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How to value a gap: three methods and when to use each

A gap list is only a plan when each gap has a number beside it. This guide compares the three ways to value a missing product, account or lane, at list price, at the customer's own rate, and against an external wallet, with the cases each fits, the bias each carries, and the rule of stating the basis on every list.

The short answerValue a gap one of three ways and say which: at list price, which gives the upper bound and is right for new products; at the customer's own rate for what it already buys, which is the most credible estimate for cross-sell; or against an external wallet estimate, which is right for share of wallet where the total is outside your systems. Never mix methods on one list, and never present a valued gap without its basis, because a ranked list is only as trustworthy as the least defensible number on it.

A gap without a value is a product name. Sixty gaps without values are a list nobody reads. The three methods below turn a gap into a figure, and the one rule that matters more than the choice is that the list says which method produced it.

Method 1: list price

Gap value = list price of the missing product × the customer's expected quantity

Use it for new products with no purchase history anywhere, and for upper-bound sizing in a plan.

Bias: overstates, because almost nobody pays list. A list valued this way ranks correctly but sums to more than will close.

Method 2: the customer's own rate

Gap value = what the customer spends per product it already buys × the number of missing products

Or, more precisely, the customer's spend on products of the same type it does buy, applied to the missing ones.

Use it for cross-sell and range gaps: a store that stocks four SKUs, a client that holds two practices, an account that owns one of three modules.

Bias: understates for customers who buy little today and could buy much more; overstates for a customer whose one product is unusually large. It is the most credible number in front of a salesperson, because it is what that customer has actually paid.

Method 3: against an external wallet

Gap value = wallet estimate − what you hold

Use it for share of wallet, where the total is outside your systems: institutional clients against a benchmark, operators against rig activity, shippers against tendered volume.

Bias: depends entirely on the estimate. The estimate's basis has to be on the row, and where none is reliable, report coverage, which needs no estimate, rather than share.

Choosing

Situation Method
New product, no history List
Cross-sell to an existing customer Own rate
Range gap in a store Own rate, by SKU type
Share of a client's total spend Wallet
New account, no history Band average, labelled

A worked comparison

One account, two missing products, three methods.

Method Analytics gap Automation gap Total
List $30,000 $36,000 $66,000
Own rate, from Core at $48,000 $24,000 $28,800 $52,800
Wallet, estimate $140,000 total, $48,000 held $92,000

Three different numbers, each right for its purpose. The cross-sell list should show $52,800. The account plan can carry $92,000 with the wallet's basis beside it. Nobody should see $66,000 and $92,000 on the same page without the labels.

The rule

Every valued gap carries its basis: "at the customer's rate per product held", "at list", "against Coalition wallet estimate, Q2". A list with mixed or unstated bases cannot be ranked, and a ranked list that cannot be reconstructed is discarded the first time a salesperson disagrees with a line.

Where it goes wrong

Probability baked in. A gap "worth $40,000 at 30 percent" is $12,000 or $40,000 depending on who reads it. Keep probability out of the list.

Methods mixed on one list. Wallet-based gaps for the top accounts and own-rate gaps for the rest, ranked together. The top accounts win the ranking by method, not by opportunity.

Own rate from one product. A customer whose only product is unusually large produces inflated gaps. Use the type-matched rate, or cap at the band average.

Basis lost in the export. The value survives into a slide; the basis does not. Carry it as a column.

Where this is used

The SaaS whitespace, range gap and share of wallet guides each use one method and say which. Covirage shows the basis on every gap it lists. The glossary entry on whitespace has the short version.

Questions people ask

Which method is most accurate?

The customer's own rate, for cross-sell, because it is what a similar sale to that customer has actually closed for. List price overstates; wallet estimates depend on the estimate. Accuracy matters less than consistency: one method per list, stated.

Should gaps be discounted for probability?

On the list, no. A gap value is the size of the opportunity; probability belongs to the pipeline once the opportunity is worked. Mixing the two produces a number nobody can reconstruct.

What about accounts with no history?

Use the band average: what customers of that type and size spend on the product. Label it as such. A new account's gaps are prospects, not targets.