Sales velocity measures how fast you’re making money. It looks at how quickly leads are moving through your pipeline and how much value new customers provide.
Why is it so important to track sales velocity? A higher sales velocity means you’re bringing in more revenue in less time.
Sales velocity is calculated using the number of opportunities, conversion rate, average order value and time to sale. Each offers a lever you can pull to drive business growth.
In this article, I’ll teach you how to increase your sales velocity, including practical steps you can take to influence the process. I’ve also included 22 diagnostic questions that can help you identify what to focus on personally.
Sales velocity is the speed your company makes money. It’s based on the number of opportunities, conversion rate, average order value and time to sale.
That means there are four components to the sales velocity formula:
Number of opportunities X Conversion rates X Average order value
Time to sale
|= Sales velocity|
In simple terms, you want to increase the conversion rate, opportunities and order value while reducing the time to sale.
So, how do you impact that equation? We’ve looked at each area to share the techniques and sales training that will help your business improve.
A powerful social media and social selling strategy is the cornerstone of bringing in leads.
Compelling thought leadership is a great way to attract the right people and build trust, whether it’s done through articles, events or another format.The key is to share information that’s valuable, which teaches new ideas and perspectives that lead to your solution.
This type of social selling is a marathon, not a sprint. Think about compelling content that provides value and how you can involve yourself in your prospects’ conversations.
Clearly, increasing sales velocity isn’t just about the volume of leads. It’s integral you’re creating the right kind of opportunities: deals that are mutually valuable for you and the client.
That means getting rid of the scattergun approach and knowing what the people you want to go after actually look like. That starts with past client analysis.
What types of trends and themes pull your best types of clients together? What conditions trigger a need for what you are selling?
Knowing that information allows your sales teams to have conviction that prospects are right for your solution and equips them to talk their language and qualify leads quickly.
Finally, salespeople need to be able to sell the value of a conversation.
Reaching out to prospects and selling your product limits the chances of a conversation as they will make a decision then and there whether it’s the right time to buy.
Instead, sell the value of a conversation with you using compelling insights about their peers or end-users; they need to believe the conversation will be worth paying for in itself.
Know the effort you need to put in. Sales people are often fixated on revenue targets but the way to reach these is to focus on effort.
Work out the target, average order and conversion rate, and map that back to the number of leads you need to achieve this target.
Conversion or win rate is the percentage of leads that turn into business in a given period.
If people are dropping out of your pipeline unexpectedly, it’s normally because they can’t convince a key stakeholder, weren’t a good fit in the first place or were doing a price or competency comparison on an existing supplier.
Making decisions in B2B is personally risky for your client and trust is key to how they choose. Pitching your company in the right way and aligning your brand with client needs has become far more important than ever before.
Selling internally is not easy and, in most cases, the likelihood of a deal going through – and going through quickly – can dramatically increase if you work as a team with your client.
Here are four ways you can increase conversion rates.
To act on your conversation, clients need to see why they should shift from their status quo. Just diagnosing needs isn’t enough. Your role is to help clients understand and redefine their real needs.
Make sure you focus on client outcomes and then explore their current approaches, so they see a compelling reason to change. That comes from effective questioning.
It is 10 times more likely a client will buy from you if they’re involved in creating their solution.
Compelling proposals outline why a client should change, choose you and why the project is going to work. It’s crucial to create them with the different stakeholders in mind.
Salespeople need to be able to help the client navigate the decision-making process by foreseeing the challenges that the client will face building consensus with stakeholders.
Deal size is the average selling price for deals you close in a month.
It’s a tough lever to impact. But, similar to conversion rates, pitching and proposals are vital to pulling this lever effectively.
Talk about long-term outcomes and position yourself as a partner that will help them achieve those outcomes. That allows you to develop a growth plan.
Effective negotiation is critical to increasing deal size:
Optimise low and high value deals by identifying the type of customer and what they need.
This allows you to invest more time in opportunities that have a greater potential deal value and close smaller deals quickly.
Don’t force solutions on to people that don’t need them; you’re wasting everyone’s time.
Learn how to identify accounts that have the potential to be high value, then work on real account plans and strategies to grow them over time.
Length of sales cycle or time to sale is the average time it takes to close deals.
To reduce that, you need to be really good at foreseeing and overcoming objections and proposals need to be really strong.
Make sure you understand the stakeholder group that’s involved in the decision-making process and equip the people you’re talking to with the resources they need.
Finally, you need to be strong at negotiation, so you can come away with a win-win solution that both you and the client are going to be happy with moving forward.
The strongest sales people instil confidence in the client by being proactive and assertive to move the sale through to the close.
If it’s taking too long to close deals, break down your sales process into steps to identify issues and opportunities for improvements. That could include automation, creating sales assets, decreasing follow-up time or any number of other improvements.
Want to know what lever to focus on first? Use these questions to test your strengths and weaknesses.
If you answer “no” to a number of questions in a section, spend time working on it so you can increase your overall sales velocity.
25 questions to ask yourself if you want to increase your sales velocity.
Increase the number of opportunities
Improving conversion rates
Average order size
Shorten the time it takes to close deals
Training is key to developing habits that will increase sales velocity.
Use Flume’s Sales Enablement platform to access:
At Flume, we’re all about embedding behaviours that move the needle. That’s why we’ve developed a course that looks specifically at sales velocity. It’s perfect for companies that are committed to coaching and turning knowledge into habits, and want to drive performance at scale.
Book a call to find out more about how you can increase your sales velocity.
We deliver our high impact sales training in the way that best suits your business needs.
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