What is sales velocity?

Working in marketing department, employees want smooth flow of leads. Sellers want prospects to convert easily; conversion brings revenue, and companies earn profit. The whole process takes time, but organizations want quick results. Smooth operations with immediate results are motto of every sales department. Sellers desire high lead generation and conversion rates; the requirement is to speed up the process. Organizations require tools to measure speed of the process to improve it.

Sales velocity is measure that organization require; it shows the performance of marketing department and sellers. Time is money; organizations want to capitalize on each second. Lead generation starts when consumer show interest in the business; afterwards, prospecting starts, which takes time. Organizations want this process to be quick; fast means less cost. Cost reduction eventually results in increased profits. Profit growth is main objective of any business worldwide. Below you will learn about selling velocity and how it is measured.

Sales Velocity

A unit of measure businesses utilizes to analyze performance of different departments. Organizations measure the speed of buyer journey, which starts from lead generation and ends by closing the deal. Sales velocity measures how fast consumers move through each step and finally purchase products. A very beneficial measure for businesses that focus on revenue growth, the focus shifts from quality to quantity while utilizing this measure. Measuring velocity plays huge role in future prediction.

The sales department is responsible for buyers' journey; sellers initiate communication and bring a buyer to the final stage. Conversion happens at the seller's hand, so velocity measure eventually analyzes the seller's performance. Methodologies utilized for prospecting and persuasion are also analyzed by measuring velocity. Companies can predict future deals and the performance of employees. Revenue generation and the number of conversions are easily predicted through velocity measurement. Budgeting becomes easy when companies can predict future events.

Pipeline Velocity Vs Sales Velocity

Different names for the same concept, pipeline or funnel velocity, measure consumers' speed through pipeline. Business owners measure buyer moment through pipeline to learn about seller's performance. The performance of methodologies utilized for prospecting and conversion is also analyzed through pipeline velocity. High velocity means methodologies work perfectly; in case of low-velocity sales department reconsiders prospecting methods.

So, these different names are for the same concept, and different companies worldwide use different names. Some companies call it pipeline velocity, and some call it to funnel velocity. The name doesn't concern business; only results do. Organizations try to keep sales funnel velocity high because high velocity means more clients. A high number of clients results in high revenue and better profits. So, the focus should be on results of the measure.

Pipeline Velocity Formula

Pipeline Velocity Formula

Formula for measuring pipeline velocity is simple; however, sellers must be aware of variables being utilized. For measuring velocity, sellers must track each buyer's journey; data collection is essential while measuring pipeline velocity. Formula for measuring velocity is as follows:

Sales Funnel Velocity = (Total Opportunities x Deal’s Size x Success Rate) / Cycle LengthV = (TO + D + SR) / L

  1. Funnel Velocity = V

  2. Total Opportunities = TO

  3. Deal’s Size = D

  4. Success Rate = S

  5. RCycle Length = L

Understand each component before measuring funnel velocity. Learn about each component of formula and use it for measurement of velocity. Below you will find details regarding each :

Total Opportunities

Several prospects in a sales cycle are called total opportunities. By prospects, it means qualified leads that have high conversion chances. Keeping velocity measures accurate, total opportunities should be accurately measured. Only add qualified leads; unqualified leads have low chances of conversion. Sellers waste time on unqualified leads. Using a high-quality buyer persona while qualifying leads, Total opportunities would decrease, improving the velocity measure. Unambiguous measures of total opportunities would impact sellers' whole prospecting methodology and performance.

What is Sales?

Deal's Size

Name states the meaning, deal's size is the measure of deal's value. Average value of deal is calculated to measure sales velocity. Calculating average deal sizes is simply adding total revenue collected during a cycle and dividing it by a total number of deals. Average deal size provides a measure of quality of each deal. Velocity measure is a quantity measure but adding deal's size adds a quality factor to velocity measurement. High average deal value means high-quality deals.

Success Rate

No matter quality of prospecting method, all prospective customers don't convert. A huge amount slips away during buyer's journey. Success rate measures the total number of conversions. Calculating success rate before velocity measure is essential. Divide total number of sales by total opportunities, and you get success rate. Success rate is different from conversion rate because successful deals are divided by total number of leads in conversion rate. High-quality buyer persona could improve success, prospects with high conversion chances easily purchase, and success rate improves eventually.

Cycle Length

Sales cycle length is amount of time a lead takes to convert. Duration between successful interaction and a successful deal is the cycle length. Organization desire to keep it as short as possible. Sellers are responsible for moving customers through each step of pipeline. Sellers could move to next prospect after they are through first one. Short cycle allows sellers to quickly move to next client. Short cycle improves number of interactions; win rate improves by keeping cycle short.

How to Calculate Pipeline Velocity?

Sellers have responsibility for helping prospects through sales funnel. Measuring velocity wastes hours; sellers could make those hours productive by prospecting. Manual methods of measuring velocity aren't productive anymore. Companies must use online tools for measuring pipeline velocity. Customer relationship management tools (CRMs) allow companies to measure velocity without wasting sellers' time.

By calculating the daily velocity benefits companies, sellers could improve performance based on daily results. The performance of each improvised strategy could be analyzed daily. CRMs provide a detailed report, connecting all dots. Organization could learn their weak spots and work to improve sales funnel velocity.

By calculating the daily velocity benefits companies, sellers could improve performance based on daily results. The performance of each improvised strategy could be analyzed daily. CRMs provide a detailed report, connecting all dots. Organization could learn their weak spots and work to improve sales funnel velocity.

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Importance of Measuring Sales Velocity

In businesses, especially in marketing, there is always room for improvement. Organizations could improve by analyzing their performance. Companies with growing revenue also need to work on their policies and strategies to improve growth. Companies growing steadily often don't focus on small problems; through time, small problems become big hurdles. Business flop when small problems are ignored. Companies, no matter their success rate, should learn about their weaknesses to keep themselves from imploding.

Sales velocity is a measure that allows organization to track performance. Businesses could learn about buyers' journeys and sellers' performances through velocity measurement. Not all prospects become clients, so it helps organizations learn why many people leave midway. They also find faults in the method of persuasion. Calculating this variable helps businesses avoid any big losses in long run because churning is inevitable and reduced clients could impact businesses in long run.

How to Improve?

Several components make up sales funnel velocity, so improving those components could impact velocity positively. Employees should focus on each component and check number and quality of opportunities. Improving the deal's value could help organizations grow exponentially. High success rate reduces cost per deal, improving the velocity along revenue. Reducing sales cycle directly impacts the success rate, so all components should be focused on improving the velocity.

Below you will find detailed tricks to improve growth; sales representatives are responsible for company's growth. By following the strategies below, you could easily boost growth:

Improve Opportunities

Understanding opportunities is essential for improving; all leads aren't opportunities. Leads are number of people that show interest in company or company's product. Leads are qualified after analyzing their details. Leads are filtered against ideal customer profiles to filter out prospects with higher chances of becoming customers. The filtered amount of people with high chances of becoming buyers are called opportunities. Along with quantity of opportunities, quality should also be improved to increase the sales velocity. Spending a little extra time qualifying leads could increase the chances of success.

Raise Deal Value

One method of raising deal value is by increasing the price of product. Increasing prices could reduce the demand. Law of demand states that an increase in price decreases the demand. Using pricing methods could eventually impact negatively. Sales department can boost deal value, but they must invest in research. Learn what client desire, and search for opportunities that might purchase products in bundles. Focus more on consumers that could purchase products in bundles; this strategy could help boost the deal value. However, don't lose the smaller ones while focusing on bigger clients.

Better Success Rate

High number of sales is the dream of every corporation. Corporations want a high number of deals so they can earn better profits. If your velocity is low, boosting your success rate could help increase it. Try understanding why leads leave midway. Find the problem with prospecting method and fix it. Communication methods or product proposals might be the reason for people leaving in between. Try making product proposal simpler. Proposal conveys the actual message, change timing of proposal to see if it impacts success rate positively. Keep experimenting because, in selling, you cannot be sure.

Reduce Cycle Length

A cycle completes when buyer closes the deal and rep moves toward a new opportunity. Reducing cycle could boost the sales funnel velocity. The less time an employee spends on a person, the more time they would have for others. Reducing cycle is essential while working to better the business growth. Spending more time on a person increases cost, return on investment decreases, profit of the company shrinks. So, decreasing time spent to persuade people could be a successful strategy for better results in future. Reduce cycle by using better strategies to persuade clients, answer their concerns, and use discounts and other offers to close the deal.

CRM Integration

Intergrade CRM to boost your sales velocity. Customer relationship management tools are online tools that help businesses automate their workings. Online tools allow automation which is need of time. Automation could boost velocity by providing actual measure; CRM automatically collects data from different channels and provide results. It gives detailed results illuminating every fault and every problem a corporation might have. So, utilizing a CRM could be great help towards growth.


This article gives you all information about sales velocity and what you should use for your business. Article also has a method to calculate this variable and the components important for its calculation. Newbies in market could learn a lot by following this article. They could learn how to calculate velocity and boost it through successful strategies. Read the whole article to learn important tips and tricks.

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