How to measure and accelerate and sales velocity

Sales velocity is an important metric for companies that want to drive sustainable growth. It provides insight into a company’s financial health and serves as a roadmap for enhancing sales effectiveness and revenue acceleration.

Whether you are a small startup or enterprise business, understanding and optimising your sales velocity is the difference between stagnation and growth.

In this post, we will discuss sales velocity, the factors that affect sales velocity and tips for increasing your sales velocity.

What is Sales Velocity?

Sales velocity is a measurement of how quickly prospects move down the pipeline and turn to paying customers. It calculates how much revenue your business can generate in a given time.

It is a powerful metric that provides visibility into a company’s financial health and sales effectiveness.

A high sales velocity indicates the following:

• Efficient sales operation
• Healthy pipeline management
• Strong market fit

By monitoring and analysing your sales velocity, you can gain valuable insights to optimise your sales process, improve lead generation, and accelerate your revenue growth.

How to Calculate Sales Velocity

It is important to note that the ideal sales velocity for small, mid-market and enterprise deals will vary. It is important to segment each of these deals and calculate their velocity separately 

Here is the formula for calculating sales velocity:

Sales velocity = Number of opportunities x Deal value x Win rate /Length of the sales cycle

4 Factors that Makeup Sales Velocity

These factors are to be considered when setting goals for your sales team 

1. Number of opportunities:

A larger number of opportunities increases the chances of closing deals and increasing revenue. 

It also enables you to gain a clearer view of the potential of your sales team so you can accurately forecast sales and identify areas of improvement.

However, it is important to ensure the leads in your pipeline are qualified leads. You can also use the Sandler or MEDDIC qualification method to weed out unqualified leads

Having a large number of opportunities in your pipeline means that you have to scale your sales team's efforts to ensure that they are properly nurtured.

Hubforce enables you 2x your sales team's efforts by creating personalised digital sales rooms for each prospect. This enables you to centralise all sales materials and track prospect engagement in real-time.

This insight enables your sales team to apply targeted follow-up strategies that provide value to prospective customers at every stage of the buying journey. This ensures that you design a buying journey that aligns with their goals. 

2. Conversion rate

This is also called “win rate” It is the percentage of lead opportunities that convert to paying customers.

The formula for the conversion rate is:

 Conversion rate = Total number of won deals/total number of qualified opportunities.

The conversion rate reflects your sales team's ability to guide leads to become paying customers. A high conversion rate indicates that your team is highly effective in moving deals through the sales funnel. With a higher percentage of leads converting at each stage, deals progress through the pipeline quickly. This reduces the overall sales cycle length, leading to faster revenue generation

How to optimise your conversion rate:
 

• Align your marketing and sales teams with ideal customer profiles. 
• Enable your sales reps to address customer needs and objections promptly. This helps nurture leads and guide them towards conversion.
• Provide your sales team with the necessary tools and training to effectively convert leads. This includes sales methodologies, product knowledge, CRMs and digital sales rooms

3. Average Sales Cycle Length

This is the average number of days it takes your sales team to convert a lead into a paying customer.

Here is the formula for the average sales cycle length

Average sales cycle length = Total sale cycle period/number of deals won in that period

Closing deals faster enables your sales reps to free up time to focus on nurturing new leads. This potentially increases the number of deals they can handle over time.

How to Shorten Sales Cycle and Boost Velocity

• Eliminate unnecessary steps or delays within your sales funnel. This could involve automating tasks, improving communication, or empowering reps to make quicker decisions.
• Equip your sales team with the necessary tools and training to effectively move leads through the funnel.

4. Average Deal Size

The average deal size is calculated with this formula:

Average deal size = Total revenue from closed deals/number of deals closed.

• It helps you measure your sales team's effectiveness in closing certain deal sizes. 
• Knowing your average deal size helps you allocate resources efficiently. For example, you might invest more time and resources into nurturing leads with the potential for larger deals.
• It allows you to make informed forecasts about future sales based on historical data and the current sales pipeline.

Why Should You Optimise Sales Velocity?

• A higher sales velocity shows that deals are closing faster and revenue is accelerated.
• Optimising sales velocity enables you to identify and eliminate roadblocks in your sales funnel. This leads to a more efficient sales team. 
• Optimising your sales process for velocity enables you to allocate resources more effectively. Your sales reps will spend less time on unqualified leads AND focus on nurturing high-potential opportunities. For example, businesses use Hubforce to get real-time visibility into prospects' engagement with sales materials. This informs sales reps on the right follow-up strategy and also the right time to follow up with high-potential deals.

If sales reps notice little or no engagement on the sales materials, it could be a potential red flag.

• Tracking your sales velocity gives you valuable insights into your sales pipeline potential. This enables more accurate sales forecasting, enabling you to make informed business decisions and manage resources effectively.

• Monitoring sales velocity enables you to see the effectiveness of your sales strategies. You can identify areas for improvement and make data-driven adjustments to optimise your approach for maximum impact.

How to Accelerate Sales Velocity 

1. Generate more opportunities: 

When you create more opportunities and increase your pipeline with qualified leads, it is only normal that your sales velocity will increase. 

How to generate more opportunities

• Boost lead generation: Identify your ideal customers' channels and focus your efforts there.
• Qualify leads better: Make sure your marketing and sales teams are aligned on what makes a qualified lead. This will ensure that your sales reps are spending their time on the leads most likely to convert.
• Try new markets: Consider if there are new customer segments you could be targeting.
• Follow up promptly

2.Increase average deal value

How to increase the average deal value

• Upselling and Cross-selling

Identify upselling and cross-selling opportunities: Train your sales reps to identify opportunities to offer additional products or services that complement the customer's initial purchase. This could involve suggesting higher-tier plans, add-on features, or complementary products. When upselling or cross-selling, focus on the additional value the customer will receive by purchasing the additional product or service. 

Hubforce enables your sales team to get real-time visibility into the customer's behaviour and buying journey. This enables your sales team to spot upselling signals and present upselling opportunities at the right time.

• Target High-Value Customers:

Focus your sales efforts on leads with a bigger budget to spend. Invest time in building strong relationships with key decision-makers at larger companies. These relationships can lead to bigger deals.

• Optimising Pricing and Sales Strategies:

Implement tiered pricing structures that offer discounts for larger purchases. This can encourage customers to buy more. Focus on pricing your products and services based on the value they deliver to the customer.

• Customer success: 

Every buyer has different goals. Using a one-size-fits-all onboarding process for every buyer is the quickest way for them to churn. However, you have to design the onboarding process in an efficient way that allows your onboarding and support team to remain efficient while providing a white-glove experience for each customer. 

This is why the Hubforce onboarding room is popular among our customers. It enables you to provide onboarding experiences that are tailored to the customer’s goals without the need to scale your onboarding and support teams. 

You can monitor customers' activities in real-time and also identify upsell opportunities which could also increase customer lifetime value

3. Boost win rate

According to Gartner, 77% of buyers reported a complex buying process.

This means that any business that makes it easier for prospects to buy will be at a competitive advantage.

Leverage buyer enablement tools like Hubforce to empower your buyers with content and materials to help them easily understand your value proposition and make the right decision. Instead of sending scattered PDFs and links to prospects, you can centralise all your sales content in a digital sales room and track the real-time engagement of prospects
 

4. Reduce sales cycle length

• Identify and eliminate bottlenecks in your sales process that are slowing deals down:The average sales rep spends 30% of their time preparing, sending and updating documents and presentations. You can automate this process with Hubforce so that your sales reps can focus on more revenue-generating tasks.

• Understand prospect decision-making process: Clearly define the decision-making process for customers. Knowing who needs to be involved and what approvals are required can help avoid delays in closing deals.
• Use Mutual Action Plans: Establish clear expectations and action plans after meetings or proposals. This keeps the momentum going and prevents deals from stalling.

How to Increase Sales Velocity with Hubforce

Hubforce enables a shorter sales cycle length by enabling you to provide a personalised buying experience for each buyer.

Instead of sending so many links and PDFs through email, It enables you to centralise all sales materials in a personalised environment.

This enables decision-makers to look at the right content at the right time. Hubforce also enables you to track prospects' engagement with sales content in real-time.

This means you can keep up with what matters to each decision-maker and follow up in a timely and targeted manner.

Accelerate your sales pipeline by creating 5 Hubforce digital sales rooms for free or sign up for a demo