3 to 5 times pipeline is a hedge

Ask a sales leader how much pipeline they need and you will usually hear 3 to 5 times target. It is treated as a law of nature. It is really a hedge.

What the hedge covers

If you can’t see how deals are moving, you can’t say which ones will close. So you carry more of them than you need and expect most to fall away. The coverage number is the cost of not knowing.

A CRM can count deals

A CRM can tell you how many deals you have and what stage someone typed in. Stage, amount and close date are a snapshot, updated when someone remembers, and often just before the forecast call. They don’t tell you whether a deal is advancing.

Measure the movement

Deal advancement is the most important part of a sales approach and the least measured. Give every deal a route with an owner and a date on each step, and you can see what is done, what is late, and how fast this deal is moving compared with the ones that closed.

Once you can see that, the coverage number stops being a guess. You may still want some cushion. You will know how much, and why.

Where to start

Pick your ten biggest open deals. For each one, write down the next three steps, who owns them and when they are due. How many can you fill in without asking the Rep?