If you decide to drive from point A to point B, the first thing you would probably do is make sure your car is ready for the journey. Otherwise, when something happens to your car en route, you find yourself stranded in the middle of nowhere while waiting for help.
Similarly, when you start a business you need to make sure all of your internal processes and systems function properly at all times. Regardless of the type of service or product you offer, sales fuel the engine that keeps your business going.
While both a brand new Tesla and an old VW Golf have engines, one of them definitely gets you to your destination faster—not to mention with greater comfort and safety. Just as a dependable, comfortable car improves the quality of a trip, the speed of your buying cycle and overall sales efficiency increases the success of your business.
In this article, we will focus on sales velocity. This key metric of an efficient sales process affects your bottom line.
Salespeople make an analogy between the sales process and a pipeline. When a prospect comes in on one side, the sales team actively pushes him or her through the various stages of the sales process. Thus, it takes time for a prospect to go through the full buying cycle and generate the expected revenue.
The speed at which a Prospect converts into a paying customer is called Sales Velocity.
In order to calculate sales velocity, you need to track four key metrics of your funnel:
Thus, a generally accepted Sales Velocity Equation looks like this.
For example, if you have 100 leads in your funnel with an average $2,000 value per deal, your win rate is about 30%. It takes an average of 30 days to close a deal. This results in a $2,000 sales velocity.
Yet, the number alone provides little value. You don’t know if your sales velocity is high or low unless you compare it to the other team’s results or benchmark it against your own data over time.
However, why is it so important?
All elements of the sales velocity equation are closely related. A change in any of the metrics affects the bottom line. Salespeople often mistakenly focus on just one aspect of this equation. In order to radically increase your sales production and grow your revenue, you must constantly focus on and improve all four key metrics.
Another benefit of measuring and tracking sales velocity is to see a perfect representation of the efficiency of your sales process. By combining all of the key metrics, you see the big picture of your business performance.
Thus, by measuring and tracking the speed of your sales process, you will:
A proven method to supercharge your selling activities is to analyze every stage of your funnel and identify the bottlenecks. By improving the speed of every separate process, you improve your bottom line and significantly increase your sales velocity.
Sales automation also optimizes your performance. By using a proper toolset, you can streamline some routine tasks and significantly improve their efficiency. After all, numbers can’t help your team sell better, but a smart tool like Docsify can. By optimizing a number of sales activities, this tool increases the overall sales efficiency and allows you to close more deals faster.
To find out more about Docsify, schedule a live demo with our team and sign up to get early access to this valuable tool.