Does the pipeline number include deals just created?

Yes, any deal still open and real. Remove deals that have gone quiet, since they inflate coverage.

Why does the needed multiple depend on win rate?

Because only part of the pipeline closes. A lower win rate means more pipeline is needed to reach the same goal.

Is there a calculator for this?

Yes. The pipeline coverage calculator on this site uses the same arithmetic as the example above.

5. Pipeline measures

What is pipeline coverage?

Pipeline coverage compares the deals you have in play with the revenue you want to close. Divide the value of open opportunities by the target for that period, and the result is how many multiples of the target your pipeline holds. Set it against your win rate to judge whether that is enough.

The formula

Pipeline coverage

pipeline coverage = open pipeline value / revenue goal

The parts

Open pipeline valueThe total value of deals still in play for the period. Closed deals and dead deals are out.
Revenue goalThe amount you want to close in that same period.
Win rate sets the needIf you win one deal in four by value, you need about four times the goal in pipeline. Divide 100 by your win percentage to find that multiple.
The gap becomes a to-doTake the pipeline you still lack and divide it by a typical deal size. That is how many new opportunities your outbound has to open.

One quarter at Ridgeway Telematics

Ridgeway Telematics is an invented company with a quarterly goal and a pipeline report.

By hand

Revenue goal: $600,000. Open pipeline: $1,500,000.
$1,500,000 / $600,000 = coverage of 2.5 times.
Ridgeway wins 25 percent of pipeline value, so it needs 4 times the goal: $2,400,000.
The gap is $2,400,000 - $1,500,000 = $900,000. At $30,000 a deal, that means 30 new opportunities.

Revenue goal$600,000

Open pipeline$1,500,000

Pipeline needed$2,400,000

Pipeline against the pipeline the win rate calls for, in dollars.

How to apply it

Pull the open pipeline value for the period and the revenue goal for the same period.
Divide, then compare the result with 100 divided by your win percentage.
Turn any gap into a number of opportunities using a typical deal size.
Plan outbound volume to create those opportunities, and recheck every few weeks.

Mistakes to avoid

Counting stale deals that nobody has touched in months.
Using a win rate by deal count when the pipeline is measured by value.
Mixing pipeline for one quarter with a goal for another.

Cost per meeting

Cost per meeting is everything you spend on outbound in a period divided by the number of meetings that actually took place in it.

Sales qualified lead

A sales qualified lead (SQL) is a lead that the sales team has reviewed and accepted as a real opportunity worth active selling.

Total addressable market

Total addressable market (TAM) is the yearly revenue you would earn if every company that fits your product became a customer.

Does the pipeline number include deals just created?: Yes, any deal still open and real. Remove deals that have gone quiet, since they inflate coverage.
Why does the needed multiple depend on win rate?: Because only part of the pipeline closes. A lower win rate means more pipeline is needed to reach the same goal.
Is there a calculator for this?: Yes. The pipeline coverage calculator on this site uses the same arithmetic as the example above.

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