coverage = Total Qualified Pipeline ÷ Revenue Target. For example, if your quota is $1M and you have $3.5M in pipeline, your coverage is 3.5x. Most B2B SaaS companies target 3x-4x coverage for enterprise deals and 4x-5x for SMB/velocity deals (due to lower win rates).
What Good Coverage Looks Like
Healthy pipeline coverage depends on your win rate. If your historical win rate is 25%, you need 4x coverage. If it is 33%, you need 3x. The formula is: Required Coverage = 1 ÷ Win Rate. Boards and CROs watch coverage ratio as a leading indicator because low coverage at the start of a quarter almost always predicts a miss.
Pipeline Coverage Mistakes
The most common mistake is inflating coverage with unqualified or stale pipeline. A 5x coverage ratio means nothing if 60% of the pipeline has been sitting there for months with no recent activity. Smart CROs track 'active pipeline coverage' which only counts deals with activity in the last 14-21 days.
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