Sales Pipeline Coverage
Sales Pipeline Coverage (SPC) is the sum of the monetary value of your sales funnel compared to your revenue targets. SPC is calculated from potential buyers and leads who have shown that they are actively interested in purchasing a product or service.
As an example, if a company’s revenue target is $250,000 and there’s $250,000 in the sales pipeline, they’ve got 1X pipeline coverage. In this situation, every single potential sale will need to be closed in order for the business to meet its target.
Similarly, if there’s only $200,000 in the pipeline, that’s 0.8X pipeline coverage and the business will therefore fail to meet its sales target assuming that no new leads enter the sales pipeline and are closed on. Keeping Sales Pipeline Coverage in check helps businesses to generate revenue more predictably.
Sales Pipeline Coverage Explained:
Sales Pipeline Coverage FAQs
What is sales pipeline coverage?
Sales pipeline coverage is the sum of the monetary value of your sales funnel compared to your revenue targets. It indicates how much potential revenue is available compared to what is needed to meet sales goals.
How is sales pipeline coverage calculated?
Sales pipeline coverage is calculated by dividing the total value of opportunities in the sales pipeline by the sales target for a specific period. For example, if the sales target is $1 million and the pipeline value is $3 million, the pipeline coverage is 3x.
How much sales pipeline coverage is ideal?
A strong sales pipeline coverage is 3x (also expressed as 3:1) or 4x (4:1). This indicates that the potential sales volume is three to four times the sales target, which is a healthy buffer for achieving sales goals.