March 20, 2024
July 5, 2024

Sales Velocity: How to Generate More Pipeline in Less Time

What is Sales Velocity?

Sales velocity is a metric that measures how fast sales opportunities move through the sales funnel to closed-won deals by tracking the rate at which revenue is generated over time.

It refers specifically to the speed or rate at which deals progress, rather than the total sales volume or amount closed.

Sales velocity is an important metric because it shows how rapidly your business is acquiring new customers and growing revenue.

A higher velocity means you are winning deals and recognizing revenue faster, which accelerates overall business growth. It demonstrates that your sales process is working effectively to drive results.

On the other hand, lower sales velocity indicates inefficiencies in your sales process that are preventing you from closing deals quickly.

Understanding and optimizing sales velocity is key for any growth-oriented business.

And tracking it over time provides visibility into the health and productivity of your sales pipeline.

Why Sales Velocity Matters

Sales velocity shows how quickly your sales team is able to move opportunities through the pipeline and convert them to closed-won deals.

The speed at which deals progress through each stage of the funnel from prospect to customer indicates the overall health and productivity of the sales process.

Higher velocity means more deals reaching the closed-won stage faster. This accelerated speed results in faster revenue realization and business growth.

Slower velocity, on the other hand, signals inefficiencies or bottlenecks impeding the sales process. Understanding sales velocity identifies problem areas to address.

Plus, sales velocity allows more accurate sales forecasting and goal setting. With insight into the typical pace at which the sales team closes deals, leadership can establish attainable quotas and model predictable revenue results.

Fluctuations in velocity metrics can serve as leading indicators of when forecasts and quotas may need to be adjusted.

Monitoring and improving sales velocity gives a real-time pulse on sales performance.

It shows if the sales engine is firing on all cylinders or needs a tune-up to accelerate opportunities through the funnel. With sales velocity high on the radar, sales leaders can continuously refine processes to enhance sales productivity.

How to Calculate Sales Velocity

When you measure sales velocity, it helps you understand the speed at which your business is acquiring new customers and how much revenue you can expect deals already in play.

It can also help you keep a finger on the pulse of your average deal value.

Here are the key things to know:

  • It's calculated using this simple sales velocity formula:

Sales Velocity = Total Closed Won Revenue for Period / Number of Days in Period

This gives you the average revenue accrued per day or week.

  • For example, if you closed $300,000 in total revenue over a 90 day period, your sales velocity would be calculated as:

$300,000 total revenue / 90 days = $3,333 average revenue per day

  • Higher velocity indicates you are winning deals and recognizing revenue faster. This accelerates overall business growth.
  • AI-powered tools like Copy workflows can automatically track key data like closed revenue, sales cycle times, and win rates. This makes it easy to monitor sales velocity over time to spot trends.

Interpreting and Benchmarking Sales Velocity

To correctly interpret your company's sales velocity, it's important to contextualize the number and have points of comparison.

Here are some best practices:

  • Understand what's normal for your business: Consider factors like average sales cycle length, deal sizes, seasonal trends, the mix of new vs expansion business. This gives context to understand if your velocity is aligned with expectations. For example, enterprise deals over $1M may naturally have lower velocity than $10k SaaS subscriptions.
  • Use historical averages and ratios: Compare your current sales velocity to your averages over the past year, quarters, or months. Calculate the ratio vs your targets or quotas. Watching trends over time, not just the latest number, helps identify when velocity is unusually high or low.
  • Leverage industry benchmarks: While every company is different, comparing your sales velocity to generalized industry standards can provide an external perspective. For SaaS, a velocity around $100k-$500k per sales rep per year is often considered good. For hardware or equipment sales, velocities of $2M-$3M+ per rep may be more typical.
  • Analyze across segments: Break down velocity by product line, sales region, customer tier. This highlights where you're performing well or lagging. For example, a new product launch may initially have lower velocity.
  • Link velocity to conversion metrics: Velocity will improve as you convert more leads to opportunities, opportunities to deals closed. Evaluating changes in conversion rates along the funnel provides context on velocity.

With proper framing, your sales velocity within business context, using internal and external comparisons, and tying velocity to broader funnel metrics, you gain maximum insight into sales performance.

This allows appropriate responses to fluctuating velocity trends and will greatly help your go-to-market efforts.

Strategies to Improve Sales Velocity

1. Shorten Sales Cycle Length

One of the most effective ways to improve sales velocity is by shortening the length of your sales cycle. This refers to the amount of time it takes to move a lead through the entire sales funnel, from initial contact to closed-won deal. The shorter your sales cycle, the faster deals will progress and revenue will increase.

Here are some key strategies for reducing sales cycle length:

  • Nurture leads more effectively. Providing valuable content that educates prospects can help build trust and affinity for your brand. This makes prospects more receptive when your sales reps reach out. Automated nurture campaigns that deliver helpful content over time can accelerate this process.
  • Identify buyer needs faster. Conducting thorough discovery calls and meetings early on gives insight into the prospect's pain points and desired outcomes. Understanding their goals enables you to tailor messaging and solutions to resonate better.
  • Speed up follow-ups and proposals. Slow response times after initial conversations cause deals to stagnate. Prioritize prompt follow-ups and quickly turn around custom proposals. Workflows can help automate reminders and draft generation for faster turnarounds.
  • Remove roadblocks in your sales process. Analyze where deals tend to get stuck and put in place solutions. This may involve adding steps like legal reviews or technical assessments earlier on to avoid delays down the line.
  • Equip reps to have more effective conversations. Provide training, content and tools to help reps have meaningful dialogues that uncover needs quickly. This also builds rapport and keeps things moving.

Shortening the sales cycle by even a few days can significantly impact velocity over time.

Monitor your cycle time metrics along with your average customer lifetime value, and continually refine your processes to accelerate the number of opportunities through the funnel.

Leveraging automation makes this sustainable at scale.

For more, check out this helpful post on Outbound Automation.

2. Increase Win Rates

One key strategy for boosting sales velocity is to increase your team's win rates. This refers to the percentage of opportunities that successfully close as won deals out of all opportunities that make it to the final stage.

There are several ways to improve win rates:

  • Better lead qualification: Make sure you have defined criteria to identify and prioritize leads that are more likely to convert to customers. Score and rank incoming leads, and focus sales efforts on those with the highest potential.
  • Articulate value clearly: Craft targeted messaging that resonates with leads and emphasizes how your solution solves their unique problems or needs. Use case studies, ROI calculators, and custom content to showcase the value.
  • Handle objections with content: Anticipate and prepare for common objections prospects may have. Provide content like FAQs, thought leadership, and competitive comparisons to address concerns head-on.
  • Expand stakeholder buy-in: Identify all decision makers and influencers early on. Nurture each contact and get broader buy-in across the buying committee.
  • Improve sales skills: Coach reps on consultation selling skills to uncover needs, convey value, and handle objections. Practice common scenarios to improve win rates.

Increasing win rates takes a cross-functional effort between marketing, sales, and customer success. With the GTM right strategy, you can convert more of your hard-won opportunities into closed-won deals.

This directly translates into higher sales velocity and accelerated revenue growth.

3. Grow Average Deal Size

One of the most effective ways to increase sales velocity is to grow the average size of your deals. There are two key strategies for accomplishing this:

  • Upsell additional products: Once a deal is progressing, look for opportunities to expand the sale by promoting add-ons, premium features, or complementary products. The easier you make it for customers to purchase more from you in a single transaction, the higher your average deal values will climb. Think through what other offerings align with the core products they are buying already. Prepare packaged bundles or one-click upsell prompts to encourage broader purchases.
  • Expand to a wider buyer group: Look beyond just the primary buyer to identify other decision-makers or influencers you can bring into the deal. The more budget you can access from an account, the larger the potential deal size. Research all stakeholders involved in purchases like theirs and make sure they are included in your prospecting and sales conversations. Get them excited about the additional benefits for their department or team.

Growing average deal sizes this way boosts sales velocity substantially without necessarily requiring more closed deals.

Plus, larger initial purchases often lead to higher lifetime values and expanded accounts over time.

4. Expand Funnel Capacity

Expanding the capacity of your sales funnel by generating more leads and opportunities is crucial for increasing sales velocity. The broader the top of your funnel, the more deals can work their way through to closed-won each period.

Here are some strategies for expanding capacity:

  • Conduct targeted lead generation campaigns. Focus your lead gen efforts on high-potential accounts and prospects that closely fit your ideal customer profile. Use multiple tactics from cold outreach to digital ads to generate interest and capture leads.
  • Tap into new lead sources. Identify additional lead channels like tradeshows, referrals, content syndication, and new marketing channels to expand the funnel's input. Bring in more raw leads from multiple sources.
  • Optimize website conversion. Ensure your website and landing pages are effectively capturing contacts and converting visitors into leads through strong calls-to-action, valuable content offers, and frictionless submission forms.
  • Prioritize high-potential deals. Once you've widened the funnel, have sales focus their efforts on opportunities with the highest potential to close quickly. Avoid spreading reps too thin across low-quality leads.
  • Use tech to scale efforts. Look to AI-powered tools like Copy workflows to automate lead capturing, scoring, nurturing and routing so your team can handle increased volume efficiently.

Expanding the top of your sales funnel gives you more opportunities to progress through the pipeline, increasing overall sales velocity. Focus on high-quality prospects and leverage automation to convert and advance them efficiently.

5. Enable Sales Reps

A key strategy for improving sales velocity is to enable sales reps with the right tools, content, and training so they can act quickly to progress and close deals.

This empowers reps to be more efficient in moving opportunities through the pipeline.

Some ways to enable sales reps include:

  • Equip with sales tech stack: Provide reps with a sales tech stack including a CRM, email automation, and other tools to streamline workflows. This gives them capabilities like tracking customer interactions, automating follow-ups, and accessing data to segment and prioritize leads.
  • Supply qualifying and prospecting tools: Tools that quickly surface potential customer pain points through surveys or that automate finding and engaging new prospects can help reps move leads into and through the pipeline faster.
  • Deliver messaging and content libraries: Arm reps with approved messaging, email templates, presentations, collateral, and other content assets so they can quickly craft customer communications tailored to the situation.
  • Offer sales methodology training: Educate reps on your proven sales process and methodology to execute on best practices that move deals ahead predictably. Roleplaying common scenarios also helps put training into practice.
  • Provide ongoing coaching and feedback: Sales managers should regularly review metrics, observe rep interactions, and offer specific coaching to reinforce what’s working well and improve areas for development. This fine-tunes rep skills and activity.

Equipping sales reps to progress opportunities, address objections, and close deals confidently ultimately translates into higher sales velocity.

The time reps gain from proper enablement means more time spent selling.

For more information, check out this post on building AI-driven sales coaches.

Measuring and Tracking Sales Velocity

Accurately measuring and monitoring sales velocity is crucial for optimizing it over time. Here are key ways to track velocity:

  • Using reports and analytics: Your CRM and sales analytics tools likely offer standard reports on velocity. These provide visibility into current velocity and trends over time. Dashboards that track key funnel metrics can also shed light on what's impacting velocity.
  • Setting up alerts and notifications: Configure your CRM and analytics systems to send email or mobile alerts when velocity crosses certain thresholds. This allows you to immediately see and address any drops or spikes.
  • Regularly reviewing metrics: Discuss velocity metrics as a standing agenda item in weekly revenue review meetings. Continually refine processes based on the insights.
  • Leveraging AI for real-time visibility: AI-powered solutions like Copy can provide real-time visibility into velocity fluctuations. This enables you to gain insights and take action much quicker than waiting for reports. With AI, you don't just see what impacted past velocity; you can instantly see what's impacting velocity right now across every deal.

Let's look at each in a bit more detail.

1. Use Reports and Analytics

To measure and track sales velocity effectively, leverage data visualization, analytics, and reporting tools.

Most CRM and sales platforms provide dashboard views to monitor key metrics.

Set up customized reports and charts to gain visibility into trends and patterns in your sales velocity over time.

Some specific ways to utilize analytics for sales velocity include:

  • Sales velocity dashboard - Create a dedicated dashboard in your CRM that shows weekly or monthly sales velocity totals. Include comparisons to quotas or past averages to benchmark performance.
  • Win/loss report - Build a report that analyzes the average length of sales cycle times for won deals vs. lost deals. Longer cycle times on losses may indicate problems in the sales process.
  • Lead source analysis - Determine which lead sources produce the highest velocity. Direct traffic and referrals may convert faster than cold outbound leads.
  • Visualize trends - Use line charts or bar graphs to spot upward or downward movement in sales velocity week-over-week or month-over-month.
  • Sales projections - Given accurate historical sales velocity data, you can better predict future revenue based on the sales pipeline.
  • Manage thresholds - Set up alerts that notify the sales team if velocity metrics fall above or below ideal thresholds for your business.

This enables data-driven decisions to optimize processes and improve sales performance over time.

2. Set Up Alerts

Setting up alerts and notifications based on your sales velocity metrics can help you stay on top of changes and react quickly. You can configure alerts that will notify you via email or Slack if your velocity rises above or falls below certain thresholds.

For example, you may want to be alerted if:

  • Daily sales velocity drops below $20,000 for more than 3 days in a row. This could indicate problems closing deals.
  • Weekly sales velocity is more than 20% above your forecast. You may need to validate if the extra velocity is sustainable.
  • Monthly sales velocity is below the low end of your quota range. Time to re-evaluate your goals.
  • Sales velocity on key products or services decreases 30% quarter over quarter. Those areas may need attention.

Configure customized alerts around the velocity metrics you track to gain visibility into fluctuations. Setting alert thresholds just above and below your typical range will inform you of any significant changes. With this insight, you can investigate the root cause and respond appropriately.

3. Regularly Review Metrics

To keep sales velocity top of mind, it should be regularly reviewed in key meetings and processes. Some best practices include:

  • Discuss in weekly revenue review meetings: Add sales velocity as a standing agenda item in weekly revenue review meetings with sales leaders. Analyze trends, identify any issues slowing velocity, and brainstorm ways to improve. These working sessions allow continuous refinement of processes.
  • Continuously improve processes: Use velocity metrics to pinpoint friction points in the sales workflow. Look for ways to streamline, automate, or optimize processes to accelerate velocity. For example, long lead follow-up times can be improved with AI-powered lead engagement workflows.
  • Involve reps in troubleshooting: Reps on the frontlines often have valuable insights into solving velocity challenges. Engage salespeople directly to understand obstacles and workshop better ways forward.
  • Review alongside other metrics: Consider velocity trends alongside conversion rates, win rates, cycle times and other key performance indicators. The interplay between metrics tells a deeper story.

Regular velocity reviews ensure sales leadership keeps a pulse on performance. By continually monitoring and improving, teams can unlock faster growth.

4. Leverage AI for Visibility into Sales Velocity

AI and automation can provide unmatched visibility into sales velocity fluctuations in real-time.

Rather than waiting for periodic reports, AI-powered revenue operations platforms track key metrics like closed revenue, cycle times, and win rates continuously. This enables sales teams to see changes in velocity as they occur and respond much quicker.

For example, if an increase in sales cycle length starts slowing velocity, automated alerts can notify managers immediately.

Action can then be taken to address the bottleneck through better lead nurturing or refining qualification criteria. If velocity declines because win rates drop, AI tools can pinpoint where proposals are stalling and provide coaching to improve closings.

Advanced AI takes this a step further by automatically surfacing insights that explain changes in velocity and recommend ways to improve it.

Instead of just alerting that velocity decreased, AI can determine what specifically caused the change based on all available data.

This level of real-time visibility and actionable recommendations are only possible with AI, enabling sales teams to continually fine-tune processes for optimal velocity.

How to Use AI to Increase Sales Velocity

Here are specific use cases that demonstrate how workflows help companies achieve sales velocity:

Lead qualification and prioritization

Workflows assist in efficiently qualifying and prioritizing leads based on their potential.

By implementing lead scoring workflows, companies assign values to leads based on criteria such as demographic data, engagement levels, and fit with the ideal customer profile.

This helps prioritize leads with the highest potential, ensuring that sales reps focus their efforts on those with the greatest likelihood of generating revenue.

Start by using this workflow to enrich prospects by their email addresss (and here's another if you only have their LinkedIn URL).

Opportunity management and progression

Workflows guide sales reps through the sales pipeline, providing a structured process for advancing opportunities.

Workflows can include automated reminders, task assignments, and alerts to keep opportunities moving forward.

This streamlines the sales process, reduces manual effort, and ensures that deals are not stalled or overlooked. Effective opportunity management workflows contribute to increased sales velocity.

Try out this workflow to extract MEDDIC from sales calls.

Automated follow-ups and nurturing

Workflows automate follow-up and nurturing activities to maintain engagement with prospects and customers.

For example, a workflow can be designed to automatically send personalized emails or messages at specific intervals, based on prospect behavior and stage in the sales cycle.

This consistent and timely communication keeps prospects informed and nurtures the relationship, increasing the chances of closing deals faster.

Automated follow-ups ensure that leads are not forgotten or neglected, contributing to improved sales velocity.

Try this workflow to create personalized cold emails and timely follow-ups

Sales performance tracking and coaching

Workflows assist in tracking and coaching sales reps for better performance.

Workflows can generate reports that measure sales velocity equations, deal value, and other relevant metrics.

This allows sales leaders to identify strengths and areas for improvement, provide targeted coaching, and guide reps toward more effective selling strategies. Enhanced sales performance, enabled by workflows, directly impacts sales velocity.

In short, workflows help companies achieve sales velocity by enabling effective lead qualification, guiding opportunity management, facilitating accurate sales forecasting, automating follow-ups, and supporting sales performance tracking and coaching.

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