
So, here we will discuss what is sales velocity? Sales velocity measures the rate at which potential customers enter your pipeline, complete transactions and generate income. A higher sales velocity indicates that prospective clients progress quickly through your sales cycle and seal deals more swiftly and successfully.
Sales velocity (also referred to as pipeline or tunnel velocity; these terms are all equivalent). Tracking sales metrics velocity is essential as it indicates the health of your pipeline and how long it should take prospects to progress from the lead stage through the funnel and close in order to project future sales strategies based on what opportunities currently exist in your business.
Your company will perform better as its pipeline velocity increases. With high Velocity, sales funnel teams may spend less time closing lower-value deals; by increasing it, they reduce the effort needed to increase revenue growth. Tracking sales forecasting velocity over time after making strategic adjustments is also vitally important.
How To Increase Sales Velocity
Now that you understand how to calculate sales velocity, let's use some strategies to increase it. Increased Velocity enables your group to produce more income in less time; here are four effective techniques.
Increase The Total Number Of Opportunities
Increase sales velocity easily by expanding current opportunity generation efforts. Make more cold calls if they prove beneficial; or expand email marketing operations if email proves effective for you.
Note, though: Please keep this in mind:
- Accumulating more leads won't guarantee more opportunities to arise.
- Due to your sales efforts representatives spending too much time disqualifying prospects who should be out of your pipeline in the first place, low-quality leads may inadvertently reduce sales goals/revenue goals velocity.
- Focus on producing qualified leads from reliable sources; prioritize quality over quantity when developing lead generation strategies.
- Implementing your process for converting marketing-qualified leads (MQLs) to sales-qualified leads (SQLs) ASAP would prove the most productive.
- Take an assessment of your lead qualification process and adjust as necessary in response to an increased pipeline entry.
- Be certain that your sales representatives can effectively manage an ever-increasing volume of opportunities as their presence expands.
- We flow can be of immense assistance in keeping sales representatives committed to your sales methodology while automating some of the more time-consuming aspects of sales processes. With features like note templates, it offers exceptional support.
- By increasing productivity within your team, you create plenty of room for future opportunities to emerge.
Improve Your Win Rate
Consider methods to boost your win percentage; your sales velocity will rise as more of your leads turn into actual customer service relationships.
Following these recommendations can help increase your closing rates:
- Find Out Your Buying Committee in Its Totality. On the buyer's end, who is involved with this transaction? An unwilling party could pose an objection that can prevent an agreement from proceeding smoothly - be aware of who the decision-makers and stakeholders are before starting negotiations.
- As soon as possible, attempt to engage the decision-maker. Gatekeepers in sales are ever present; by engaging early with decision-makers, you may quickly determine if any potential deals can proceed more rapidly.
- Step-by-step sales processes require clarity at every step. Prospects (along with their sales representative) need to remain aware of what comes next so as to prevent deals from expiring prematurely.
- Offer ongoing guidance and instruction. Investing in your sales team's skill set is a wise investment that ensures they're ready for success. Ensure your representatives are equipped for success!
- Prioritize deals using intelligent, powerful tools. Too many deals fall through the cracks and end up dead; to prevent that from happening again, use marketing tools like Webflow that allow your representatives to understand deal signals and risk factors to help keep deals alive and prevent deals from falling through.
Increase The Average Deal Size
Reps should allow themselves more time when managing closing deals that involve larger sums and focus on using value-driven negotiations before trying to speed things along.
Your entire team's negotiation power increases if they focus on providing real customer journey value rather than listing total costs as their primary selling points. Can they save time or money, or can you assist in earning them additional funds? Such selling points make more persuasive presentations to seal larger closed-won deals with greater ease.
Upselling and cross-selling are among the easiest ways to increase average deal size, so your representatives should be taught to recommend additional products or services when applicable. Upselling should certainly be seen as something other than your sole strategy to raise average deal sizes, though; other approaches exist as well.
Though this topic was already addressed in Part 1, qualifying your real-time bad leads remains essential in this instance. Consider eliminating customers who are extremely cost-conscious or motivated by discounts when qualifying them as your leads; more reliable high-quality leads tend to invest more readily in larger problem solutions than their more cost-conscious counterparts.
Be careful in approaching discounts carefully. Studies suggest that offering substantial discounts could have an adverse impact on average customer lifetime value and increase churn if customers must renew at regular price or make additional purchases at full price.
Shorten The Sales Cycle
Finally, to speed the progression of prospects through your funnel more rapidly by shortening average sales cycles, efficiency becomes key - software can play an invaluable role here by decreasing time spent performing repetitive duties by representatives.
DocuSign and Dropbox Sign are excellent e-signature programs that can greatly expedite contract signing. A faster contract signing experience is a welcome relief to anyone waiting hours upon hours for an ideal customer profile to print, sign, scan and return an affix of paper!
Calendly provides essential scheduling applications for sales department people. All parties involved benefit when scheduling calls or demos requires minimal back and forth; you'll increase effectiveness in sales management tools and tactics as a result! As soon as possible in your sales operations process, identify and address objections in order to minimize time-consuming obstacles and ensure successful transactions.
By giving prospects all of the resources necessary for self-educated informed decisions, you can shorten sales performance cycles through smart utilization of content such as case studies, testimonials and even your company website. Keep in mind that buyers today tend to be better educated and independent and prefer having access to the tools necessary to find their answers on their own.
How To Calculate Sales Velocity
As the first step on how to calculate sales velocity for any company, the initial contact info step should involve segmenting its pipelines according to small, mid-market, and enterprise sales approach categories outlined by your firm's exact definitions of each segment - which could prove quite complex and require careful consideration before undertaking this exercise.
Once your market has been divided into segments, calculate the sales velocity equation for each.
Sales Velocity = Number of Opportunities x Deal Value x Win Rate / Length of Sales Cycle
The Four Factors Of Sales Velocity
Sales velocity metrics comprises four key metrics, which should all be tracked in your CRM software (customer relationship management) platform. They include:
- Total Opportunities
- Average Transaction Value.
- Win/Conversion Rate and
- Timelines of the Sales Cycle are critical.
Let's examine these concepts more in-depth and examine their use to test planning and goal-setting processes in your company.
Number of Opportunities: There will always be some percentage of leads in your pipeline that seem promising and should have a real chance at closing; verify if these qualified opportunities qualify as valid prospects to ensure the bottom line remains protected from unqualified leads that won't convert.
Win/Conversion Rate: Your average win rate can be determined by how many quality leads are generated; divide total sales opportunities by total wins in order to calculate it.
Deal Value (average deal size): Time is an invaluable commodity that every deal requires from both parties involved, so make the most of this resource for both of you by offering incentives or extras that improve your life while increasing average deal values and sales automation volumes.
Length of Sales Cycle: One aspect of sales velocity that you should strive not to increase is your average monthly sales cycle length, expressed as months. By streamlining your entire sales process and updating your playbook, as well as hiring additional people for your sales team, you can shorten this figure and close more quality closed deals faster.
Conclusion
For maximum sales success in high-speed sales playbook environments, it is vitally important that you employ only the best sales management software on your team. Such robust software enables sales reps and managers to achieve maximum Velocity by streamlining workflow, optimizing performance, improving collaboration, personalizing customer interactions and scaling operations - in other words, choosing outstanding software will push sales past any barriers of mediocrity and take them on to new heights of achievement instead of remaining stagnant and average.