Send Koala

sales-velocity

What is Sales Velocity? Everything You Need To Know

Measuring your sales velocity is the first step toward improving your sales process and boosting the amount of income your company generates. There are similarities to be drawn between maximizing your sales velocity and improving your automobile’s performance. 

 

There is no one-size-fits-all solution to a quicker car, just as there is no solution to a faster sales velocity. The trick is to break everything down into its component elements so that you may make minor improvements on each one.

 

Running your deal velocity data may also disclose some crucial facts about the health of your pipeline and your team’s effectiveness, as well as assist you in forecasting how much you’ll sell and how long it will take you to do it. Time is an important metric to track, not just in terms of your sales teams’ productivity.

 

On the other hand, sales velocity takes a step further and assesses how rapidly your company makes money. Sales velocity can help firms see the “larger picture” if they only use one statistic to gauge their marketing and sales success.


This article will learn about Sales Velocity and everything you need to know about it. Let’s get this party started;

What Is Sales Velocity?

The rate at which a prospective client passes through a company’s sales funnel and earns money is known as sales velocity. It represents a sales team’s health and productivity and areas where the sales process might be enhanced.

 

You may also break this measure down by salesperson to determine individual productivity. If you want to be more specific, you may look at the number of possibilities by area or consumer group.

 

Making tiny, regular adjustments to your procedures and monitoring how they affect your sales velocity is a terrific way to determine when and what isn’t. It offers your salespeople a clear picture of how quickly potential clients are moving through the pipeline and allows them to precisely estimate their outcomes.

Benefits of Sales Velocity

The time it takes for your sales staff to move a deal from opportunity to closure. It’s an essential sales measure for businesses of all sizes. 

 

It allows sales directors to estimate revenue, review their sales process, better equip salespeople, and identify methods to shorten the sales cycle.

 

Sales velocity is critical to your company’s capacity to flourish and expand. The quicker prospects move through your pipeline, the more sales you’ll be able to close. As a result, a higher sales velocity indicates that you are generating more income in less time.

 

Velocity is a metric that indicates how many units you’re selling per point of distribution. As one expert puts it, you look at product velocity as part of a computation: Sales = Distribution X Velocity. In other words, velocity is a reliable indicator of your product’s consumer demand.

 

As previously said, the faster you can close transactions and create income, the less time it takes to move leads through your sales funnel. Consider evaluating your sales velocity at regular periods to compare historical and current performance, allowing you to evaluate sales process modifications.


Change may affect your team, your organization, and the sector in which you operate. Keeping track of your sales velocity following any of these changes can reveal if they had a beneficial or harmful impact on your company. In any case, it teaches an important lesson.

Variables of Sales Velocity 

Let’s look at each of them and how you can utilize them to help your company plan and establish goals.

Conversion Rate

 

The percentage of prospects that make it through your sales funnel and become paying customers is known as your conversion rate. Your company’s conversion rate is a substantial measure of how effectively leads have been qualified. Still, it also reflects the efficacy of your current sales strategy. It’s essential to determine whether there’s a common point in the pipeline where leads are commonly departing.

 

For instance, if you receive 100 leads in a month and only 12 of them become customers, your conversion rate is 12%. Similarly, suppose you have 20 potential clients who inquire about an offer but only four of them complete the transaction.

 

In that case, your conversion rate is 20%. It’s critical to keep track of this figure since it indicates how qualified your leads are.

 

Divide the number of sales won by the total number of sales opportunities to find your win rate. 

 

Increase your win rate by acquiring and nurturing high-quality leads, such as referrals or prospects who have previously expressed a strong desire to buy.

 

Keep in mind that some of the deals closing within the measured period may have started during a previous sales period depending on the sales cycle and period being monitored. It’s also possible that leads that are currently being converted will not shut within the specified time frame.



Average Deal Size 

The average transaction size is the only aspect of sales velocity directly related to money. 

 

Hence it should be a key indicator for every business owner. Knowing how much a customer will spend allows them to anticipate new customer income and assess the return on existing customers.

 

The duration of your sales cycle is determined by the number of steps in the sales process, the cost, and the complexity of the solution being given. Customers and salespeople alike want the selling process to be as quick and painless as possible.

 

Make sure you’re getting the most out of this resource for both your prospect and yourself by incorporating offers or add-ons that will improve your prospect’s life while raising your average deal value and sales velocity.

 

Never impose a product or service on a consumer who doesn’t require it; this is a sure way to lose prospects and new clients.

 

 

Length of Sales Cycle

 

This is the single aspect of sales velocity that you should avoid increasing. Shortening your average sales cycle and closing higher quality transactions faster may be accomplished by creating a more efficient sales process, revising your sales playbook, and occasionally boosting manpower to your sales force.

 

Shortening your average sales cycle and closing higher quality prospects faster may be accomplished by creating a more efficient sales process, revising your playbook, and occasionally increasing manpower to your team.

 

The duration of your sales cycle is determined by the price of your product, its complexity, and the number of phases a prospect must go through to seal a contract with your company. B2B clients typically require a substantially longer time to make a purchase choice.

 

This does not, however, imply that things should be rushed. You don’t want to pressure potential consumers into making a purchase they aren’t ready to make. Still, you also don’t want to keep them waiting.

 



Number of Opportunities

 

This is the total amount of deals in your pipeline during the period you’re tracking. It’s critical to establish clear parameters for what constitutes a qualified lead so you can determine which opportunities should be included in this statistic.

 

You may also split out prospects by salesperson, area, or product if you want to compare sales velocity internally. Your bottom line will suffer if your pipeline is full of poor leads with only a few that have a possibility of closing. 

 

Consider getting high-quality leads to increase sales velocity, even by attracting fewer overall prospects. “Rather of seeing the same weary pipeline week after week,” Tyre ads, “it’s nice to see chances pop up and then terminate.”

 

If you don’t receive a sale immediately, don’t become disheartened. Instead, keep your expectations realistic about what form of business solution would work best for your firm and continue to cultivate partnerships with these types of businesses.


This indicates that these individuals are decision-makers, have financial resources, and require your goods. 50% of leads aren’t a good fit for your organization, according to Sales Insights Lab. Don’t strive to get as many contacts as possible for your database – they won’t bring you any money. Instead, concentrate your efforts on helping individuals with problems that you can address.

FAQ

  • What does sales velocity mean?

The rate at which you make money is measured by your sales velocity. It examines how quickly leads move through your funnel and how much value new customers generate over time. Why Is Tracking Sales Velocity So Important? … As a result, a higher sales velocity indicates that you are generating more income in less time.

 

  • What is the sales velocity formula?

Multiply the number of chances, average deal value, and win rate together, then divide by the average sales cycle duration.

 

  • What does velocity mean in business?

In business, velocity refers to the time it takes a corporation to reach particular milestones, measured in days, hours, or minutes. It is the amount of work that is completed in a given time. Additionally, velocity may be seen in all company areas, including product or service development, sales, and marketing.

 

  • What is sales pipeline velocity?

The pace at which leads travel through the sales pipeline is pipeline velocity. Consider it a water-transporting pipeline. The water will flow quickly if the pipeline is clear.

Closing Words

Sales Velocity gives your marketing a personal touch and has been demonstrated to increase engagement and revenue. Your company’s performance is directly proportional to its sales velocity.

 

The more quickly you can sell, the better. You’ll have a better sales velocity if you can efficiently move prospects through the funnel and convert them into closed-won agreements. 

 

This formula provides a framework for assessing the health of your sales process using a set of four well-defined criteria that help you determine which techniques are working—and which aren’t.

 

Still, the four deal velocity levers should just be used as a starting point for your study; you’ll need to delve deeper to figure out what’s genuinely slowing down your revenue engine.