MoData Blog
Stay informed with our latest news and tutorials

Sales Velocity – The Most Important Sales Metric You May Not Be Tracking

July 26th, 2017

Author

Content Team

Categories

Sales Forecasting

Words

3900

Estimated Time

16 Min

The single most important sales metric for sales managers is the velocity of conversion through the funnel stages.”

– Jaime Muirhead, VP of Sales, RingLead

Speed is essential in the B2B world. This makes sales velocity an important metric to measure. However,most businesses ignore it. In this article, we’ll cover what sales velocity is, why you should care, and why it’s often overlooked.

What is sales velocity?

Sales velocity is the measurement of how swiftly deals get closed. A higher number is better. It is calculated with the following metrics:

  • Number of leads;
  • Conversion rate;
  • Average deal size;
  • Average number of days to close;

Use the formula below in order to calculate your sales velocity:

The sales metric Average Sales Cycle Length is the amount of time from your first touch with a prospect to closing the dea

I propose doing something similar, which should be simple enough, but doing it a bit more aesthetically pleasing. The formula can’t change, but the way it’s presented – can. You can use the same color scheme as the site and the same font, giving it a sense of branding. (this note is not counted towards the word total of the article)

Why is sales velocity important?

Wasting time is detrimental to the process. Thanks to sales velocity, you can measure how efficient you are. This makes it one of the most important metrics out there. A high sales velocity means your business is generating profits faster. Low velocity means something is wrong along the sales pipeline. You should find out what it is and fix it.

Why is sales velocity generally overlooked?

Sales velocity is easy to calculate, but it’s difficult to improve. You need to get into the details and seep through lots of data before you can get any answers. Of course, this process doesn’t need to be that complicated – there are big data companies (you can link to your product here) who handle this specific task on a daily basis.

Why is sales velocity more important than other metrics?

Sales velocity allows you to increase your profits by changing a few habits in the sales cycle. It’s a matter of gathering the right data and fine-tuning the process. Very few metrics can make the same claim without being full of it.

To put things into perspective, increasing your conversion rate by 10% and decreasing the average number of days to close by 10% gives you a 21% increase in your sales velocity. This is changing only two metrics in the sales pipeline. There are moreoptions explored in this article on KiteDesk.

Conclusion

  1. Sales Velocity encompasses multiple metrics in a simple easy to follow number.
  2. Tracking Sales Velocity, allows for easier communication across your sales team since its so much easier for busy sales reps to follow a single number than 5 different metrics that constitute Sales Velocity.
  3. It allows for easy comparison of sales team performance across months, quarters and years.
  4. Most importantly, its discourages myopic focus on any single sales metric like revenue, opportunity conversion rate or size of deal.

For a sales organization to be successful it needs to fire on “all cylinders” and tracking Sales Velocity as a metrics ensures exactly that.

Go Back
Latest Blog
September 19th, 2018

As sales begin and you start seeing some consistent revenue coming in, there are certain metrics that are essential to begin the process of scaling....

Read More
Sales Pipeline
September 17th, 2018

  Successful companies rely on structured sales processes It’s no secret that companies that execute a well structured sales process see enormous benefits in scalable...

Read More
Optimize your sales process
September 12th, 2018

A sales cycle differs depending on the company, service or product: no sales cycle is exactly the same as another. However, the each one does...

Read More
e-book for free
FREE E-BOOK !
Is Closing a Real Problem in Account Based Selling?

If you want your sales team to get the right results, you need to solve problems that delay or curb your sales goal and conversion. But do you know what the real problems in your sales process are? Download your free eBook, which includes a list of questions, to help you identify them.

Ready to move your sales to the next level ?
Request your demo now.
Mo-Data's AI-powered sales intelligence software provides you with actionable insights, predictions and prescriptions to help you grow revenue, faster.