Sales velocity is a metric that shows the speed at which you convert leads into clients. Calculating it will reveal the performance of your pipeline, sales team, and the health of your business in general.

In this article, we’ll unveil the importance of this measurement and explain how to calculate your sales velocity and increase it.

Watch the video where Dan Martell shares a strategy that will help you boost your sales velocity.

## Why is it important to track sales velocity?

This measurement is one of the A-list metrics each business should monitor. It shows how fast you manage to move your prospects through the pipeline. The higher your sales velocity rate, the more deals your team closes during an accounting period.

It is quantified as a monetary value. For example, the sales velocity of your team consisting of 5 reps is \$5000 per month. You can measure the productivity of every sales rep and compare the performance of your teams from different regions or countries. This way you’ll get to know who brings more money to your business. Finally, you can take measures to motivate, educate, reward, or fire colleagues.

Besides, this measurement allows you to identify the stages at which your leads drop out and never convert. This will help you analyze your pipeline and lead nurturing strategy and optimize them accordingly.

Now let’s move on to calculating your sales velocity.

## How to Calculate Sales Velocity

The formula you need to measure this metric is below.

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

As you see, there are four essential values you should know to calculate your sales velocity. Let’s take a closer look at each factor influencing this measurement.

1. The number of opportunities. You should have a clear picture of the number of leads you can close a deal with in your pipeline. You can divide them by country, region, store, sales rep, etc. Remember that this number includes only qualified leads. It means that these people are the decision-makers, have financial opportunities, and do need your product. According to Sales Insights Lab, 50% of leads aren’t a good fit for your company. Don’t try to collect as many contacts for your database as you can — they won’t bring you any revenue. Instead, focus your efforts on people whose problems you can solve.
2. Average deal size. It shows how much money your company receives after an average sale. To calculate it, divide the total revenue from all deals by the number of deals. If you are a SaaS company or work on a subscription-based model, you can rely on your customer lifetime value. Keep in mind your customer acquisition cost because if the total revenue doesn’t cover the costs of attracting new clients, you won’t profit.
3. Win rate or conversion rate. It shows the percentage of leads that you’ve converted into clients. To calculate this measurement, divide the number of closed deals by the number of interactions. If you want to know the percentage, multiply by 100. For example, if you had 500 leads at the beginning and 150 bought from you, then your conversion rate is 25%. This metric will help you evaluate your sales strategy performance. You’ll be able to discover the weak points where you lose leads and make the necessary changes.
4. Sales cycle length. This value shows how much time you need to convert a lead into a customer. Sales cycle length depends on your product price, complexity, and the number of stages a prospect should go through to close a deal with your brand. Usually, B2B clients need much more time to make a purchasing decision.

Now, when you are aware of the factors that influence your sales velocity, you know which direction to choose to improve this metric. Below we’ll share some practical tips each brand should consider.

## How to Increase Sales Velocity

2. Qualify and score leads
3. Automate nurturing leads
4. Build trustful relationships with your customers
5. Educate your sales reps

In this section, we’ll provide some best practices to fine-tune each factor mentioned above to boost your sales velocity.

1. Re-consider your lead generation strategy. This step should be the first point of your investigation. Pay special attention to customer acquisition channels. You should analyze your most profitable opportunities to capture leads. They can include social media platforms, retargeting, influencer marketing, chatbots, etc. To improve your lead generation, provide them with special offers relevant at each stage of the sales funnel, make use of lead magnets, and simplify your site navigation.
3. Automate nurturing leads. To save time for nurturing each lead, we recommend that you put this process on autopilot. Collaborate with your customer support and sales teams to identify prospects’ frequently asked questions, stages at which they get stuck, and common issues that postpone the purchase. After that, you can create a series of educational lead nurturing emails to be sent automatically right after a lead joins your mailing list and performs a certain action. With SendPulse Automation 360, you can do just that for free.
5. Educate your sales reps. Monitor how they treat each lead. Make sure your reps know how to present your company, handle objections, and win over customers. This way, you’ll get to know your strong and weak points and be able to assess your selling techniques. Let your team attend conferences, workshops, and seminars to improve their skills. Motivate your colleagues and reward top performers.

Congrats, now you know the factors that influence your sales velocity and how to improve it. Register with SendPulse to enhance communication with leads via emails, SMS, web push notifications, and chatbots.

## References

1. In this article, you’ll learn more about the factors influencing your sales velocity, get some tips to boost it.
2. In this article, you’ll find an example of calculating sales velocity.
3. Here you’ll get to know how discounts affect sales velocity.