sales strategy

Sales velocity: Why it matters & 4 tips to increase it

Mihaela Cicvaric
LAST UPDATED
April 26, 2024
READING TIME
7 min.

In any race, you typically track your progress by beating your time marks.

In business, you can also track how fast you make money.

This business stopwatch is called "sales velocity."

Just as you'd want to reach the finish line first, businesses aim for higher sales velocity to earn cash quickly.

Find out why sales velocity matters, how to calculate it, and how you can increase it for your business growth.

What is sales velocity, and why does it matter?

Sales velocity indicates how rapidly a business makes sales, aka how quickly they earn money.

If you understand how fast your business is running (or, in this case, selling), you can make better decisions, such as how to speed up or where to invest more resources.

How to calculate sales velocity

Imagine you're selling software.

To determine how fast you're selling app seats (aka your sales velocity), consider these four pillars:

1. Opportunities

How many people are interested in buying your software?

This isn't about everyone you meet but the ones genuinely considering a purchase.

2. Average deal size

When someone buys a plan, how much do they usually spend?

This number increases if they often buy more than one seat or pick the pricier plan.

3. Win rate

Out of 10 people showing interest, how many buy?

If 6 out of 10 purchase, your win rate is 60%.

4. Sales cycle duration

From the moment someone eyes your app to the point they buy it, how long does it typically take?

With these elements, sales velocity is calculated as:

(Number of Opportunities x Average Deal Size x Win Rate) ÷ Sales Cycle Duration

An example of calculating sales velocity

For example, if your

- Opportunities are 120 people
- Average deal size is $25
- Win rate is 50% or 0.50
- Sales cycle duration is 5 days

You would calculate your sales velocity as (120 x $25 x 0.50) ÷ 5 = $300 per day

The result? You're raking in $300 daily from your app sales.

4 tips to increase your sales velocity

To boost your sales velocity, you have to increase:

  • Average deal size

Work on pushing lifetime deals or annual subscriptions rather than simply going for the smaller products.

  • The number of opportunities

Qualify your leads effectively. If you’re targeting every single lead in sight, chances are you’re reducing your opportunities rather than increasing them, as your name will be associated with spam by all those people whom your product is not suited for.

By crafting your buyer persona and targeting only qualified leads, you’ll increase your opportunities.

  • Conversion rate

In order to increase your conversion rate, you need to put in the work with your potential customers.

Make sure communication is clear and respectful and that you’re addressing your lead’s pain points accurately.

Another strategy you can implement to increase your conversion rate is a reward or incentive program, where your lead will see there’s something more for them. Think about a referral program, for example.

.. and shorten:

  • Sales cycle length‍

Use sales automation to take time away from time-consuming tasks like outreach, follow-ups, etc.

Additionally, make sure you periodically check your sales funnels to spot any points of friction or any bottlenecks that may be slowing your sales cycle down. Asses how every step is working and make the necessary adjustments, whether this may be investing in automation tools, eliminating unnecessary steps, etc.

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Key takeaways

✅ Sales velocity doesn't just measure sales but the rate at which they occur. Speed is the game-changer.

✅ Opportunities, average deal size, win rate, and sales cycle duration are the driving factors. Understand them, and you master your sales velocity.

✅ Knowing your sales velocity isn't enough. Constantly aim to improve it - check out this 45-min pure value video & revolutionize your outreach!

So, next time you assess your sales performance, don't just count the dollars. Measure how swiftly they come in and double down on things that speed up the process!

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Standout feature
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4.9
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$75/mo
$2,999/mo
Large, distributed sales teams
AI evaluation precision, gamified KPIs
Lack of tracking system
4.6
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Not publicly available
Sales operations and finance teams
Powerful configurability
Limited training resources and complex to navigate
4.4
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Mid-market and enterprise businesses
Comprehensive incentive management
Potentially high cost and steep learning curve
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$40/user/mo
Enterprise: custom price
Complex sales structures and businesses of all sizes
Complex sales structures and businesses of all sizes
Steep learning curve
4.6
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Not publicly available
Collaborative teams
Connected planning
Complexity and steep learning curve
4.6
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Not publicly available
Companies with complex sales structures
Complex incentive compensation management (ICM) with high efficiency and accuracy
Complexity for smaller teams and potentially high costs
4.7
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Not publicly available
Companies who want to automate commission calculations and payouts
Simplicity and ease of use
Lack of features like redirection
4.7
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$30/user/mo
$35/user/mo
Custom: upon request
Businesses that need a comprehensive and user-friendly sales compensation management software
Ease of use and adoption
Lack of ability to configure the product based on user needs
4.8
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Not publicly available
Companies with modern sales culture and businesses who want real-time insights
A built-in dispute management and real-time visibility
Users say it works slowly, customer support is slow
4.9
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star
star
$30/user/mo
$50/user/mo
Smaller sales teams
Powerful automation
Lesser user base and average user interface
4.7
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star
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star-half
Not publicly available
Companies with scalable needs
Automated Commission Calculations
Lack of filtering by date, no mobile app
ERP vs. CRM
ERP
CRM
Summary
Backbone of a business's internal operations.
Backbone of customer-centric interactions and operations.
Goal
To centralize and streamline core business processes in a company.
To increase customer experience, satisfaction and loyalty, and boost sales.
Focus
Internal operations and processes across departments (finance, accounting, inventory, supply chain, HR, and sales).
All interactions with leads and customers.
Manages
Internal business data like financial data, inventory levels, production details, supply chain, HR info.
All customer data like contact info, purchase history, communication history, customer preferences and more.
Users
Finance, accounting, operations, supply chain, and HR departments.
Customer-facing teams like sales, marketing, and customer service.
Benefits
Streamlines operations, improves data accuracy, enhances decision-making, boosts collaboration, increases productivity.
Improves customer relationships, increases sales, strengthens customer service, personalizes marketing campaigns, provides insights.
Price
$150 per user per year on average.
$10 to $30 per user per month on average.
PRM Tool
Rating
Feature
Pro
Con
Mobile App
Integrations
Free Plan
Pricing
4.65
star
star
star
star
star-half
Org-wide alignment
User-friendly layout and database
Suboptimal as a personal CRM
square-check
Lack of tracking system
square-check
Team: $20/month
Business: $45/month
4.7
star
star
star
star
star-half
Social Media Integration
Easy contact data collection
No marketing/sales features
square-check
Lack of tracking system
square-xmark
7-day trial
$12/month
4.75
star
star
star
star
star-half
Block Functions
High customization capability
Not a dedicated CRM
square-check
Limited
square-check
Plus: €7.50/month
Business: €14/month
N/A
Open-source
Open-source flexibility
Requires extensive manual input
square-xmark
Limited
square-check
Self-hosted
$9/month or
$90/year
3.1
star
star
star
Simple iOS app
Ideal for non-tech-savvy users
iPhone only
square-check
iOS only
Limited
square-xmark
1-month trial
$1.49/month or
$14.99/month
3.6
star
star
star
star-half
Smart Contact Management
Feature-rich and flexible
Reported bugs
square-check
Rich
square-xmark
7-day trial
Premium: $13.99/month
Teams: $17.99/month
4.4
star
star
star
star
star-half
Customizable Interface
Customizable for teamwork
Pricey for personal use
square-check
Rich
square-xmark
Standard: $24/member
Premium: $39/member
4.7
star
star
star
star
star-half
Integrated Calling
Integrated Calling
Too sales-oriented & pricey
square-check
Rich
square-xmark
14-day trial
Startup: $59/user/month
Professional: $329/user/month
4.8
star
star
star
star
star
Business Card Scanning
Business Card Scanning
Mobile only
square-check
Limited
square-check
$9.99/month
4.45
star
star
star
star
star-half
160+ app integrations
Comprehensive integrations
No free app version
square-check
Rich
square-xmark
14-day trial
$29.90/month or
$24.90/month (billed annually)
Capterra Rating
Free Trial
Free Plan
Starting Price (excluding the free plan)
Maximum Price (for the most expensive plan)
Best for
4.5
star
star
star
star
star-half
square-check
14-day
square-check
€15/month/seat billed annually
€792/month/3 seats billed annually + €45/month for each extra seat
Versatility and free plan
4.2
star
star
star
star
square-check
30-day
square-xmark
But it offers reduced price to authorised nonprofit organisations
€25/user/month
€500/user/month billed annually (includes Einstein AI)
Best overall operational CRM
4.3
star
star
star
star
star-half
square-xmark
square-check
Limited to 3 users
Comprehensive incentive management
€52/user/month billed annually
Small-medium businesses and automation
4.5
star
star
star
star
star-half
square-check
14-day
square-xmark
€14/seat/month billed annually
€99/seat/month billed annually
Sales teams and ease of use
4.1
star
star
star
star
square-xmark
square-check
Limited 10 users
$9.99/user/month billed annually
$64.99/user/month billed annually
Free plan for very small teams up to 10
CRM goal
Increase the sales conversion rate for qualified leads from marketing automation campaigns by 10% in the next 6 months.
SMART Breakdown
1. Specific: It targets a specific area (conversion rate) for a defined segment (qualified leads from marketing automation).
2. Measurable: The desired increase (10%) is a clear metric, and the timeframe (6 months) allows for progress tracking.
3. Achievable: A 10% increase is possible based on historical data and potential improvements.
4. Relevant: Boosting sales from marketing efforts aligns with overall business objectives.
5. Time-bound: The 6-month timeframe creates urgency and a clear target date.
Actions
Step 1: Refine lead qualification criteria to ensure high-quality leads are nurtured through marketing automation.
Step 2: Personalize marketing automation campaigns based on lead demographics, interests, and behavior.
Step 3: Develop targeted landing pages with clear calls to action for qualified leads.
Step 4: Implement lead scoring to prioritize high-potential leads for sales follow-up.
Step 5: Track and analyze campaign performance to identify areas for optimization.
Outcomes
Increased sales and revenue
Improved marketing automation ROI
Marketing and sales alignment
Data-driven marketing optimization

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