In the sales world, there are several metrics that are monitored on a regular basis. These metrics can help companies make important decisions about their outreach strategy and other sales efforts. Sales velocity is something that companies need to track. It’s also something that just about every organization can stand to improve, but you first have to understand it.
In this guide, we’ll look at exactly what sales velocity is and how you can track yours to make improvements as you go along. And speaking of improvements, we’ll also offer tips and insights on how you can improve your sales velocity, and how using Smith.ai for outreach campaigns can help.
Let’s dive in.
Sales velocity refers to how quickly leads move through the sales pipeline and create revenue for your business. This is calculated using four metrics:
Using these factors, organizations can figure out what their velocity is and how much revenue they can expect over a period of time. The velocity can also reflect how healthy the business is, how effective the sales team is, and where improvements can be made to impact goals positively.
This is important to understand and take advantage of because no or low velocity means that your sales pipeline is slow-moving or even stagnant, and that’s not effective.
The first step to take is to segment your pipelines into small, mid-market, and enterprise groups. Then, you will be able to create a velocity equation for each one. The equation to calculate sales velocity is:
Opportunities x Deal Value x Win Rate / Length of Sales Cycle
The number of opportunities refers to the people or leads in your pipeline that are qualified and waiting for someone to reach out. It’s important to have good opportunities so that you’re not clogging the sales funnel with bad leads and wasting time on uninterested prospects.
Your deal value is the average size of each deal or transaction. Depending on your business and the products or services you offer, this number could be quite different. A real estate company could have a deal value of $500,000, for example, while a simple eCommerce store could have a deal value of just $250.
Win rate is a metric that refers to how many of the opportunities you’ve had that you have turned into conversions. If you have 50 opportunities and make five sales, that’s a 10% win rate, for example.
Length of sales cycle refers to how long the entire process takes from finding a lead to converting them, including every touchpoint throughout the funnel along the way. You need to streamline the process and create a shorter sales cycle for increased conversions and faster closing.
The basic idea is simple: you want maximum velocity for your sales pipeline. To do that, you’ll need to make some adjustments and tweaks to the way that you’re currently doing things. For starters, you’ll want to find ways to be more effective in your sales and utilize the information that you have to make smart decisions. Here are some useful tips.
When you see the sales velocity results for yourself, you may notice that there’s an opportunity to increase effectiveness and ensure that sales practices are on the right path. It’s important to take into account how quickly the process goes (or how quickly people want it to go) so that you can meet their needs.
If you have more opportunities, there’s a good chance that you’re going to have more leads that convert. This isn’t about just getting more, though. It’s about choosing high-quality, targeted leads that are going to get better results. You should take advantage of tools like paid advertising through Google and LinkedIn, as well as other lead generation efforts.
It’s better to have a clean pipeline and get rid of leads that aren’t going anywhere so that you can focus on the ones that are.
When you are using higher quality leads, you’ll also be able to improve your conversion rates (or win rates). Nurture the leads that have already shown intent to buy. Make sure that you involve decision makers, define next steps, and get rid of any leads that have serious obstacles or roadblocks preventing their movement.
You don’t want to force products or services on your audience. You want to make sure that you have the solutions that they need. Uncover additional pain points and find out what you can do to get more value in each deal. Instead of converting on one service, get a package deal. If they want to buy three items, try adding a fourth that’s relevant and useful.
The best way to improve outbound sales velocity is to make sure that your sales cycle is as short and succinct as possible. Automate repetitive tasks, set outreach goals, be clear and transparent, and make it easy for your prospects to sign contracts or convert from anywhere. Find ways to improve your sales pipeline so that your leads can move through more smoothly and spend less time trying to find their way around.
Thanks to the host of available tools today, you can find plenty of resources to help you track the results of your outreach improvements. That way, you can see if your changes were effective, make additional tweaks, and course-correct big misses in real time so that you don’t lose valuable opportunities.
At Smith.ai, we know you have a lot to do. That’s why we work hard to help you with things like lead generation and intake, starting with our team of dedicated virtual receptionists. We can provide you with a 24/7 answering service so you never miss a lead, while including assistance for lead intake and appointment scheduling. Plus, we can help you create and launch outreach campaigns, too.