This piece was originally published on Concivi Growth Insights. Click here to read the original article.
Pipeline coverage is one of those numbers everybody quotes and almost nobody interrogates.
Three to five times your remaining goal and you’re covered – that’s the rule of thumb most of us have been carrying around for twenty years.
I ran an analysis recently for a company sitting at 6.6x. By that rule they were in terrific shape.
They weren’t. And it took me a bit of digging to work out why. The short version is that coverage was the wrong question, and the ratio was quietly hiding the right one.
What 6.6x Was Actually Made Of
Nobody at this company was cooking the books.
Every number they gave me was defensible on its own. The trouble is that pipeline health almost always gets reported as volume, and volume tells you nothing about whether the money shows up.
Three things were inflating the forecast:
1. Most of the pipeline sat in products they’d never sold.
80% of open weighted pipeline was in two product lines with a combined 0.8% close rate. The one product line that actually closed – 35.8% – was carrying a small fraction of the value.
And the forecast applied the same stage probabilities across all three, as though a Product 2 deal in Negotiation meant what a Product 1 deal in Negotiation meant. Their own history said otherwise, and had been saying so for a while.
This is where the 6.6x fell apart. That 3x-to-5x guidance assumes you have a known win rate, and the multiple you actually need climbs as that rate drops.
This company had no Closed-Lost stage at all – when was the last time anyone on your team marked a deal lost? – so there was no win rate to calculate and no way to size the coverage they genuinely needed.
2. Late-stage deals had blown past their own record.
80% of the deals in Negotiation and Deployment – 73 of them, out of 91 – had already been open longer than the single longest deal the company had ever closed.
That is $9.5M of weighted value parked in a stage it has never once come back from. Those deals are dead. And this is the quiet cost of having no lost stage: there is nowhere to put a dead deal, so it just sits in Negotiation looking like revenue.
Quick gut check – how long is the longest deal you have ever actually closed? Most leaders I ask don’t know the number offhand, and it is one of the most useful numbers you can have.
3. A third of the pipeline came from one conference.
$17M of $56M in open pipeline traced back to a single event. 22 of those companies were logged with no discovery call, no named buyer, and – this is the tell – identical boilerplate notes across every single one. That is a badge scan that got promoted to an opportunity.
Worth noting where that finding came from: not the CRM export. The CRM had a tidy link to a notes document, and the finding was sitting in the document. If I had worked only from the structured data I would have missed the biggest item in the report.
Add it up and you get the number that mattered: 79% of open weighted pipeline was stalled, single-touch, or both. They had plenty of pipeline. Almost none of it had ever demonstrated it could close.
Five Checks You Can Run This Week
All of this runs off a deal-level CRM export in an afternoon. No tooling required.
1. Put close rate next to pipeline weight.
Break your open pipeline out by product line or segment, then put each one’s trailing close rate right beside it. If most of your weight is sitting where you have the least evidence of winning, you have found problem number one, and no coverage ratio is going to rescue it.
2. Compare late-stage aging to your own record.
Pull every deal in your last two stages, sort by days in stage, and hold it up against the longest cycle you have actually closed. Anything past that either comes out of the forecast or gets a documented reason to stay. A reason. Not a feeling.
3. Count the contacts.
In every late-stage deal, count documented contacts. One name is not a late-stage deal. The exception – and it is a real one – is a genuinely transactional, one-call-close product somebody can buy on a credit card.
Short of that, virtually every purchase today has a second person in it, even in flatter organizations, if only the CFO who signs off on everything. If your late-stage deals are single-threaded, you have not met the person who can say yes yet.
4. Trace origin, and read the notes.
Flag every open opportunity with no discovery call and no named buyer. Then go read the actual call notes rather than the CRM’s summary of them – as above, the best findings tend to live in the document the CRM merely links to.
If you cannot tell which entries came from a list add or an event scan versus a real qualified conversation, that gap is your finding.
5. Now recompute coverage, honestly.
A ratio built on a proxy target, counting deals that just failed the four checks above, will flatter you every time. Set the real revenue goal, count only what survived, look at the ratio again. And if you take one thing from this post: start a Lost stage, this quarter.
Without it you cannot compute a win rate, and without a win rate you cannot know what coverage you actually need. Everything else here gets easier once you have it.
The Sharpest Point
The expensive deal in any forecast is rarely the obviously bad one – it is the one everybody quietly stopped questioning about eight months ago. The five checks above cost you an afternoon and will tell you more about next quarter than your dashboard has told you all year.
If that exercise moves your number, it was going to move anyway. Better in week two than week eleven.
Mike Schumann is the founder of Concivi Growth, where he works as a fractional CRO helping B2B companies build predictable, scalable revenue engines. His Revenue Diligence practice gives investors and CEOs an honest, data-driven read on whether a pipeline can deliver what the forecast promises.
