Sales Velocity: What It Is & How to Measure It

Sales Velocity: What It Is & How to Measure It

We’ve all heard the adage, “time is money,” and nowhere is this more true than in the business of making sales. Every year, sales departments throughout the globe strive to perfect the art of persuading clients to make purchases more quickly. Time is an important metric to track, and not just in terms of the efficiency of your sales staff. Time and money wasted between the moment a prospective buyer becomes aware of your company and the moment they make a purchase. The goal is to hasten the progress of leads through the sales funnel.

The sales process may be seen as a river. You should want to be like a rapid, unobstructed river that never causes any boats to capsize. However, how quickly and effectively you can do things depends on a number of elements. Sales velocity is a measure that can assist you identify the points along the river where leads are becoming caught due to the presence of large boulders causing eddies and whirlpools. Sales managers may speed up the purchase process by focusing their attention on the areas with the most rocks.

In this article, we’ll discuss what sales velocity is, how to measure it, how to increase it, and why it’s important for businesses to keep tabs on it.

How do you define sales velocity?

A company’s sales velocity may be defined as the pace at which a lead is converted into a paying client. It not only reveals how well a sales team is doing but also where they can boost their performance.

The use of sales velocity in forecasting is also highly regarded. A company’s ability to forecast profits is bolstered by data showing how often and how quickly its consumers make purchases. This enables businesses to better allocate resources in light of anticipated profits and losses.

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Sales velocity formula

If you have a clear pipeline and an understanding of the various components, calculating sales velocity is a breeze.

Sales velocity = (Number of opportunities × average deal size × win rate or conversion rate) ⁄ sales cycle length

Think about the following parts so you can put the right numbers into the equation:

Number of opportunities (#): 

Your pipeline has this many qualified leads. Maintaining a healthy lead count requires investing little time and effort into lead qualification. The sales velocity will suffer as low-quality leads will not go farther in the pipeline.

Deal value ($):

 Another term for the typical cost of a purchase from your company. If your items are sold at fixed pricing, tracking their individual sales rates might be useful information. However, the average purchase value should be used when selling bundles or goods with a sliding scale.

Win rate (%): 

Before you can enter your win rate into the sales velocity calculation, you’ll need to figure it out. Simply divide your number of closed sales by your total number of sales opportunities to get your win rate. Your win rate will improve alongside your opportunity count as you work to qualify your leads. It seems to reason that an uptick in closed transactions would result from a focus on qualified leads.

Sales cycle length (L):

 Your sales cycle should be as quick as feasible in an ideal environment. The quicker a sale is made, the sooner a salesperson may move on to the next potential client.

Naturally, you don’t want to spend hours looking for these figures every time you need to compute your sales velocity. An effective customer relationship management (CRM) system or similar lead management or lead tracking software is essential for keeping track of sales velocity metrics.

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Metrics for accelerating sales growth

There’s nothing wrong with attempting to sell more quickly or make more money, but you need a strategy.

Opportunities, deal size, win rate, and sales cycle length are already factored in as some of the most frequent strategies to improve your sales velocity KPIs.

Let’s go through each one and figure out where you can make strategic improvements:

Multiply your chances of success.

Opportunity is not the same thing as a lead. Consumers who have taken some action, such as clicking on an ad or signing up for a newsletter, that indicates they could be interested in what you have to offer are considered leads. Possibilities are good leads. That implies a salesperson has evaluated the lead and determined that, based on those factors, the lead is more likely to convert into a paying client.

To boost sales, you don’t need an unending supply of leads, simply more possibilities. Instead of focusing on lead generation, have your sales team concentrate on lead qualification. Quantity is not as important as quality.

Increase the size of your typical sale.

This can be difficult because you probably don’t want to just raise prices across the board. Value and expense must be taken into account when determining prices and bundles. You’ll have more success upselling a consumer if you can pinpoint their specific problems and offer them the optimal package.

Identifying which prospects are more likely to purchase larger or smaller offers can also help boost the average transaction size. Get the lesser discounts out of the way quickly so you can devote your attention to the bigger sales. Don’t lose sight of the fact that even the smallest transactions add up to the big picture.

Increase your success rate by concentrating on conversion.

The effort invested on nurturing leads is wasted if a prospect drops out of your pipeline for whatever reason. To improve your success rate, you must first identify the barriers to purchase.

Find out why some leads are slipping out of the sales cycle at certain points. How much does it cost? Can we get along without it? You can fix the issues plaguing your business more effectively after you identify why potential customers are defecting.

Shorten your sales cycle

Increasing sales is as easy as cutting the time between making each transaction. Let me be clear: this has nothing to do with trying to force a sale. It’s still important to take the time to get to know a prospect and never force them into something they’re not ready for.

Therefore, you may initiate contact earlier and be more organized. You need to be prepared to respond immediately to any inquiries from potential customers. Keep marketing materials on hand, and provide those to potential customers who are on the verge of making a purchase.

You don’t have to hasten your exchanges, but you do want to hasten the intervals in between them.

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Sales Velocity Example

Assume your business-to-business sales team is currently working on 50 deals with an average deal amount of $3,500 and a win rate of 35%. Your sales tracking software indicates that on average, closing a deal takes 28 days. 

The following equation represents the sales velocity formula for your team:

Speed of making sales = (50 prospects * $3,500 * 0.35) / 28 days 

Productive Speed of Sales = $61,250/28 Days

Daily Sales Rate = $1,715

This equates to a daily revenue of $1,715, or a monthly revenue of $61,250, for your team. You may easily monitor the sales team’s progress against weekly, monthly, or quarterly targets. Good news if they appear to be on pace to achieve or exceed them. You may evaluate your sales activity and make course corrections if you find that your numbers aren’t trending in the proper way.


Your sales velocity is, without a doubt, the most crucial number you can monitor. Fortunately, it’s not as hard to trace as you may think. Keeping tabs on everything is a breeze with the help of a competent customer relationship management system. This will allow you to assess whether or not you are on track to meet your quarterly goals.

Ombir Sharma is Outreach Specialist at Tecuy Media. He is also an SEO and writer having an experience of more than 3 years in these respective fields. He likes to spend his time researching on various subjects.