What is Sales Velocity & How to calculate it?

What is Sales Velocity?

Sales velocity is one of the Key Performance Indicator (KPI) of your sales performance. As the name suggests, it tells you how fast are you generating revenue. It denotes how fast your leads are moving through your opportunity pipeline to actual conversion.

Measuring Sales velocity can help you understand how fast is your sales process to close deals. How certain process change in your team is affecting your sales performance. It can also be used as a benchmarking median score for comparing individual reps' performance so that you can try to mentor your team accordingly.

How to calculate Sales Velocity?

To calculate Sales Velocity, you need to have 4 data handy:

1. No. of Deal Opportunities
2. Average Deal Value
3. Win Rate
4. Average Length of Sales Cycle

All the above data can be easily retrieved from your CRM. If you are not using a CRM yet for your sales. Do try ToolsonCloud Sales CRM today.

Once you are ready with the above data, you can just plug in the data to the formula of Sales Velocity.

Sales Velocity = (Opportunities x Deal Value x Win Rate) / (Length of Sales Cycle)

How to improve Sales Velocity?

As you can infer from the formula, there are 4 levers to improve your Sales Velocity. Try pulling any one lever and it can skyrocket your sales velocity.

  • It can be increased by increasing your opportunity pipeline.
  • It can be increased by increasing your deal size.
  • It can also be increased if you try channelizing your efforts to increase your deal win rates.
  • It can be increased if you try accelerating your sales cycle to reduce the sales process duration.

Hope you liked reading this post. Feel free to share your thoughts.

Btw, ToolsonCloud CRM can help you with sales team performance reports and metrics. Do check out sign up for your free ToolsonCloud CRM account and boost your sales productivity.
Previous Post
Next Post