The quicker you push opportunities through your sales pipeline the more you invoice within a given period.
The key is knowing the deals to focus efforts on and what to let go of so you only engage in activities that will quickly and effectively close the business.
Sales velocity is considered a vital indicator of business health to determine how much revenue you can expect to generate over a specific time period.
The equation being: Qualified Opportunities x Win Rate x Opportunity Size / Length of Sales Cycle
Qualified Opportunities
Flowing through from your web forms, sales reps, and marketing efforts your overall sales pipeline should always be growing.
The maximum number of opportunities in your pipeline that could close within this month or quarter is available in the closing view of your sales pipeline dashboard.
How well your opportunities have been qualified determines how fast they then track through the sales process.
The setting of expected ‘phase days’ ensures the sales teams can visually identify issues and disqualify them quickly if required. This is the first factor that goes into calculating your overall pipeline velocity
Win Rate
Your win rate is determined by the quality of the leads flowing into your pipeline and then engaging in the right type of activities to close the deals.
To measure your win conversion rate simply divide the number of opportunities won by the total number of sales opportunities in a given period
Opportunity Size
The general rule of thumb is the larger the deal the longer it takes to close.
Sales pipeline reports provide insight into your past deals, the typical number of phase days and the activities that drove velocity in order to boost conversion rates.
This information helps the team to target opportunities they are more likely to close and set strategic activities for their larger long-term projects.
Sales Cycle Length
The amount of time from the moment your team laid eyes on the contact, to invoicing the business, averaged across all won deals.
Your total sales pipelineis made up of phases ‘specific’ to your business ‘so too’ is the length of time an opportunity should spend within each phase
Reviewing the won/lost data and estimated closing information enables management to focus resources.
Traffic light color coding then prompts the sales team to take action to either disqualify the opportunity or create further activities to push them through to the next stage.
Making money faster by reducing the overall sales cycle length
