Sales Velocity

What is a Sales Velocity?

Sales velocity measures how quickly revenue moves through your pipeline. It's the rate at which opportunities convert to closed-won revenue over a specific time period.

Think of it as pipeline speed: How fast do leads become customers? Higher velocity means more revenue in less time with the same resources.

The formula: Sales Velocity = (Number of Opportunities × Deal Value × Win Rate) / Sales Cycle Length

Improving velocity is often the fastest path to revenue growth because it compounds across all deals.

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Why Sales Velocity Matters

Revenue Acceleration:

• Faster pipeline = faster revenue
• More deals closed per period
• Shorter time to impact

Resource Efficiency:

• Same resources generate more revenue
• Reps work on fewer, faster-closing deals
• Lower customer acquisition cost

Competitive Advantage:

• Faster time to value wins deals
• Respond faster to customer needs
• Outpace competitors in execution

Cash Flow:

• Faster revenue recognition
• Improved working capital
• Better unit economics

Forecast Accuracy:

• Faster cycle = more predictable
• Less time for deals to go stale
• Clearer near-term visibility

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The Sales Velocity Formula

Sales Velocity = (Deals × Value × Win Rate) / Days

Example:

• 100 opportunities in pipeline
• Average deal size: $50,000
• Win rate: 25%
• Sales cycle: 60 days

Velocity = (100 × $50,000 × 0.25) / 60
Velocity = $1,250,000 / 60
Velocity = $20,833 per day

Increase velocity by:

• More opportunities (better prospecting)
• Higher deal size (better pricing/packaging)
• Higher win rate (better selling)
• Shorter cycle (better process)

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Improving Sales Velocity

1. Shorten Sales Cycle

• Remove unnecessary steps
• Improve qualification to avoid bad deals
• Use urgency and timeline pressure
• Streamline approval processes

2. Increase Deal Size

• Focus on higher-value segments
• Bundle products and services
• Improve pricing discipline
• Upsell and cross-sell

3. Improve Win Rate

• Better targeting and qualification
• Stronger sales skills and training
• Competitive positioning
• Better discovery and needs analysis

4. Add More Opportunities

• Increase top-of-funnel activity
• Improve conversion rates
• Expand into new segments
• Better marketing alignment

5. Focus on High-Velocity Segments

• Identify which deals move fastest
• Allocate resources accordingly
• Create specialized playbooks
• Learn from fast-moving deals

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Benchmarks

Sales Velocity by Company Stage:

• Early stage: Slower as processes mature
• Growth stage: Accelerating as best practices emerge
• Mature stage: Optimized for efficiency

Sales Velocity by Deal Size:

• SMB (<$15K): Fast velocity, high volume
• Mid-Market ($15-50K): Medium velocity
• Enterprise (>$50K): Slower velocity, high value

Typical Sales Cycle Length:

• SMB: 14-30 days
• Mid-Market: 30-60 days
• Enterprise: 60-180 days

Velocity Improvement Target:

• 10-20% improvement year-over-year is healthy
• Rapid improvement possible when fixing broken processes
• Diminishing returns as processes mature

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Best Practices

1. Measure Relentlessly
- Track velocity by rep, segment, and channel
- Monitor changes over time
- Identify bottlenecks and friction

2. Fix Bottlenecks
- Find where deals stall
- Streamline those stages
- Remove unnecessary steps
- Automate where possible

3. Qualify Rigorously
- Only work on real opportunities
- Disqualify early and often
- Focus on high-probability deals

4. Create Urgency
- Timeline pressure with prospects
- Limited-time incentives where appropriate
- Clear next steps always

5. Align Compensation
- Reward speed as well as volume
- Incentivize behaviors that increase velocity
- Consider shorter comp periods

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Common Mistakes

• Rushing bad deals - Velocity without quality hurts win rates
• Ignoring deal size - Fast small deals vs. slower big deals
• Process overkill - Too many steps slow everything down
• Poor measurement - Can't improve what you don't track
• One-size-fits-all - Different segments move at different speeds

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Key Takeaways

• Sales velocity measures how fast revenue moves through your pipeline
• Formula: (Deals × Value × Win Rate) / Sales Cycle
• Improving velocity is often the fastest path to revenue growth
• Shorten cycles, increase deal size, improve win rates, add opportunities
• Measure by segment and identify your fastest-moving deals
• Focus on high-velocity segments to maximize efficiency
• Balance speed with quality - don't rush bad deals
• Small velocity improvements compound across all pipeline