How to Accelerate Sales in a Short Period of Time
Sales are often the measure of success for most businesses. The faster you can convert your leads into paying customers, the more successful your business will become. But have you ever considered if your sales process is efficient?
It’s not uncommon for businesses to hyper-prioritize sales above everything else. And while sales are important, your company needs an efficient sales process that leaves room for profit and growth.
So, how do you measure the success of your sales department?
Sales velocity is one metric that many businesses use to calculate the efficiency and profitability of their sales departments.
Most businesses focus on acquiring more opportunities and less time on trying to maximize the return from those opportunities.
But this creates a problem.
Spending too much time filling the sales pipeline may mean that you can spend less on improving the deals you already have in place. Winning new clients is great, but keep existing ones happy and decreasing the length of your sales cycle is just as important.
The outcomes of the sales velocity equation indicate the overall effectiveness of the sales team, which areas you can work on to improve sales productivity, and the health of your business.
This post will show you the real meaning of sales velocity, how to calculate it with a simple formula, and use it to increase your revenue.
What is Sales Velocity?
Sales velocity is a metric you can use to measure how fast leads and opportunities convert into sales, month-over-month.
When you think of velocity, the first thing that comes to mind might be “miles-per-hour,” while sales velocity indicates “revenue-per-month.”
Measuring the sales velocity is one of the most important strategies to check how quickly your business is making money, and which levers you need to pull to accelerate the speed.
Four Sales Velocity Variables to Know
Why is Sales Velocity Important
Sales velocity is an essential factor to consider in your business for it to grow and prosper. If a prospect moves through your pipeline in less time, you close deals faster. A higher sales velocity means you’ll gain more sales in less time.
Monitoring sales velocity lets you evaluate your business’ sales velocity against other companies, compare the effectiveness of single reps, and reflect how adjustments to the sales process and management affect your business.
Having clear knowledge about sales velocity can help you have more accurate predictions and find out how you can optimize your sales process for faster sales and higher conversion rates at each stage of the consumer buying process.
Sales Velocity Best Practices
- If the results of your sales velocity tell you that you need to boost your sales effectiveness, you have to work more to increase your number of leads, average deal value, and conversion rate.
- You should allow your sales metrics enough time to reach statistical significance. Analyzing a small sample of data may not provide you with accurate results. We recommend calculating your sales velocity each quarter, half-year, or annually. This extended sample timeline accounts for variables such as unusually long deal or the seasonality.
- Keep your definitions and variables consistent while measuring sales velocity. For instance, when do you consider a prospect to be a quality opportunity? Is it when you opt-in at a specific stage in your sales funnel? Does it begin when they fill out a particular form? Or is it only when they book a demo? Identify these criteria as early as possible and stay consistent when measuring sales velocity.
How Do You Calculate Sales Velocity?
You may be wondering, how do I calculate my businesses’ sales velocity accurately?
You should first separate small, mid-market, and enterprise pipelines. Your company probably has their nuanced definition of what comprises each of these segments, and you need to split them up accordingly.
Once you have separated your market segments, calculate the sales velocity for each one with this equation:
Sales Velocity= Number of Leads (#) x Average Deal Size ($) x Conversion Rate (%) / Length of Sales Cycle
Try it out in the calculator below!
Sales Velocity Calculator
(leads per month)
(average deal size)
(win rate in decimals)
(cycle time in months)
How Can I Improve Sales Velocity?
1. Boost the number of leads or sales opportunities
Remember only to prioritize the leads that are the right fit for your solution. Filling up the funnel is a responsibility for both marketing and sales, but how you manage qualified prospects is up to you. It means you should:
- Create and execute business development plans
- Profile and analyze your consumer’s organization to find the areas of highest mutual value
- Manage and support customers effectively, thereby locking out the competition
- Use eLearning to boost selling while you learn and apply new concepts on-the-job
- Use intelligent studies and reporting tools to help you locate areas that have missed or underexploited opportunities
- Leverage strategic tools and partners to improve the efficiency of your sales department
2. Increase your average deal size
Driving up your average deal size can be a bit tricky. Some of the limitations will be the outcome of deliberate choices that your agency has made like pricing structure and product mix. Other challenges include soft skills such as developing relationships with the decision-makers. It’s essential to know how to connect price to value and if you want to execute that, then you should:
- Divide your customers to focus more on high-value business opportunities
- Leverage and boost marketing and partner resources to update your coverage and route to market
- Create clear strategies, objectives, and actions across your entire account team to improve collaboration and visibility
- Plan key initiatives and all vital success elements to widen your range of solution
- Enhance your understanding of customer business challenges so you won’t have to leave extra solutions and money on the table
3. Optimize your conversion/win rate
It’s a common misunderstanding in sales that most deals are lost to the competitors. But most deals are lost to the status quo. If you want your deals to be successful, you need to:
- Adopt the right relationship techniques
- Encourage salespeople to follow a proven process to manage the sale
- Uncover the relationship map and align your solutions to the main stakeholders
4. Decrease the length of your sales cycle
You should not treat all deals equally. Larger deals generally take longer to close. Larger enterprises have more requirements and processes, from procurement to security reviews. While smaller firms and less established companies can and do want to move fast. That’s why it’s crucial to determine which segment the prospect belongs to so we can identify the pace at which we sell to them.
Here are a few techniques to speed up your time to seal the deal:
- Align your selling process to your consumers’ buying process
- Use sales processes and playbooks built into the daily workflow for immediate guidance
- Remove administrative overhead from your sales team as much as possible
- Develop an objective and consistent qualification framework to pinpoint real opportunities
What Strategies Can Help Improve Sales Velocity?
There are a few techniques you can use to improve your pipeline input.
- Start with more leads. Most of the sales opportunities start as a lead. To gather more quality leads, you should focus on your process for contacting and qualifying them.
- Optimize your lead outreach. If you have a significant decrease between your leads and opportunities, then make sure to optimize your way of contacting and reaching out to those leads.
- Establish a prospecting machine to convert leads into opportunities effectively. Make use of automated tools to reach out automatically to a list of qualified prospects and shake loose the real opportunities in the group. Instead of doing it manually, technology will help you do it at scale and with much higher efficiency.