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.