With the help of this measurement and the right technology, organisations may better understand the dynamics of their sales process, which will help them make more informed decisions that will ultimately result in higher income.
ValueWorks provides this analysis out-of-the-box, with only little effort to integrate the CRM like Salesforce or Hubspot.
Settling on a Sales Velocity
The Four Foundational Elements of Sales Velocity
A deal’s value is #2
The average deal value is the typical amount of revenue generated by each closed contract. Assuming all other variables remain constant, the sales velocity increases with deal size. Upselling or cross-selling to current clients is a successful way to raise deal value.
Conversion Rate: #3
The percentage of leads that become customers is referred to as the conversion rate. Sales velocity can be considerably increased by high conversion rates. However, a poor conversion rate points to inefficiencies in the sales procedure and may highlight the need for improved lead quality or sales training.
#4. Sales Cycle Length
The average amount of time it takes for a lead to convert into a customer is known as the sales cycle duration. The higher the sales velocity, the shorter the sales cycle. It’s critical to locate and remove any bottlenecks in your sales process if you want to shorten the length of your sales cycle.
Interpretation and communication of sales velocity
The graphical representation shows in an easy to grasp way how the funnel changes over time, showing new opportunities, moved opportunities, won opportunities and lost opportunities. In a successful company, there should be a lot of new opportunities, moved opportunities and won opportunities, while, obviously, you want to minimize lost opportunities.
The new opportunity rate indicates how much of the existing funnel are new opportunities, resulting in the equation: new opportunity rate = New opportunities / all opportunities. The win rate is calculated taking the won opportunities and dividing these by all the closed opportunities (which are basically all lost and won opportunities).
Influence of Sales Velocity
- Efficiency: Rapid and successful lead-to-customer conversion implies an efficient sales process when there is a high sales velocity.
- Forecasting: Accurate revenue estimates are made possible by sales velocity.
- Strategy Modification: Using this indicator, you may pinpoint where in your sales process there are gaps and where improvements are needed.
Increasing Sales Velocity: Success Strategies
- More Opportunities: Enhance your lead generation plan by improving your marketing strategy or by utilising solutions like CRM software to more efficiently find and track leads. Increase the Deal Value: Upselling and cross-selling to current clients can help you raise the average deal value dramatically.
- Increasing conversion rates: Make sure that your marketing and sales efforts are coordinated, give your sales personnel useful tools, and improve their abilities through training.
- Cut the Sales Cycle Off: To shorten the sales cycle, automate duties whenever you can, optimise the sales procedure, and stay in constant contact with prospects.