Are you tired of analyzing your sales numbers and feeling like you’re not making progress? It’s time to focus on sales velocity – the rate at which your business turns leads into paying customers. In this blog post, we’ll discuss why sales velocity matters and how it can drive significant growth for your business. Understanding customer behavior and optimizing your sales process can help elevate your business.
What is Sales Velocity?
Sales velocity is the rate at which your company sells products or services. It’s a key business metric that can indicate growth and help you decide where to allocate resources.
There are a few different ways to measure sales velocity. The most common is looking at the average number of sales per period, such as per month or year. You can also measure it by looking at the total revenue generated in a certain period divided by the number of days.
Why Does Sales Velocity Matter?
A high sales velocity means your company sells products or services quickly and efficiently. This can lead to increased revenue and profits. A low sales velocity, on the other hand, can indicate that your company is struggling to sell its products or services. This can lead to decreased revenue and profits.
Several factors can impact sales velocities, such as pricing, product quality, marketing, and salesmanship. Improving any of these factors can help increase sales velocity.
Businesses should monitor their sales velocity closely and strive to increase it over time. Doing so can be a major driver of business growth.
What Are the Key Metrics of Sales Velocity?
A number of different factors can impact a business’s sales velocity, such as the type of products or services being sold, the price point of those products or services, the target market for the business, and the selling methods used by the business.
Improving your sales velocity can be a great way to drive growth for your business. You can use several strategies to improve your sales velocity, such as offering discounts or promotions, increasing your marketing efforts, or improving your sales process. If you are a retailer, you can also use trade promotion management software to optimize your promotional strategies and ensure they align with your overall sales process
If you want to grow your business, then improving your sales velocity is a great place to start. By understanding sales velocity and how it can impact your business, you can begin implementing strategies to improve it and drive growth for your company.
How to Calculate Your Sales Velocity
If you’re in sales, you know that your sales velocity is the number of deals you close divided by the amount of time it takes to close them. But what does that number mean for your business?
Your sales velocity can be a helpful metric for understanding your business growth. If you’re closing deals faster, then your business is growing at a healthy pace. If you take longer to close deals, your growth may be slowing down.
➢ Basic Measurement
There are a few different ways to calculate your sales velocity. The most basic method is to take the total number of deals you closed in a period of time and divide it by the total number of days in that period.
For example, you closed 15 deals in March. The sales velocity will be calculated by dividing 15 by 31. This means you’re making around 0.32 deals per day.
➢ Size of Deal
You can also calculate your sales velocity by deal size. To do this, take the total value of the deals you closed in a period of time and divide it by the total number of days in that period.
For example, you closed 15 deals in March worth $120,000. That’d give you a sales velocity of around $3,870 per day.
➢ Type of Customer
You can calculate your sales velocity by customer type. To do this, take the total number of new customers acquired in a period and divide it by the total number of days in that period.
For example, let’s say you acquired 15 new customers in March. That would give you a sales velocity of 15/31, or around 0.48 new customers per day.
➢ Lead Source
You can calculate your sales velocity by lead source. To do this, divide the total number of leads from a specific source by the total number of days in that period.
For example, let’s consider that you received 80 leads from your content marketing campaign in March. That would give you a sales velocity of 80/31, or around 2.58 leads per day from that source.
Once you have the sales velocity from different metrics, you can analyze the speed at which your business is growing and make the required changes to reach your goals efficiently.
Tools for Measuring and Tracking Your Sales Velocity
Sales velocity is one of the most important metrics for any business, yet it’s often overlooked. However, with the help of the right tool, you can keep track of your business’s sales velocity and plan your next move accordingly. Here are a few tools you can use to measure and track your sales velocity, including:
Salesforce: Salesforce is a CRM (customer relationship management) software that gives you visibility into your sales pipeline and performance. It also allows you to track key metrics like conversion rates and average deal size.
Wholesale For WooCommerce: Wholesale for WooCommerce is a wholesale plugin to transform your online store into a wholesale platform and sell in bulk quantity. Also, this tool helps you track all sales so you can measure your sales velocity in no time.
Google Analytics: Google Analytics can be used to track website traffic and conversions. This can be helpful in understanding where your leads are coming from and what type of content resonates with them.
HubSpot Sales: HubSpot Sales is a sales enablement tool that gives insight into your sales process and performance. It includes features like email tracking, lead scoring, and automated follow-ups.
By using these tools to measure and track your sales velocity, you can gain valuable insights into your business growth and identify areas for improvement.
Wrap Up
Sales velocity is an often overlooked but critical factor in your business’s growth. By tracking and analyzing your sales, you can gain valuable insights into the effectiveness of your strategies and focus on areas where you need to improve. You can also identify trends to help inform decisions about future campaigns or product releases. Taking advantage of this information can be a great way to drive your business forward while improving customer satisfaction and retention.
