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“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.
Sales velocity is the measurement of how swiftly deals get closed. A higher number is better. It is calculated with the following metrics:
Use the formula below in order to calculate your sales velocity:
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)
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.
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.
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.
For a sales organization to be successful it needs to fire on “all cylinders” and tracking Sales Velocity as a metrics ensures exactly that.
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