Understanding Sales Pipeline Coverage: Does It Really Help Win More Deals?

There is no evidence that more opportunities result in more won deals. More opportunities simply indicate the presence of more opportunities.

You are right to acquire more opportunities than you need to reach your sales goals, but 2X your goal seems to be a reasonable coverage. This means you will need a 50 percent win rate. If you need 3X your pipeline, you will need a 33 percent win rate.

Recently, one sales team confessed to having a 4X pipeline, proving they had a 25 percent win rate. I wish this was the largest coverage number I have ever seen, but one sales leader demanded 8X the sales goal; his team had a 12 percent win rate.

Misconceptions about Sales Opportunities

Those who believe that more opportunities will ensure they reach their goals also believe that activity is more important than outcomes. In B2B sales, it is easy to require your sales reps to make 50 outbound calls every day. It’s also easy to demand that your sales reps send 50 emails. For our purposes, you can demand your sales force doubles, triples, or quadruples their pipeline.

Sales leaders and sales managers are correct that increasing opportunities is an outcome. Unfortunately, that is not the outcome you need. You need enough wins to reach your targets.

The Reality of Excessive Sales Pipeline Coverage

Let us look at what this over-coverage gets the salesperson and their sales manager. Let’s look at Jimmy, an average salesperson, with a win rate of 25 percent (as this is what most believe the average win rate is in enterprise-level deals). Jimmy’s sales manager demands 4X Jimmy’s coverage. Jimmy does his very best; he spends all his time creating opportunities, which is his goal. His manager requires him to log every opportunity in the CRM so he can update the sales leader on the increase in coverage.

Unfortunately, Jimmy did what he was told to do. He was able to meet the coverage quota he was assigned. A small number of these “opportunities” are qualified. Most of the rest of his pipeline are suspects. But don’t blame Jimmy; he was doing what he believed was a priority. This is a fool’s errand, and it is why so many sales organizations fail to reach their goals.

There is no evidence that more opportunities result in more won deals. More opportunities simply indicate the presence of more opportunities. All the coverage that isn’t converted does nothing for your revenue.

Effective Strategies to Overcome Pipeline Addiction

If you want sales to be a numbers game, then pipeline coverage is not the right KPI. It says very little about your ability to reach your sales targets and goals. The KPI that matters most is your win rate. The second KPI is the probability of the opportunities. The combination of higher win rates and high probability is how you can break the addiction to pipeline coverage.

Let’s give Jimmy another way to reach his goals. Instead of starting with pipeline coverage, we start Jimmy with a program to help him increase his sales effectiveness, increasing his win rates, even if it takes time. Jimmy gets coaching from his sales manager every two weeks to help him develop.

Jimmy’s manager will need to work with him to qualify deals and determine their probability of being won. Jimmy still needs coverage, but he may need less of it. Instead of having to spend all his time trying to create new opportunities, he can use the time he reclaims to work on converting his most likely opportunities into won deals.

As Jimmy becomes more effective, his win rates will grow, and he will start to recognize which deals to pursue and which to ignore. Eventually, Jimmy will become an effective salesperson.

Rethinking Sales Goals and Opportunities

I understand that most sales organizations believe that an abundance of opportunities is how they will make their goals. Most sales managers are required to report the growth of their coverage to their sales leaders. If the sales organization would put the same focus on sales effectiveness and increasing win rates, they would improve their sales results.

I know that I am on the wrong side of this conversation. My perspective is that winning deals is the only way you reach your sales goals. Every opportunity that isn’t won produces exactly zero dollars of revenue.

If you are a sales leader, try to balance the coverage with an increase in your win rates. If you are going to require greater coverage, ensure your sales force only logs high-probability opportunities. This will prevent your reps working on low-probability prospects.

If you are a salesperson, do what you need to build the coverage you have been asked to generate. But then, learn to identify what is a deal and what is a waste of your time. At all times, work on increasing your sales effectiveness and your win rates. You tell me your win rates, and I will know much about you.

Do good work, and I will see you here tomorrow.