Sales Velocity
A 10% improvement in sales velocity compounds to 46% more revenue over a year without adding headcount.
💡TL;DR
Sales velocity measures how fast you generate revenue: (Opportunities × Win Rate × Deal Size) / Cycle Time. For SMBs, it's the compound metric—improving any variable improves velocity. The leverage is usually in cycle time (reducing delays) and win rate (better qualification), not just more pipeline. Track velocity monthly; a declining trend signals a problem before quota miss shows up.
Definition
A metric measuring how quickly deals move through the pipeline and generate revenue, calculated as: (Number of Opportunities × Win Rate × Average Deal Size) / Sales Cycle Length.
🏢What This Means for SMB Teams
Sales velocity is the compound metric. Improving any variable (opportunities, win rate, deal size, cycle time) improves revenue. Start by reducing cycle time - it's often the easiest lever.
📋Practical Example
A B2B company calculated sales velocity: (50 opps × 20% win × $15K) / 45 days = $3,333/day. They focused on cycle time, implementing auto follow-ups after proposal (reduced from 7 days to 2 days wait) and faster legal review (pre-approved contract templates). Cycle time dropped to 38 days. New velocity: $3,947/day—18% improvement without more pipeline.
🔧Implementation Steps
- 1
Calculate baseline: (Opportunities × Win Rate × Avg Deal) / Cycle Days = Daily Velocity
- 2
Identify constraint: Which variable is most underperforming vs. benchmark?
- 3
Target one variable: Improve by 10-20% in 90 days
- 4
Implement changes: Automation for cycle time, qualification for win rate, pricing for deal size
- 5
Measure monthly: Track velocity trend, not just absolute number
❓Frequently Asked Questions
Which velocity variable should we focus on first?
Usually cycle time—it's often the easiest to improve with automation and process changes. Win rate requires training and qualification improvements. Deal size requires pricing/packaging changes. Pipeline requires marketing investment.
How often should we measure sales velocity?
Monthly. Weekly is too noisy (deal timing varies), quarterly is too slow (you'll miss trends). Look for 3+ month trends before making major changes—single month variations are normal.
⚡How Optifai Uses This
Calculates and displays sales velocity with breakdown by variable. AI identifies which lever will most improve velocity based on current performance.
Revenue Analytics📚References
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Related Terms
Pipeline Management
The process of tracking and managing sales opportunities as they move through stages, including forecasting, prioritization, and identifying at-risk deals.
Pipeline Coverage
The ratio of total pipeline value to sales quota, indicating whether there are enough opportunities to meet revenue targets given historical conversion rates.
Sales Funnel
A visual representation of the customer journey from initial awareness through purchase, divided into stages (typically: Awareness, Interest, Decision, Action) that help sales teams track and optimize conversion at each step.
Revenue Operations (RevOps)
The alignment of marketing, sales, and customer success operations to drive efficient, predictable revenue growth through shared data, processes, and goals.
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