There are lots of metrics your business needs to track to assess its performance. It’s necessary for you to understand where your business stands, what its strengths and weaknesses are, and which opportunities are open for it.
Sales velocity is a metric that ticks all the boxes. Never heard of it? Your loss! You need to start tracking it immediately and develop a robust strategy aimed at increasing your sales velocity figure.
In this article, we put a name to sales velocity’s face by giving it a definition, explain what factors affect it, tell you how and when to calculate it and give 18 actionable tips and approaches that will help you increase your sales velocity.
What is sales velocity?
Sales velocity is a sales metric that measures how quickly your business makes money. It analyses the speed at which deals move through your sales pipeline and generate revenue.
Four key factors affect your sales velocity: the number of qualified opportunities, the average deal size, the conversion rate, and the average sales cycle length. Let’s have a closer look at what each of these elements represents, how they contribute to your sales velocity and how to calculate them.
- Number of qualified opportunities
Every qualified lead in your sales pipeline is a sales opportunity. The more opportunities - qualified leads that are worth pursuing - you have in your sales pipeline at once, the better your sales velocity is. To find the number of opportunities (#) in a pipeline, simply count how many leads have been qualified as worth pursuing within the specified time frame.
- Average deal size
The average deal size is the average dollar value for a sale. The bigger your average deal size is, the better is your sales velocity. To calculate this metric, you need to designate a time period (month, quarter, etc.) and divide the total amount of money generated by the number of deals in that time frame.
Average deal size ($) = $ total revenue from all deals/ # total number of all deals
- Conversion rate
This metric is also known as win rate and refers to the percentage of leads that make it down to the very bottom of your sales funnel and become a paying customer. This metric is indicative of how well you qualify your leads as well as how successful your lead nurturing strategy is. Hence, there’s a direct correlation between sales velocity and conversion rate. To calculate the conversion rate over a certain period of time, you need to divide the amount of closed-won deals by the number of customers you’ve interacted with.
Conversion rate (%) = (# number of closed-won deals#/ number of interactions)* 100%
- Average sales cycle length
This metric refers to the average amount of time it takes for you to convert a prospect into a buying customer. There are lots of different factors that affect the length of your sales cycle, including the number of steps in the sales process, cost, and complexity of the solution being offered. The longer it takes for leads to go through the sales funnel, the worse your sales velocity is. To calculate the average sales cycle length, take the total number of days for all deals and then divide it by the number of deals for that specific period of time.
Average sales cycle length (L) = # total number of days for all deals/ # number of deals
There are several reasons why calculating sales velocity is an important habit for every business - both big and small - to adopt:
- It helps you to know exactly where your business stands. Sales velocity speaks volumes about your business health in general and your sales pipeline health in particular. It acts as a success metric.
- It gives you a clear business vision for the future. Not only does sales velocity help to project the amount of revenue your business can generate in the nearest future, but it also provides you with insights into the performance of your sales team.
- It helps to generate more revenue. When you know your current sales velocity and what it comprises, you can adjust your sales strategy by assessing the impact of each of the factors and amending them.
How to calculate sales velocity?
To calculate your sales velocity, you need to apply the following formula:
Sales Velocity = (# of opportunities * $ average deal value * % conversion rate) / L average length of the sales cycle
You can leverage the benefits of measuring your sales velocity if you do it in regular intervals and compare past and present results. This is especially important to do after changes in sales strategies or processes have been made. This way, you can see the effects and determine whether or not the modification is suitable for your bottom line.
Best approaches to boost sales velocity
To improve your overall sales velocity, you need to work on ameliorating all the factors that contribute to it. Here are the four main areas you need to focus on: to increase the number of qualified lead opportunities, to increase the average deal size, amplify the conversion rate, and reduce the length of the sales cycle.
Below, we’ve compiled a list of 18 approaches that will help you boost your sales velocity and make your business more profitable.
Increase the number of qualified leads
Revise your buyer and user personas
Any respectable marketing manager knows that there’s no successful marketing strategy without a carefully created buyer persona. In order to effectively address your target audience’s pains and offer your product as a solution, you need to understand who your customers are in the first place. It’s essential for you to put down on paper what your clients are like what bothers them, how they respond to stimuli and how they make purchasing decisions.
You need to conduct thorough research of your target audience to produce an ideal customer profile that accurately represents the whole group. Sometimes, it makes sense to create multiple buyer personas - for instance, when you’re selling several distinct products or when you’re handling many stages of the decision-making process (the end-user of your product needs to gain the approval of others before making a purchase).
There are a lot of benefits that come with creating an accurate buyer persona:
- They raise the effectiveness of marketing activities at all the different buying cycle stages as your marketing efforts resonate with your target audience better.
- They help to identify and prioritise promotional activities.
- They allow for better outreach.
- They make it easier for the sales department to adopt value-based selling.
- They help sales reps to build rapport with potential customers.
All in all, crafting a buyer persona is an irreplaceable step every marketer should take if they want to position their solution around the leads’ needs and drastically increase the number of lead opportunities. Here’s the catch, though. You can only achieve desired results if your buyer persona is accurate, relevant and up-to-date.
Unfortunately, it’s not enough to create a buyer persona once and call it a day. Marketers need to keep up with the ever-changing environment and react to changes promptly. As technology develops, audiences evolve, and your business alters its business model, a buyer persona that was once the main focus of your marketing activities can quickly become outdated.
There’s no set frequency at which you should revise your buyer personas, but we recommend doing it at least on a yearly basis so that you’re always on the same page with your target audience and know which trends prevail among them. On top of that, you should also revise and, if needed, revamp your buyer personas whenever something major is happening with your business or the business environment you operate in:
- A significant change in customers’ behaviour, values and beliefs
- A merge/acquisition of your business
- A shift in the business strategy
- A change of products and services
- Introduction of disruptive technology or concept
That way, you can increase the pool of high-quality leads available to your business and subsequently boost your sales velocity.
Connect lead capture and lead enrichment tools
In the past, leads’ profiles were an open book - it was enough to find a social media profile of your target to learn everything there is to know about them. Today, times have changed. People are becoming warier and warier of their personal information online, so they prefer not to share it with strangers openly. Manual lead generation has turned into an even more laborious and time-consuming process than it was before.
By the time you finish enriching your lead’s profile, the data you collect is likely to have already become irrelevant. This is especially true if you’re operating a business in a fast-paced environment but can really apply to any industry. After all, even if all your information stays accurate, it can still go useless quickly merely because your competitors have reached out to those leads before you had an opportunity to.
The only way out of this problem is to ditch manual data enrichment and employ one of the numerous lead capture and lead enrichment tools available on the market. Those can boost your productivity by cutting down the time wasted on manual research, copying and pasting the lead’s personal information, and improving the quality of the data imported into your CRM system. As you’re delegating the task to a machine, you eradicate the human error, ensuring all the data is clean and complete, with no details missing. Having more information about your leads can drastically increase the level of personalisation when communicating with them.
Here are a couple of tools we recommend to streamline your lead enrichment process:
- Clearbit. $99/month for 1000 requests. This tool allows you to turn an email address or a company domain name into a full-blown lead profile. The solution provides you with real-time, fresh and accurate data with an impressive degree of detail. You can get company attributes like employee count, technologies used, industry classification, and employee details like role, seniority, and even job change notifications.
- BeenVerified. $26.89/month. The concept of this tool is both cool and a little bit Joe-from-You-like… Creepy. But it gets the job done - BeenVerified prowls about the Internet, checking numerous websites and platforms (even the most unexpected ones) to find any information relevant to your lead based on their first and last name, and location. Then, the system compiles a profile with all its findings and presents it to you. Voila!
- NetHunt Integration with LinkedIn. A part of our NetHunt CRM business plan comes $48 per user/month, billed annually. This beautiful Chrome extension allows you to see which LinkedIn users are already a part of your database and which are not. Whenever you come across a lead that hasn’t been added to your CRM system yet, you can automatically capture all their publicly available LinkedIn information (first and last name, profile pic, email address, company, job title, Twitter handle, Skype ID, etc.) and enrich your CRM with it. All in a matter of a single click.
Involve more lead acquisition channels
If you want to acquire more leads, don’t limit yourself to a single acquisition channel. Instead, expand your horizons by adding more and more sources of leads. The list of options is vast and continues to grow by day: LinkedIn, Twitter, Facebook, Instagram, website, web forms, live events, networking parties, blogs… And chatbots! It doesn’t take a lot of effort to set up a chatbot or a live chat on your website, but as conversational experience is becoming a hot sales trend, it sure thing brings a lot of positive results:
‘79% of companies say that live chat has had positive results for sales and revenue, with 47% of consumers would be open to making a purchase completely from a chatbot.’
Indeed, with a live chat or a chatbot ready to assist the visitors, your chances of increasing the number of leads skyrocket.
Just make sure that you employ a reliable CRM solution to manage all those leads effectively. It’s best to choose a CRM system that integrates with a lot of third-party apps and tools so that you could automatically aggregate all your lead information from different sources in one place.
Optimise your lead outreach
It’s not enough to just increase the number of sources where you collect your leads from. You also need to optimise your lead outreach across different channels so that it’s fruitful.
Here are a couple of actionable pieces of advice regarding the most popular lead outreach channels.
Outreach by phone:
- Make sure you know who your prospects are and appeal to them with a valuable offer. No matter when you reach out to your prospects, a call is always a disruption to the flow of their day. That’s why you need to get straight to the point and prove that you’re worthy of their time. Since they don’t know what the call will be about, you have to bring some value to the table during the first few seconds of your interaction. Instead of making the call about you and your business, you need to make it about them, their pains and how your product can solve those.
- Master objection handling. You need to be prepared to combat objections with counter-arguments on the spot and ensure they’re both polite and relevant.
- Call at a suitable time. Generally, cold calls are most effective right before lunch or toward the end of the workday on Wednesdays and Thursdays. But even then, you still need to start the conversation by asking the person on the other end whether or not it’s a good time to speak.
- Develop several customisable cold calling scripts. Don’t rely on a one-size-fits-all cold call script. Instead, create a couple of templates for your salespeople to use when trying to collect information about leads. Following a script can give your sales reps confidence and ensure they don’t miss out on any important details.
For more cold calling advice, make sure to check out our guide. There’s a selection of highly effective templates at the bottom of this article, so read till the end!
- Make sure you’re writing high-converting sales copy. It needs to obey the rules of copywriting, use actionable words and have a strong CTA. Read more about how to write an effective sales email here.
- Ensure maximum personalisation of your email outreach. Even though you’re writing a cold email, you should still warm your lead up a bit by adding some personalisation details to your copy. For instance, mentioning their name or providing them with an offer relevant to their business is a good place to start.
- A/B test different cold email strategies.
- Make sure your cold emails are GDPR and CAN-SPAM compliant and don’t trigger any spam filters.
For more exclusive tips on how to get your cold emails noticed, read and replied to, read our expert roundup here.
Social media outreach:
- Make sure your sales reps’ social media profiles are in top-notch shape and ready to be used for sales outreach. Your social media profile is the face of your company online. Don’t spoil your chance at a positive first impression by having a dodgy-looking account. Download this checklist for a perfect Sales Manager’s LinkedIn profile.
- Actively practise social selling.
Take the most out of content marketing
Content marketing takes care of three important lead generation tasks:
- It raises your brand awareness.
- It establishes your brand’s authority.
- It makes your business easy to find on the internet.
A high-value, SEO-friendly blog post can generate a lot of traffic to your website. Exclusive gated content protected with a lead magnet can both capture lots of leads and natively promote your product or service. A YouTube video can make your brand go viral and improve your exposure rates tenfold. When it comes to content, the options are endless - you just need to find the combination that works best for you and allows you to showcase your expertise.
Increase the average deal size
Pursue larger clients even if they’re colder
As a rule of thumb, larger clients mean a larger average deal size. This correlation is fairly straightforward to explain. Companies that operate on a larger scale tend to have more diverse and extensive teams, more business processes that they need to take care of simultaneously, and, therefore, more realised needs that you can appeal to.
If you manage to land even a single deal with a large business from your target audience group, you will instantly enjoy a boost in your sales velocity thanks to the increase of your average deal size. Let alone if you foster this relationship further and turn a one-time purchase into a recurring one - then, you’ll be able to significantly liven up your cash flow and ameliorate your business positions. Sounds like a dream-come-true, doesn’t it?
Unfortunately, it’s only easy on paper. In real life, acquiring large companies as customers can be a long and laborious process. The majority of enterprises are likely to have long-term business relationships with other vendors already. They value those and aren’t going to break things off in a rush.
Those mentioned above can be very discouraging for small business salespeople to hear, but don’t call quits too early. You need to remember that prospecting is a gradual process. A single cold email isn’t going to convert your large enterprise prospect into a hot lead. However, it can become a basis for a handshake at an event, a little friendly demo call and, eventually, a large-sized sale.
So, if you know there’s an ice-cold large-scale lead that fits your buyer persona perfectly, don’t shy away from reaching out to them. Even if you don’t win a deal straight away, you still gain brand exposure and become more known in the industry. That way, you can stay ahead of the competition, right on top of your target audience’s minds.
Just make sure you’re not going for leads way out of your league. You need to stay realistic even when you’re aiming high - don’t chase Jeff Bezos if you specialise in servicing SMBs. You simply don’t have the resources to support a business of that calibre.
Develop Account-Based Selling (ABS) strategy
Since we’ve already touched on the subject of high-value leads and how a salesperson can acquire them, here’s another strategy that can help you land deals with larger companies and, subsequently, increase the average size of your deals.
Instead of targeting individuals as leads and hoping they have the authority to buy from you, you should implement the Account-Based Selling (ABS) strategy and target the account (the company as a lead) first and foremost. Once you find a business that could benefit from purchasing your solution, you can identify multiple potential stakeholders and decision-makers within the company to reach out to.
Since you’re not going through a hierarchy of employees, each of which can say a ‘no’ and end your relationship with the company, but rather communicate with the C-Suite directly, you have a better chance at landing a big boy deal.
Here’s a cadence of actions you need to take when applying the ABS approach:
- Identify ideal customer accounts to target. These can come from searching B2B databases, buying intent signals (like website visitor identification), or technographic information.
- Conduct research on each high-value account, their business, and any potential use cases for your solution within that organisation.
- Identify decision-makers: determine multiple individuals within the account who are likely to be involved in buying decisions for each use case.
Then, develop a highly personalised offer they wouldn’t be able to turn down and back it up with an eloquent presentation of your product or service.
Upsell and cross-sell
Upselling refers to the process of increasing a customer’s value by encouraging them to add on services or purchase a more expensive model. For instance, when a customer comes to your electronics store to buy a power bank because their phone’s battery is worn out and dies quickly, and you sell them a brand-new smartphone instead, that’s an upsell.
Cross-selling occurs when you offer a customer that has just made a purchase to buy a complementing or supplementing product to increase its overall value. For example, when you sell a protective screen and a silicone case to someone who’s just purchased a smartphone from your business, you’re cross-selling.
Both strategies can be applied to any business that sells more than one product (or version thereof), and are considered the best strategies for increasing the average deal size. Here are some tips that can make your upselling and cross-selling more successful:
- Use CRM tags to hit customers with personalised offers. It makes no sense to hit your customers with generic offers and expect them to fall for it. Not only is this approach not going to increase the size of your deal, but it can rob you of a customer as they lose trust in your business. Instead, you should keep track of your customer’s preferences and needs and send them an offer tailored to their specific situation. The best way to do this is by employing a CRM solution that allows you to stay on top of your interactions with leads and customers and categorise them based on various factors.
- Demonstrate value before making the pitch. Your upsells or cross-sells need to make sense in the customers’ minds. They need to understand the value of your offer - make the value proposition obvious before you push a product or service forward. Choose the best time to upsell and cross-sell. In some industries, upsells work best right before the checkout, while cross-sells tend to be more successful minutes after purchase. In other industries, on the other hand, sellers need to wait some time before they can offer a more expensive alternative or complementing products. You need to decide for your specific business when to approach customers.
Get your pricing strategy straight
Simply increasing the price of your product seems like an easy way out - you don’t put any extra effort into trying to sell more, yet the size of your deal continues to grow. At least, in theory... In reality, raising the price needlessly and without a proper justification can prove to be a major setback for your business’ sales velocity.
However, don’t let this scare you away from selling products on the more expensive side. The only problem with random price increases is that they’re not justified. 9 times out of 10, the ‘I don’t have the money for it’ objection translates to ‘I don’t think what you’re offering is worth what you’re asking for it’. If you manage to take ahold of one of the biggest sales trends in 2021 - value-based selling - and convince your leads that they can’t succeed without purchasing your product, you can easily bump up the price and increase your average deal size.
The other pricing strategy-related manipulations include:
- Steering clear of low-priced packages. If you have your prices too low, you risk attracting ‘poor’, low-value leads that only want to trial your service and cannot commit. Clients with this mindset usually don’t convert to large projects and occupy your resources without giving much in return. Choosing in favour of more expensive custom-tailored plans helps you attract customers who are willing to pay more and value quality above all.
- Securing fixed prices for long-term contracts. If you want to increase your average size deal, give customers a real incentive to pay more here and now. State that prices are subject to change unless a long-time commitment is made. A fixed price for long-term contracts is a win-win for both parties - you get paid the whole sum in one payment, and the customer has some sense of stability.
Shorten the length of the sales cycle
Address objections and concerns assertively
If you want to close deals faster, you need to be more assertive in your communication with leads. Instead of sending emails back and forth, make a bold move and offer them to schedule a call or even a face-to-face meeting. Your leads will have nothing left to do but match your effort and go to the next base quicker.
It’s not just appointment scheduling that you need to be assertive in. If you want to shorten the length of your sales cycle, you need to address your potential customers’ primary concerns. Conduct a thorough sales discovery process to find out everything they need or want from your solution. Then, tailor your offer to their needs in such a way it overcomes all the objections.
Develop sales enablements
If you want to cut down on the time-consuming exchange of unnecessary emails and calls, you should develop a selection of relevant sales enablements to distribute among your leads. Get your Sales and Marketing department to work collaboratively on creating appropriate content for leads at different stages of the customer journey:
Make sure you feature a help centre on your website with answers to all the frequently asked questions. Then, provide access to case studies, testimonials and other marketing materials needed to communicate the value of your product and elucidate its use-cases.
‘56% of customers expect to find whatever they need from a company in three clicks or less, and 68% would rather use self-service channels like knowledge bases to find answers to basic questions or to troubleshoot an issue.’
When you satisfy your leads’ interest in your product and help them wrap their heads around the benefits it can bring to them independently, they become hotter and enter your sales pipeline at a later stage of the buyer journey. They’re closer to making a purchase and, therefore, will convert quicker, shortening the average length of your sales cycle.
Respond to leads that enter the pipeline faster
‘71% of customers expect companies to communicate with them in real-time.’
Don’t give your leads a chance to second-guess their choice - come back at their query immediately. You need to reassure them that they’ve made the right choice of responding to your outreach and start nurturing them before they look in the opposite direction.
There are several ways in which you can enable instant responses. The two most common include implementing a chatbot or using sales automation software that sends out alerts whenever a new lead enters your sales pipeline.
Let’s have a closer look at both options…
- Chatbots and live chats.Both live chats, AI-powered chatbots and even FAQ bots allow you to always have “someone” manning the site, conversing with the visitors on your behalf. A bot like this is a perfect ‘communication filler’ that creates visibility of presence and keeps your lead engaged. Moreover, they also collect answers to qualifying questions to determine whether a visitor is a good fit for your brand.
- Automated notifications. In case you’d rather stay away from outsourcing any bits of communication to chatbots, you can arrange a notification to be sent to your assigned sales rep whenever a new lead enters the pipeline, so they could start nurturing them immediately. To do that, you’ll need a sales automation tool.
A perfect example of a tool that offers this functionality is our NetHunt CRM’s Workflows feature. You can configure different workflows to match your business processes and automate your lead responses. For instance, you can set up a Workflow to move a lead to the next stage based on their response to your outreach activities. Whenever a lead responds to your email campaign, their status changes from ‘New’ to ‘Negotiating’, and a rep gets assigned a relevant task. Once that happens, a notification - either by email or via Slack - is sent out to the responsible rep, and they can start nurturing the lead immediately.
Use sales automation to nurture leads
Your sales automation doesn’t have to stop at the very beginning of the process. You can go past the initial interaction and automate the entire customer journey.
NetHunt’s Workflows allows you to set up custom drip campaigns with a variety of triggers, actions and modifiers such as custom wait time to nurture leads in the most effective way. All without having to lift a finger.
This functionality allows you to stay on top of your lead nurturing game, always be timely and appropriate with your outreach and move leads down the sales funnel quicker.
Offer incentives to close deals earlier...
...Instead of offering discounts.
We’ve already explained the damage discounts can do. You don’t want to devalue your product by setting the price too low. However, you can offer incentives to nudge your leads towards making a purchasing decision faster.
Here are a couple of examples of what you could do to urge your leads to buy your product:
- Limited-time offers
- Special offers for the first X number of buyers
- Perks to those who make a purchase before [a certain date]
Boost the conversion rate
Revise the lead qualification process
Your leads don’t convert into paying customers because they never had the intention to buy your product in the first place.
While we did focus on increasing the number of lead opportunities earlier in the article, it’s important to mention that it’s not just the quantity of your leads that matters. They need to be of high quality, too.
You need to regularly update your approach to the lead qualification process and develop a robust lead scoring system. That way, you can weed out the leads that aren’t a good fit for your business and focus on the opportunities that will bring conversions instead.
Focus on building meaningful relationships
Instead of entering the floor as a seller, you need to enter it as an advisor and a friend first. Customers are sick and tired of being treated like cash bags. They don’t want to commit to yet another business that only views them as a source of revenue rather than a partner worth respecting.
If you want your leads to make a purchase, you need to stop thinking about making a sale and meeting quotas. Instead, you should focus on improving your customer experience and making your customers happy. Think about what they need and how they can succeed from buying your product. Make it about them and not you. This approach lays at the heart of the customer success strategy and allows you to communicate the value of your product while also ensuring you showcase your interest in the lead’s success.
On top of that, you should also build some robust human relationships with your customers. If you want to boost your conversion rate, you need to become a business they like and trust. That is only possible if you establish yourself as a trustworthy, decent seller via the means of influence marketing, relationship marketing and social listening.
Add more touchpoints and go omnichannel
You need to add more touchpoints to your lead nurturing strategy, which means you need to follow up.
‘80% of deals require five follow-ups before the close, yet almost half of all reps throw in the towel after one rejection or attempt to connect.’
[Source: Marketing Donut]
It can be a little weird to bombard your lead with endless emails, so don’t do it. Instead, develop a balanced strategy that includes different channels, both digital and physical. That way, you’re not annoying your potential customers, yet are always staying on top of their minds.
Work on your CTAs
The reason why your leads don’t convert can be as banal as lack of directions. Sometimes, people don’t know or don’t understand what you expect them to do, so they refrain from taking any further steps. They’re waiting for you to tell them exactly where they should head. If you’re dealing with particularly indecisive leads, you need to push them towards making a purchase. That’s why making your Call-to-Actions more clear and straightforward can be an invaluable trick for boosting conversions.
Make sure you read all about strengthening your CTA with the use of A/B testing in this article.
Phew! That’s it. Now you’re a sales velocity Jedi. But don’t get too comfortable, there are plenty of other metrics to track and take care of. Here’s our ultimate cheat sheet with the most important business metrics. Download it now!
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