Measuring sales velocity is a fundamental aspect of business planning.

Sales velocity helps us forecast, work backwards from our goals, and troubleshoot our process.

Sales velocity helps us forecast, work backwards from our goals, and troubleshoot our process. Click To Tweet

What is Sales Velocity?

Essentially sales velocity is the speed at which leads and opportunities move down and out of your funnel.

Sales velocity can be measured in a few ways:

  • The age in stage before moving to the next stage
  • The total age in all stages, leading to an exit (Closed Won or Closed Lost)
  • The time that passes from an action (i.e. lead assigned) to a reaction (i.e. sales outreach) or a sequence of events (demo, pilot signup, purchase).

Measuring velocity gives you a benchmark you can use to track which parts of your sales and marketing process drive acceleration or put deals at a standstill.

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Measure What Influences Sales Velocity

Velocity can be incredibly variable throughout your business. I prefer to look at velocity in a few different ways, to get a sense of what levers are influencing the speed of your pipeline.

Won, Lost, and Open

Won deals should be your benchmark for velocity. Separating Won, Lost, and Open can help you with pipeline analysis:

  • Have we ever won a deal that’s spent this long in this stage?
  • Do we always lose deals after a certain age in stage?
  • How far over the average can an opportunity be before give it a red flag
  • Can we build an SLA around each stage of our funnel?

One of our customers built a top-of-funnel SLA based on lead velocity. They had never won a deal with a prospect who spent more than 14 days in Pre-Qualified. This insight led to a new process — automatically marking opportunities Closed Lost if the SDR didn’t move the deal to Qualified within 14 days.

This process keeps the SDRs on top of their leads and ensured pipeline coverage was always accurate.

New vs Renewal vs Upsell

New Business, Renewal, and Upsell have completely different timelines. While New Business and Upsell will vary by company, Renewal velocity should be the value of the contract term. If you store the contract term in your CRM, you can build your velocity reports for each type of deal length.

For example, if you primarily have 1-year contracts and start to see average renewal velocity beyond 365 days, this is an early indicator for churn risk with multiple customers delaying their renewal (such as renegotiating their terms or evaluating other vendors).

Market Segments

The same is true for market segments — deal cycles might vary wildly. You could have a 30-day SMB sale and a 90-day SME sale. Deal velocity could also vary by industry, such as healthcare customers taking longer to buy than technology companies.

Digging into the distribution of velocity for these segments can help you understand if you have undiscovered segments in your business model.

Lead Source

Lead source can have a dramatic impact on deal velocity and help you understand if you’re reaching the right buyers. You can explore this in a few ways:

  • How does velocity change by Marketing sourced leads compared to Sales sourced leads?
  • How do specific marketing channels change lead velocity?
  • Does lead velocity change within a channel over time?

Buyer Roles

Buyer roles can impact on deal velocity, and these insights can change your approach to new deals. Here are a few examples:

  • Does engaging a new prospect with the CXO create a faster sale than through a Director-level contact?
  • Do groups of deals have different buying teams?
  • Do specific roles or titles get involved at different stages of these deal?
  • Do these buying teams move through the funnel at different speeds?

This is a great way measure experiments with targeted messaging at each stage of your funnel.

Sales Messaging & Sales Assets

The right Sales messaging motivates buyers through the funnel, the wrong messaging makes them to go cold—velocity helps you determine which effect you’re creating.

So far we’ve looked at stage velocity. Messaging is more tactical, so you may consider activity velocity instead:

  • How long does it take for a cold lead to respond to outbound efforts?
  • After we engage the first contact in an account, how long does it take to engage additional engaged?
  • Do specific messages or assets help move these activities closer together?

At FunnelCake, we’ve found that sending our implementation deck with the proposal helps accelerate deals substantially. This deck provides a workback schedule from a prospects ideal launch date and a list of team members we need involved at each stage. We believe this works by helping the deal feel concrete and guides the buyer to involving more members of their team.

Grow Faster

You can close more deals by increasing headcount, or you can close more deals by giving your reps more capacity. Accelerating deal velocity helps you build capacity in your existing team.

Accelerating deal velocity helps you build capacity in your existing team. Click To Tweet

Deal velocity has compounding returns for everyone on your team, new and existing. That’s effort worth investing in.

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