Sales Velocity Equation – 4 Levers to Success

6 minute read

Velocity is the speed of something in any given direction. At Upland Altify, we think about velocity a lot. So much so that we created this sales velocity equation to get sales teams moving in the right direction. That direction is revenue. How fast you get there depends on four key levers.

What is Sales Velocity?

Sales velocity is the speed at which deals move through your pipeline and start to generate revenue. A sales velocity equation or formula uses four metrics to help organizations calculate their own sales velocity. These include:

  1. Number of opportunities
  2. $ deal value
  3. % win rate
  4. Length of the sales cycle

When used correctly, this formula can help organizations with their sales forecasting for a specific period of time and bolster their sales efforts.

sales velocity equation

Simply put, you want to increase one, two, and three and reduce four. If you increase one, two, and three by 10% and reduce four by 10%, you increase your sales velocity by 47%.

Since the Sales Velocity equation uses only four levers, you can quickly zero in on the strategies and activities that can significantly impact your sales effectiveness. Once you identify the lever where your performance lags or needs the most improvement, you can redefine targets and goals that yield significant revenue increases. We know that dramatic improvements to sales velocity and overall revenue are possible with simple changes. Let’s break it down.

Sales Velocity Lever 1: Increase the Number of Deals You Can Win

Notice we have changed the number of opportunities to increase the number of deals you can win. For many salespeople, increasing the number of opportunities is the only lever that gets any real attention. The problem is that if you focus most of your time on filling the pipeline, you’ve got less time to increase the chance of winning the deals you already have in your funnel. How can you increase the number of deals you can win? By being ruthless in the deal qualification stage. Organizations that seek to win four out of seven are far more successful than those who chase every deal and end up winning three out of ten. Rigorous qualification gives you a ticket to sales velocity town, population one.

By helping sales teams connect with the people that matter and focusing on selling value, Autodesk achieved an increase of 144% in average deal size, a 21% increase in win rate, and an overall enhanced sales velocity.

Sales Velocity Lever 2: Increase the Deal Size

Companies are fighting harder than ever to win deals. That makes it essential to win as many contracts as possible and maximize each opportunity. Sellers need to focus on higher-value opportunities by aggressively qualifying out lesser qualified opportunities to provide focus. Aligning each specific offer with your buyer’s needs and present the right product at the right time is an essential part of great selling, helping you to uncover whitespace and encourage your salespeople to create the largest possible account footprint.

Sales Velocity Lever 3: Increase the Win Rate

How do I increase my win rate? Through a thoughtful, defined sales process. Methodology and process are different. Methodology is the analysis of where you are in a deal vs. the competition. It’s a deductive framework your team consults whenever you learn something new and vital about your contract. Sales process is a defined set of steps aligned to how your customers want to buy and what you should do next. This process must be linear, prescriptive, and standardized throughout your sales team. Combining both of these elements together will make sure you achieve the win rates you are after.

Sales Velocity Lever 4: Shorten the Sales Cycle

A more rigorous approach to the selling cycle will efficiently align your company’s sales process with your prospect’s buying process. A successful opportunity management methodology ensures your team works on deals they are more likely to win, so sellers don’t waste time on opportunities that shouldn’t be in your wheelhouse. You can underperform in one of the first three factors and still prosper. But if the length of your average sales cycle suffers, success becomes very difficult. That means closing good deals as soon as possible and weeding out bad deals early in the process is crucial to sales effectiveness.

Avoid These Sales Behaviors

Sales management reinforces bad behaviors, like sandbagging, that drive sales inefficiency by primarily measuring on ‘sales activity’ by asking questions like ‘how many calls did you make this week? ‘or ‘how many opportunities did you add to your pipeline last month?’ These behaviors drive sales inefficiency. Removing them will improve sales velocity without adding a single deal to the pipeline.

From the salesperson’s perspective, in many ways adding new opportunities to the sales funnel is the easiest thing to do, especially if you are being given low-quality leads from those dastardly marketing folks. All sellers have used these excuses from time to time:

  • No one said they had to be qualified. Early qualification would only reduce the size of the pipeline.
  • No one said they had to be deals that you actually have a chance of winning?
  • You didn’t need to challenge the prospect to uncover how you could really add value (removing price sensitivity and improving your average deal size).
  • There was no need to ask the tough questions to understand the customer’s buying process so that you could align your selling activity or negotiate access to the real decision-makers to increase your win rate.
  • And you didn’t need to take control of the sale or agree on a joint selling/buying plan with the prospect, where you could, in fact, guide the progress and shorten the sales cycle.

Apply the Equation for Success

Of course, we understand the need to continually add new opportunities to your pipeline but indulge us for a minute. What happens if you don’t add new opportunities? Does it mean your sales velocity grinds to a halt? Well, not necessarily. Think about this:

If we apply the Sales Velocity Equation and assume that the number of opportunities stays static but that you manage to increase the average deal size and win rate by 10% and reduce the sales cycle’s length by 10%, your sales velocity would improve by 34%.

So, we would like to give you a challenge. Calculate your own sales velocity, and then ask yourself what you can do with the deals you have in your pipeline to impact your deal size, win rate, and sales cycle duration. You might be surprised at the results. Come back and let us know.

We love talking about sales velocity with our customers and prospects. Book some time with an Upland Altify sales expert to find out how you can increase your sales velocity this year.

Reliable products. Real results.

Every day, thousands of companies rely on Upland to get their jobs done simply and effectively. See how brands are putting Upland to work.

View Success Stories