Sales Velocity Management

Measure and improve sales velocity with our automated sales velocity curve

Importance of Sales Velocity Management

Sales Velocity is a measure of how quickly your deals move through your  sales funnel.   It is the only metric that indicates both the value and time aspects of a deal. 

It is a key performance indicator (KPI) to measure the effectiveness of sales and marketing efforts. It helps you to make informed decisions to improve and align your team’s efforts to achieve your business goals. Sales Velocity formula uses four key metrics to depict the average revenue generated in a day.

So sales velocity formula is defined as –

Sales Velocity = (No. of Opportunities x Avg. Deal Value x Deal Win-Rate) / Length of Sales Cycle in Days


What parameters influence Sales Velocity

Number of Opportunities

Total number of opportunities in the sales funnel is one of the most important variables that determine sales velocity. This should be the top most priority for your sales and marketing teams. They should be channelizing all their efforts to maximize this parameter.

To improve this, your marketing team could use robust lead management practices to identify and assign qualified leads to your sales reps. An effective lead qualification process also enables you to reduce your sales cycle,  increase the average deal size, better deal conversion rates., and eventually generate more revenue leading to higher sales velocity.

Average Deal Size

Average deal size is a very important metric in sales that has a significant impact on your sales velocity management. All efforts should be put in to increase the average deal size. It can be improved in many ways. A better alignment with a client’s long-term objectives offer many more opportunities to increase the deal size.  Your sales reps can make clients realize the true impact and business value  of your offerings. They can identify new cross-sell and up-sell opportunities. They might be able to bundle a few value-added services  to address the client’s requirements in a comprehensive way.

An increase in the average deal size over a period of time will have a very positive impact on the average customer lifetime value (CLV).

Deal Win-Rate

Deal win-rate is also referred to as deal conversion rate. It is the percentage of the number of opportunities won out of the total number of qualified opportunities in your sales funnel.  To improve sales velocity, you must increase the number of deals that you win. This can be achieved in a few ways.

The most effective one is by filling your sales funnel with better qualified leads and opportunites.  Many best-in-class companies use the BANT framework to improve the quality of qualified leads. This helps your sales reps to work on qualified opportunities instead of chasing mirages.

Some of the other important factors include – better coordination between your marketing and sales teams, understanding the needs of your buyer persona well, aligning your sales process with the prospect’s buying process, providing immediate support to your sales reps if they hit any bottlenecks, a good pricing strategy etc.

Length of Sales Cycle

Sales cycle refers to the average number of days spent on an opportunity before it gets converted into a paying client. Sales velocity is inversely proportional to the length of the sale cycle.  So to have a higher sales velocity,  it is imperative that you take all the necessary steps to shorten your sales cycles and expedite deal conversions. We already discussed some of the important ways to achieve this in the above sections relating to effective sales velocity management.

Capabilities & Features

Using Sales CRM from HappSales, you can easily measure and improve sales velocity management features.

Once your team enters the information about their deals with respect to deal value and deal progress, our CRM will use the data points to automatically calculate sales velocity over a period of time. We call this the sales velocity curve.

Analysis of the sales velocity curve will provide you with actionable insights for better control over your business.

Sales Velocity Calculator

You can use the sales velocity calculator to calculate your current sales velocity, and also see how you can use these four levers to influence it – no. of opportunities, average deal size, deal win-rate and sales cycle.

Benefits of using HappSales CRM

Here are some of the benefits of measuring and improving sales diligently through our sales velocity management CRM:

Accurate Sales Forecasting

You can forecast your future sales accurately and know if you are on the right path to meet your goals

Better Sales Performance

You will be able to closely monitor your sales team’s performance, identify areas for improvement, and then give them the required guidance to improve their performance 

Reduce Inventory Cost

You can optimize your inventory levels and reduce your inventory cost due to better visibility into sales trends

Alignment between Sales and Marketing

Sales velocity depends on the quality of leads and the lead qualification process that has a direct impact on your deal conversions and sales cycle. This metric aligns both departments to take the necessary steps to improve these factors.

Manage Sales Pipeline Efficiently

Our Sales CRM will give you visibility into your sales pipeline, weighted pipeline, deal stages, deal value, closure probability, etc. You can closely monitor your sales pipeline and take the necessary steps to manage them better.

Improved Decision Making

Actionable insights will enable you to make informed decisions on marketing, promotions, sales reviews, account mapping strategy, staffing, budgets, etc. to improve business performance.

Identity Trends and Bottlenecks

You will be able to analyze the business trends and identify the bottlenecks early on. You can take the necessary steps and fix the gaps before it is too late. These gaps could be in your sales process, lead qualification, internal approval process, deal nurturing, solution fitment etc.

Drive Accountability

Tracking sales velocity will give you the right data points to hold your teams accountable for their performance.

Improve your sales velocity today to transform your business.

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