Calculate realistic pipeline targets based on your win rates and sales cycle, not industry averages.
Most SaaS companies use generic 3x pipeline coverage rules that don't match their reality. Here's how to calculate the right coverage ratio using your actual data, so you hit your targets consistently.
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What you'll learn
- ✓Gather Your Historical Data
- ✓Calculate Your True Win Rate
- ✓Measure Your Sales Cycle
Step-by-Step Implementation
1
Gather Your Historical Data
Pull the last 12 months of deal data from your CRM. You need: deal values, close dates, win/loss status, and stage progression timestamps.
Pro Tips
•Export deals from your CRM, don't rely on built-in reports
•Clean the data: remove test deals and outliers
•Include deals that are still in pipeline for velocity calculations
2
Calculate Your True Win Rate
Don't use overall win rate. Calculate win rates by deal size, source, and sales rep. This gives you realistic conversion expectations.
Pro Tips
•Segment by deal size: <$10K, $10K-$50K, $50K+
•Track win rates by lead source and marketing channel
•Update win rates quarterly as your product and market evolve
3
Measure Your Sales Cycle
Calculate median sales cycle by deal size and complexity. Use median, not average, to avoid outlier skew.
Pro Tips
•Measure from first meaningful conversation, not lead creation
•Track sales cycle by stage to identify bottlenecks
•Account for seasonal variations in B2B buying cycles
4
Build Your Coverage Formula
Coverage = Target Revenue ÷ (Win Rate × Average Deal Size). Then multiply by 1.2 to account for deal slippage and pipeline variability.
Pro Tips
•Test your formula against historical quarters
•Adjust coverage requirements by quarter (Q4 often needs higher coverage)
•Set different coverage requirements by sales stage
5
Monitor and Adjust
Review your coverage model monthly. Update win rates, deal sizes, and cycle times as your business evolves.
Pro Tips
•Create alerts when pipeline coverage drops below threshold
•Track leading indicators: meeting bookings, proposal sent
•Share coverage reports with marketing to align on lead requirements
Wrapping Up
The right pipeline coverage ratio isn't 3x for everyone. By using your actual data, you'll forecast more accurately and avoid the feast-or-famine cycle that kills SaaS growth.
AT
Altior Team
RevOps Specialists
Helping B2B SaaS companies build predictable revenue engines through strategic RevOps implementation.